ILO Viet Nam Director's Speech on the occasion of the launching of the project on “Strengthening the performance of the social insurance system in Viet Nam through improved legislation and legal framework for social insurance”

Opening Remarks

Mr. Gyorgy Sziraczki, Director, ILO Country Office for Viet Nam

Launch of the project on “Strengthening the performance of the social insurance system in Viet Nam through improved legislation and legal framework for social insurance”

Press Club, Hanoi, 17 June 2013

Mr. Huan, Vice Minister of MoLISA

Mrs. Nga, Director of Social Insurance Department

Distinguished Participants and Guests


It is an honor for the ILO and for me personally to be here today at the launching event of the joint ILO-MOLISA project, “Improving the Legal Framework for Social Insurance”.

The ILO has a long history of promoting social insurance and social security systems to protect workers against risks. In fact, the ILO Social Security Convention, Number 102, was agreed as early as in 1952.

Social protection also fortifies societies against dangerously destabilizing economic shocks, acting as an economic stabilizer that buffers against falling incomes and consumption, as we saw during the 2008-2009 global economic crisis.

Moreover, this is especially important in the present context of Viet Nam’s massive economic transformation when some elements of the social protection system can facilitate adjustment to structural change by empowering individuals to seize opportunities -arising in changing markets.

Not surprisingly, the United Nations and other international organizations have called for stronger social protection systems, under the Social Protection Floor Initiative, which aims at ensuring basic income and basic services for every citizen, within a context of fiscal sustainability.

Ladies and Gentlemen,

For every State and their people, social protection is not just a question of entitlement and responsibility, but a matter of rights. It is a social contract with people.

Countries do not need to wait to become wealthy before they make a commitment to social protection. Rather, they should start improving social protection today, as a means to achieve broad-based, sustainable growth, and greater prosperity and human security.

Viet Nam has made good progress in protecting workers, especially in the formal economy. The Social Insurance Law which came into force in 2007 was a breakthrough.

However, after some years of implementation, it is time to improve the Law. Following the Party Resolution 15 on “some social policies”, MoLISA and the National Assembly both agree that change is necessary and urgent.

The reasons include the following:

First, demographic trends. Viet Nam’s population is aging faster than it was projected a decade ago. With fewer young workers in the future and a generous pension formula, the pension fund will be in jeopardy unless urgent measures are introduced.

Second, weak compliance. Nearly half of all registered enterprises still do not pay compulsory social insurance. Trust in the system needs to be restored, and enforcement mechanism should be strengthened.

Third, limited coverage. Only 20 per cent of the total workforce has social insurance today. The revised law should offer solutions to expand coverage to informal workers, as mandated by the recent Party Resolution and it should diversify the forms of social insurance and social security schemes.

More importantly, the revision of the law offers a good opportunity to strengthen the protection of workers and support the inclusive development of the country.

Vice Minister Huan, Mrs. Nga,

The ILO is proud to be part of this work. We look forward to working together with MoLISA, the National Assembly, VGCL, VCCI and other partners in the months to come.

I hope that our technical support will contribute to an improved Social Insurance Law, which ensures the protection and well-being of Vietnamese workers, now and in the future.

Thank you.