Tết economy: one or two public holidays?


VIETNAM, February 8 –

Vo Tri Thanh

*Võ Trí Thành

The Vietnamese people have just concluded the nine days Tết holidays and returned to work on Monday. As businesses ramp up business to compensate for the stagnation of the fourth wave of COVID-19 infection last year, many people have expressed concerns about such a long holiday just after the Western New Year celebration is over. too long and affected their business plans.

The debate about whether Tết (Lunar New Year) is still smack in the modern age or should we combine Lunar and Solar New Year festivities as a way to increase productivity and reduce waste is not new and often raised before this party every year.

Việt Nam is one of six countries that celebrate the Lunar New Year in the world, along with China, the Republic of Korea, North Korea, Singapore and Mongolia. This is considered the biggest festival in Việt Nam in terms of tradition and economic opportunity.

Officially, Tết is a three-day celebration, but with long preparations, the holiday can span more than a week (including one or two weekends).

Opponents of the holiday said that Việt Nam should join the modern world in celebrating a single New Year holiday on its way to international integration. They cited the example that Japan switched to Western New Year celebrations since 1873 and took advantage of more working days to increase labor productivity to make the economy the second largest in the world (now the third).

Many beautiful traditions are also becoming less expensive.

Tết is an important family reunion in a year, especially for migrant workers and overseas Vietnamese, but in major cities in recent years, many families have chosen to travel outside during this holiday instead of stay at home and visit relatives.

Besides, there are several cultural values ​​that have been distorted and reversed in a bad way such as superstition, excessive spirituality and corruption on this occasion. Although the government pushed for a simpler holiday with the order prohibiting officials from visiting or bringing gifts to their superiors, corruption in the form of Tết gifts did not disappear.

In terms of the economy, many people have argued that labor productivity in Việt Nam remains low compared to many countries in the region, so a long pause for Tết pushes productivity even lower in the first quarter. The fact is that GDP growth and manufacturing expansion are often weak in the first three months of the year.

Companies, especially those in export processing zones, industrial parks and factories in big cities, often struggle to get workers back to work after Tết as many ask for longer vacations or even quit their jobs to stay in their hometowns to attend many local spring festivals.

This year, many businesses are expected to face a more severe labor shortage after Tết due to the impact of the fight against the COVID-19 pandemic in cities and provinces.

Some experts have estimated that the impact of long holidays is not only seven or nine days, but can last three weeks, including a week before the holiday, the main week and the “lazy start” week after. Tết which could cost the economy 2 to 5% of GDP.

However, for those who support the preservation of the traditional Vietnamese holiday, Tết is an important tradition of the nation which reflects the distinct culture of Việt Nam and cannot be ignored. This is an opportunity to foster sharing and friendship and an important family reunion for people far from home.

Tết holidays are also an opportunity to develop the economy because they can boost spending and stimulate tourism. It is the biggest spending season of the Vietnamese people thanks to the tradition of giving gifts, drinking and dining with friends and family, and decorating the house for the holidays.

Although economic growth and production in the first quarter are generally weak, the increase in production for Tết consumption is an important reason for pushing up GDP in the fourth quarter. A number of industries are also taking advantage of this opportunity, such as services, tourism, accommodation and retail.

To date, the government has never considered merging the two public holidays, but greater flexibility for employers in the use of the workforce or flexible holiday periods should be offered to make it adaptable to new normal situations.

There is no official simulation showing how a single New Year’s holiday will affect economic growth. Moreover, no one can say for sure that a holiday will improve work productivity and make people happier.

One thing is certain is that if the companies pay the workers well enough and offer good benefits, the workers will stay in the companies and work during the holidays. Thus, the use of employees or the granting of short or long breaks must be based on a consensus between the company and the employees to maintain activity and avoid stagnation.

Throughout the world, working hours tend to decrease as productivity increases. Vacations are necessary for workers to recharge and be more productive. In Việt Nam, workers are entitled to 25 to 28 days off (including 18 public holidays) per year. So, in the longer term, long vacations shouldn’t focus on Tết alone and the government may add more days off to other major holidays of the year.

In fact, experts believe that the essence of the problem is not the length of the vacation but a solution to increase productivity, and the thought of “long break”, “spring play” which only exists in production agricultural backwardness should be eliminated.

Much more important is that Tết is not only a beautiful tradition, but also how to make it a symbol of creativity and national vitality.

*Võ Trí Thành is a former vice-president of the Central Institute of Economic Management (CIEM) and a member of the National Advisory Council for Financial and Monetary Policy. Holding a PhD in economics from the Australian National University, Thanh primarily undertakes research and provides advice on issues related to macroeconomic policies, trade liberalization and international economic integration. Other areas of interest include institutional reforms and financial systems.


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