Deputy Minister of Planning and Investment Nguyen The Phuong. (Photo: mpi.gov.vn)Hanoi (VNA) – The Ministry of Planning and Investment hasbeen tasked with compiling a project on measuring Vietnam’s non-observedeconomy (NOE), to be submitted to the Government in the first quarter of 2018,according to Deputy Minister of Planning and Investment Nguyen The Phuong.
The Ministry of Planning and Investment has been seeking advices fromrelevant ministries and agencies on the statistical scheme, with one of the keyissues being the definition of the unobserved economy that consists of fiveelements.
The first element comprises underground economic activities that arelegal but deliberately concealed from the public authorities to avoid paymentof taxes and social security contributions; or complying with certain legalstandards, such as minimum wage, maximum working hours, and safety or healthstandards, and with administrative procedures, such as completing statisticalreports.
The second comprises illegal economic activities that generate goodsand services forbidden by law, for example, drug trafficking, prostitution, andhuman trafficking. Legal economic activities carried out by unauthorizedproducers also belong to this category.
The third one is the informal sector including productive activitiesconducted by households with the main objective to generate employment andincome for the people involved. The production is operated on a small scale, ata low level of organization and generally based on casual employment, kinshipor personal and social relations, and not on contractual agreements.
The fourth element is the household production for self-consumption includingproductive activities that result in goods or services consumed or accumulatedby the households that produced them, for instance, producing crops andlivestock, weaving cloth, and buildingone’s own house.
The last one comprises economic activities that are missed out by datacollection programmes due to problems arising either from statistical coverage orstatistical errors.
Vo Tri Thanh, former deputy director of the Central Institute forEconomic Management (CIEM), said that since 1990, the GSO estimated the size ofthe underground economy to be more than 10 percent of GDP.
About10 years ago, reports of evaluations conducted by other agencies andorganisations measured the amount of cash outside official circulation. Theresults showed that the value of this area was about 30 to 35 percent ofGDP.-VNA
VNA
