Paradoxically, despite its economic weight, knowledge of the informal economy is extremely limited in
Vietnam as it is in most developing countries and researchers, whether Vietnamese or foreign, have
paid little attention to the subject. This situation is due to a number of factors. First of all, the concept of
what constitutes “informal” is vague with a multitude of definitions having been put forward by different
authors. Secondly, measuring the informal economy is a tricky business since it operates on the
fringes of the economy. Thirdly, the informal economy suffers from a lack of interest on the part of the
authorities as it does not pay (or pays little) taxes and is seen more as a nuisance (especially in the
towns) and a mark of underdevelopment inevitably doomed to extinction by the country's economic
growth. These elements explain why there has been no really significant effort to date to improve
knowledge in this area. Moreover, in Vietnam as in other developing countries, the current
international economic crisis is supposed to provoke employment losses and employment
restructuring. This increases the interest for the informal economy, which is one of the main victims of
the crisis.
That is why the ILO in Vietnam has decided to commission a “Study on the Informal economy in
Vietnam”. Apart from the ILO's obvious interest in labour market functioning and policies for statutory
reasons, it should be reminded that the ILO was one of the pioneers of the concept of “informal sector”
that drew on the African experience documented in the famous 1972 study. This report sets out to
amend this situation by providing accurate statistical data and in-depth analyses on the informal sector
and informal employment in Vietnam for the first time ever. It draws on the results of several statistical
surveys conducted with support from the authors and largely refers to a book recently published on this
subject (Cling et alii, 2010). It is also based on some research lead by the authors on the impact of the
economic crisis in Vietnam and on several interviews conducted with officials from the Ministry of
Labour, Invalids and Social Affairs, the Ministry of Planning and Investment and the Ministry of
Finance, as well as with Vietnamese academics. Last of all, this report has benefitted from the debates
which took place during the National Workshop on the Informal Sector and Informal Employment in
Vietnam, organized by the “Labour Market Project” (European -MoLISA-ILO) on 4th March 2010
in Hanoi .
Previous to 2007, the statistical information on the informal economy (in terms of labour, income and
production) in Vietnam was scarce. Two main sources provided data on non-farm household
businesses (NFHBs) and among them registered and non registered ones: the Vietnam Household
Living Standards Survey (VHLSS) and the Annual Household Business Survey (AHBS). The two
sources provide highly discrepant estimates. While the VHLSS estimates the number of NFHBs in
Vietnam at 9.3 million in 2002, the respective figure given by the AHBS is 2.9 million. Despite careful
intents to reconcile the two databases, the gap remains highly significant. As regards informal
employment, this relatively new concept had never been measured in Vietnam.