INDIVIDUAL CONSULTANT PROCUREMENT NOTICE. for individual consultants and individual consultants assigned by consulting firms/institutions
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1 Date: 20 July 2017 INDIVIDUAL CONSULTANT PROCUREMENT NOTICE for individual consultants and individual consultants assigned by consulting firms/institutions Country: Description of the assignment: Viet Nam 09 Individual National Consultants for the study on productivity and competitiveness in Viet Nam (first phase) National Consultant Team Leader: 50 working days (Ref a) - 01 National literature review consultant: 20 working days (Ref b) - 01 National Data Consultant: 20 working days (Ref c) - 02 National Consultants in Industries and Construction team: 40 working days/ consultant (Ref d) - 02 National consultants in Agriculture, Forestry and Fisheries team: 40 working days / consultant (Ref e) - 02 National consultants in Service team: 40 working days / consultant (Ref f) Project name: UNDP Vietnam Period of Early August 31 December 2017 assignment/services (if applicable): Tender reference: ( ) 1. Submissions should be sent by to: nguyen.thi.hoang.yen@undp.org no later than: 3 August 2017 (Hanoi time). With subject line: (Reference #) Name of assignment Submission received after that date or submission not in conformity with the requirements specified this document will not be considered. Note: - Any individual employed by a company or institution who would like to submit an offer in response to this Procurement Notice must do so in their individual capacity, even if they expect their employers to sign a contract with UNDP. - Maximum size per is 7 MB. - Any request for clarification must be sent in writing, or by standard electronic communication to the address or indicated above. Procurement Unit UNDP Viet Nam will respond in writing or by standard electronic mail and will send written copies of the response, including an explanation of the query without identifying the source of inquiry, to all consultants. - After submitting proposal, bidder should send notification by (without attachment) to: procurement.vn@undp.org informing that the bidder has submitted proposal. UNDP will not be responsible for the missing of proposal if the bidder does not send notification to above address. 1
2 - Female consultants are encouraged to bid for this required service. Preference will be given to equally technically qualified female consultants. 2. Please find attached the relevant documents: Terms of Reference (TOR)... (Annex I) Individual Contract & General Conditions.. (Annex II) Reimbursable Loan Agreement (for a consultant assigned by a firm) (Annex III) Guidelines for CV preparation (Annex IV) Format of financial proposal.... (Annex V) 3. Interested individual consultants must submit the following documents/information (in English, PDF Format) to demonstrate their qualifications: a. Technical component: - Signed Curriculum vitae - Copy of 1-3 publications/writing samples on relevant subject. - Reference contacts of past 4 clients for whom you have rendered prefererably the similar service (including name, title, , telephone number, address ) b. Financial proposal (with your signature): - The financial proposal shall specify a total lump sum amount in Viet Nam Dong including consultancy fees and all associated costs i.e. airfares, travel cost, meal, accommodation, tax, insurance etc. see format of financial offer in Annex V. - Please note that the cost of preparing a proposal and of negotiating a contract, including any related travel, is not reimbursable as a direct cost of the assignment. - If quoted in other currency, prices shall be converted to the above currency at UN Exchange Rate at the submission deadline. 4. Evaluation: The consultants will be evaluated and selected separately. The technical component will be evaluated using the following criteria: National Team Leader (Ref a): Consultant s experiences/qualification related to the services Criteria Maximum Points 1 PhD in economics and/or related fields, specialization in industrial 100 policy, macro and labor economics. Sound knowledge and understanding of development contexts/issues, industrialization, industrial policy, TFP, productivity, labor productivity and competitiveness, preferably in MIC contexts and as related to Human Development; and related research works on these topics. 2 Extensive (minimum 5 years) working experiences in designing, conducting 300 studies on TFP, productivity, labor productivity and value chains, competitiveness, human development, inclusive growth. 3 Knowledge of Viet Nam s development context and industrial policies, 300 policies to promote inclusive growth and human development, productivity and competitiveness, and practices in MICs and Viet Nam. 4 Strong academic and policy research design skills, skills in coaching and 300 technically guiding research teams, Good command of writing and making presentations in English. TOTAL
3 National Literature review (Ref b) Consultant s experiences/qualification related to the services Criteria Maximum Points 1 Master Degree in economics and/or related fields, specialization in industrial 100 policy, macro and labor economics is an asset. 2 Knowledge and understanding of development, industrialization, industrial 250 policy, TFP, productivity, labor productivity and competitiveness, preferably in Viet Nam/MIC contexts. 3 Minimum 2 years working experiences in reviewing and/or doing research 250 studies on TFP, productivity, labor productivity and value chains, competitiveness, inclusive growth. 4 Knowledge of research on Viet Nam s development and industrial policies, 300 policies to promote inclusive growth, productivity and competitiveness; knowledge on international research on these topics is an assets. 5 Academic and policy research review and summarizing skills and good 100 command of writing and making presentations in English TOTAL 1000 National Data consultant (Ref c) Consultant s experiences/qualification related to the services Criteria Maximum Points 1 Master Degree in economics, statistics, econometrics and/or related fields Sound knowledge and understanding of statistics data/sources on TFP, 350 productivity, labor productivity and competitiveness at national, sector and subsector and enterprise levels in Viet Nam; knowledge about international data/sources is an asset. 3 Minimum 2 years working experiences in collecting and analyzing statistics 350 and survey data, preferably on TFP, labor productivity and value chains, competitiveness. 4 Good skills in using different data analysis tools and good command of 200 writing and making presentations in English. TOTAL 1000 National Constants - Industries and Construction ; Agriculture, Forestry and Fisheries ; Service teams (Ref d-e-f) Consultant s experiences/qualification related to the services Criteria Maximum Points 1 Master degree (PhD is preferred) in economics and/or related fields, 100 specialization in industrial policy, macro and labor economics is an asset. 2 Sound knowledge and understanding of development context/issues, 150 industrialization/ industrial or agriculture or service sector development policies, issues on TFP, productivity, labor productivity and competitiveness, preferably in MIC contexts, in one of the 3 topic areas; and related research works on these topics. 3 Extensive (minimum 3 years) working experiences in designing, conducting 150 studies on TFP, productivity, labor productivity and value chains, competitiveness, in one of the 3 topic areas. 4 Knowledge of Viet Nam s development context and industrial policies, 200 policies to promote development in agriculture and service sectors, inclusive growth, productivity and competitiveness in these sectors/subsectors, as well as knowledge on practices in MICs on the 3 topics. 5 Strong academic and policy research design and data analysis skills, skills in 300 preparing and good records of research/study papers on one of the 3 topics. 6 Good teamwork/skills;.good command of writing and making presentations in 100 English. TOTAL
4 A two-stage procedure is utilized in evaluating the submissions, with evaluation of the technical components being completed prior to any price proposals being opened and compared. The price proposal will be opened only for submissions that passed the minimum technical score of 70% of the obtainable score of 1000 points in the evaluation of the technical component. The technical component is evaluated on the basis of its responsiveness to the Term of Reference (TOR). Maximum 1000 points will be given to the lowest offer and the other financial proposals will receive the points inversely proportional to their financial offers. i.e. Sf = 1000 x Fm / F, in which Sf is the financial score, Fm is the lowest price and F the price of the submission under consideration. The weight of technical points is 70% and financial points is 30%. Submission obtaining the highest weighted points (technical points + financial points) will be selected. Interview with the candidates may be held if deemed necessary. 5. Contract Lump-sum Individual Contract will be applied for freelance consultant (Annex II) Lump-sum RLA will be applied for consultant assigned by firm/institution/organization (Annex III) Documents required before contract signing: - Personal History (following UNDP form) - Full medical examination and Statement of Fitness to work for consultants from and above 62 years of age and involve travel. (This is not a requirement for RLA contracts). - Release letter in case the selected consultant is government official. 6. Payment UNDP shall effect payments to the consultant (by bank transfer to the consultant s bank account provided in the vendor form (Annex V) upon acceptance by UNDP of the deliverables specified the TOR. 1st payment: 20% of total contract value will be paid after contract signing Last payment: 80% of total contract value will be paid upon completion of all deliverables with satisfactory acceptance from UNDP. If two currencies exist, UNDP exchange rate will be applied at the day UNDP instructs the bank to effect the payment. 7. Your proposals are received on the basis that you fully understand and accept these terms and conditions. 4
5 Annex I TERMS OF REFERENCE (TOR) The Productivity and Competitiveness Analysis (first phase) Title: Estimated Duration: Status: Duty Station: (Nine) National Consultants for the study on productivity and competitiveness in Viet Nam (first phase). Estimated: 50 working days for National Consultant Team Leader; 20 working days for the literature review consultant; 20 working days for national data consultant; 40 working days each of two national consultants in Industries and Construction team; 40 working days each of two national consultants in Agriculture, Forestry and Fisheries team; 40 working days each of two national consultants in Service team; all working days are Ha Noi based and over the period from early August 31 December Part-time Ha Noi/home based. 1. BACKGROUND Viet Nam has performed a remarkable economic growth during the period which was over 6.5 percent and Vietnamese economy has transformed from low income to lower-middle-income group. This transformation as noted by Brian McCaig and Nina Pavcnik (2017) and NHDR has been accompanied by Viet Nam s remarkable labor productivity growth (that exceeded the average growth for Asian economies, 5.1 percent versus 3.9 percent, respectively), over the period from In that period, the structural change - shifts of labor out of agriculture to industrial and service sectors - has largely contributed to the labor productivity growth. Indeed, structural change accounted for 38% of the growth over the whole period, increased from accounting for 19 percent of growth in the 1990s to 55 percent of growth in the 2000s (thanks for the enterprises reforms, trade liberalization and attraction of FDI). It is noted that while in 1990s, within sector labor productivity growth accounted for 81% of the total labor productivity growth of 5.2% (thanks to the early year Doi Moi reforms in agriculture and production and transaction of basic commodities with increased shares for more productive and higher-income agricultural sub-sectors were recorded), within-sector productivity growth contributed less to productivity growth (of 4.9%) in the 2000s, accounting for only 45 percent of the growth during this period, as productivity growth within many sectors slowed. For example, manufacturing labor productivity grew on average by 7.1 percent per year during the 1990s and by 2.7 percent per year during the 2000s. This trend in part accounts for the lower contribution of sectoral productivity growth to aggregate growth in the 2000s than in the 1990s. In spite of these positive developments, it is widely acknowledged that Viet Nam s current growth model relies too heavily on cheap labor and the exploitation of natural resources and the absolute gap on labor productivity between Viet Nam and other Countries in the Asia s region remains significant. The challenge for the Low Middle Income Viet Nam for ensuring more inclusive and sustainable growth is to transition to the new growth model that is based on rapid productivity growth, innovations and high value additions, and enhanced internationally competitiveness to provide more productive employment for majority of Vietnamese people. Recognizing the challenge, Viet Nam s socio-economic development strategy ( ) and five-year socioeconomic development plans (notably and ) have placed the importance of industrialization, increasing productivity and competitiveness. Among the SEDP s nine economic targets of which, two of them are respectively to increase the contribution of total factor productivity to growth and to reach 5 percent average annual increase in labor productivity. A wide-range of policies and programs (from, for example, SOEs reform, improving environment for doing business and start-ups, to supporting SMEs access to credit and improving the quality of human resources) has been and are being formulated and implemented. It is noted, however, despite these policies, the improvements in productivity and competitiveness remain below expectation. Among the key explanations for the below expectation results, often issues in implementation of policies are cited. While this may be true, it is also widely acknowledged that weak policy designs (that did not take into the account the concrete needs of 5
6 enterprises (of different sectors/subsectors and sizes, for example), political economy and institutional/crosssector coordination aspects, or the incentives and capacity for implementation) also contribute to the belowexpectation results. The problem of weak policy design (and implementation) is identified as the lack of in-depth knowledge of key bottlenecks to improvements of productivity and competitiveness at sector, especially sub-sector/cross sector and enterprises levels. While there are some research works available on TFP/productivity and competitiveness at economy-wide and (some) sector levels, these have been done based on the application of different methodologies and data sources (while facing many data and measurement issues). This limits the contributions of their findings to enhanced knowledge needed for designing concrete and feasible policies/actions. Furthermore, there are too few in-depth studies at the subsector/cross sector and enterprise levels and the limited knowledge on concrete bottlenecks at these levels hampers the formulation of concrete (nuanced/tailored rather than one-size-fit all - to meet concrete needs and address concrete bottlenecks subsectors/enterprises in the subsectors are facing) policies and actions to enhance productivity and competitiveness. UNDP Viet Nam Country Office, in consultations with different stakeholders, including at the GOVN high policy making level, has formulated an Initiation Plan to undertake preliminary activities to formulate and implement the first phase of a research program (which aims at making contribution to closing the above mentioned knowledge gaps). As one of the first activities of the Initiation Plan implementation a scoping mission of one international and one national consultant took place in June. The mission, based on its consultation with a wide range of national experts/institutions and international expert/research program adviser (whose TOR is provided in the appendix 1), and a quick review of available research and data has propose the scope of the research program, the concept note of which is presented in the appendix 2. This TOR is developed for recruiting a team of nine national consultants for undertaking the study of the first phase of the research program. 2. OVERALL OBJECTIVES AND SCOPE (more detailed description of the scope and deliverables of the study is provided in the appendix 2) The objectives of the first phase (desk) study include: (i) To provide an updated and comprehensive (and feasible as available research and data allow) analysis of Viet Nam economy s productivity and competitiveness and their trends at more disaggregated levels and in comparison with other countries; (ii) To identify the initial bottlenecks areas for improvements and make initial recommendations for (as analytical inputs to policy debates on) increasing productivity and competitiveness in Viet Nam; and (iii) To identify remaining knowledge gaps (to identify the concrete bottlenecks and actions for increasing productivity and competitiveness in Viet Nam) and make recommendations for the empirical survey and other research and policy dialogue activities in the second phase of the research program. The desk study on productivity and competitiveness planned in the first phase should provide a (i) comprehensive (rather than focusing on few subsectors) analysis of productivity and competitiveness of Viet Nam s sectors and subsectors at 4 digit level (rather than only at the economy-wide aggregate level) with (ii) some analysis on backward and forward linkages between subsectors and their positions in the GVCs, (iii) disaggregated by FDI and domestic (private and SOEs), and major (seven) geographical regions of Viet Nam, (iv) with the most updated trends ( /7), (v) using a consistent framework set of measures and methodologies and (vi) with international comparisons (based on consistent measures/benchmarks). The analysis will be made based on following measures (as available data and existing research papers allow): Labour productivity (and TFP as necessary to complement the analysis on labour productivity); Value Addition/(real value added changes/gross inputs); GVC positions and changes in value chain stages; R&D and technology status (upgrading)/innovations. The analysis will also address sizes (economy of scale) of enterprises and human capital (as important factors defining the enterprise productivity and competitiveness). 3. TASKS AND DELIVERABLES WITH TIMELINES OF CONSULTANTS National consultant team leader: Under the overall technical guidance and coaching (as necessary) of the UNDP Viet Nam s Senior Economist and the international expert Technical Adviser (TOR is provided in the appendix 1), day-to-day supervision of ACD/Head of Inclusive Growth Unit, and in close cooperation with the rest of the national consultant team members, the Team Leader will: 6
7 Based on the in-depth review of available literature and data sources (to be provided by the national literature review and data consultants) and further consultations with international advisor, UNDP Senior Economist, relevant national experts and consultant team members on measures and methodologies, refine the study scope and design; (refined study scope and design in English, August 2017) Based on the agreed study scope and design, develop the study analytical framework and methodologies (including proposed technical solutions to deal with issues such as heterogeneity, formality and informality, etc.), detailed outline of the study report and its components (in English, to be used as the guidance for their delivery by other team members); (August 2017) Based on the agreed study scope and design, develop a request (in English) for UNDP senior Economist and International Adviser (as per the TOR in the appendix 1) to provide international data/information needed for making international comparisons by the team members in their component-products and for drafting the consolidated report. To monitor and provide technical guidance and coaching to the team members as well as pragmatic/alternative solutions (including through technical meetings of the team members and UNDP technical staff) to deal with the technical issues (such as on methodologies, data, heterogeneity, formal/informal, etc.) they may face to ensure good quality and consistency of their component-products and timely delivery; (on-going, from August 2017-November 2017). Consolidate the component- products of team members into a first draft study report (in English) for consultation with the international expert, UNDP senior economist, team members and other national experts and stakeholders; (November 2017); and Based on the comments to be received from consultations produce the final study report (in line with the agreed study scope and design 1 and in English) and a policy brief (with summary of the study findings, key policy recommendations and messages), participate and make a presentation on the study report at policy debates/dialogues to be organized under this study; (December 2017). National team member in-depth literature review consultant: Under the guidance of the Team Leader and UNDP Viet Nam s Senior Economist, and day-to-day supervision of ACD/Head of Inclusive Growth Unit, and in close cooperation with the rest of the national consultant team members, the consultant will: Collect relevant available literature (additional to the ones provided in the study concept and scoping note in the appendix 2); (5 August 2017). Conduct an in-depth review of all available and relevant literature to produce a literature review paper to support the Team Leader in refining the scope and design of the study, team members to deliver their component-products and the Team Leader in producing the study report (August 20, 2017). The literature review paper, in English, should provide: summary of the research questions and scopes, data and methodologies used (including data for international comparison, as relevant with the study scope and objectives), key findings and recommendations. During the team members preparing their analysis and delivering their component-products and the team leader drafting the consolidated report, provide other/concrete inputs (on reviewed literature) as needed/requested by the team members and leader. This includes participation and making inputs in technical and consultation meetings/workshops to be organized under the study; (on-going from August to December 2017). National team member data consultant: Under the guidance of the Team Leader and UNDP Viet Nam s Senior Economist, and day-to-day supervision of ACD/Head of Inclusive Growth Unit, and in close cooperation with the rest of the national consultant team members, the consultant will: Collect relevant available data sets in Viet Nam (as outlined and additional to the ones provided in the study concept and scoping note in the appendix 2); (5 August 2017). Conduct an in-depth review of the data sets and to produce a data review paper to support the Team Leader in refining the scope and design of the study, team members to deliver their component-products and the Team Leader in producing the study report (August 20, 2017). The data review paper (in English) should provide: summary description of the data sets, their scopes and ability to use for making the analysis by the team members (as outlined in the appendix 2), and an user guide with will provide don ts and dos and other useful tips for the team leader and members in using the data sets. In close cooperation with UNDP senior economist and international technical adviser, collect data necessary for making international comparisons for team members to deliver their component-products and the Team Leader in producing the study report (September 2017). 1 The consolidated report is expected to: (i) provide an updated and comprehensive (and feasible as available research and data allow) analysis of Viet Nam economy s productivity and competitiveness and their trends at more disaggregated levels and in comparison with other countries; (ii) identify the initial bottlenecks areas for improvements and make initial recommendations for (as analytical inputs to policy debates on) increasing productivity and competitiveness in Viet Nam; and (iii) identify remaining knowledge gaps (to identify the concrete bottlenecks and actions for increasing productivity and competitiveness in Viet Nam) and make recommendations for the empirical survey and other research and policy dialogue activities in the second phase of the research program. 7
8 During the team members preparing their analysis and delivering their component-products and the team leader drafting the consolidated report, provide other/concrete advices and inputs (on data, data use) as needed/requested by the team members and leader. This includes participation and making inputs in technical and consultation meetings/workshops to be organized under the study; (on-going from August to December 2017). National team members two consultants in each of 3 sub-teams on Industries and Construction, Agriculture, Forestry and Fisheries and Service topics: Under the guidance of the Team Leader and UNDP Viet Nam s Senior Economist, and day-to-day supervision of ACD/Head of Inclusive Growth Unit, and in close cooperation with the rest of the national consultant team members, the consultant sub-team members will: Participate in team discussions for defining/refining the study design, developing study analytical framework and methodologies, formulation of the study report outline and outlines of its components. Based on the agreed study design, analytical framework and methodologies, conduct analysis of available data (both of Viet Nam and for international comparison) and literature on the respective topic (among the above mentioned 3 topics), present key results (main findings and main messages) of the analysis in a short paper (in English, following a template that will be developed by the team leader) and at a technical meeting (where all sub-teams will present their key results); (October 2017); Based on the agreed outline of the component-products, results of the data and literature analysis and inputs for international comparisons to be provided by the international adviser and UNDP senior economist prepare the first draft the component paper (on each of 3 topics, in English) for consultations (including taking part and making inputs in consultation events); (first half November 2017). Based on the feedbacks to the first draft, prepare the final component paper in English and edit the Vietnamese translation (before 25 November 2017). Participate and make a presentations on the study component reports at policy debates/dialogues to be organized under this study; (December 2017). 4. PAYMENT TERMS 20% of the contract value (fees based on the UNDP s standard rates) will be paid after signing of the contract; and 80% of the total contract value will be paid upon provision of all deliverables with satisfactory acceptance from UNDP. 5. DOCUMENTS AND SUPPORT OF UNDP UNDP will provide following relevant background documents: The Initiation Plan and the concept note of the full-scale project (through ) Materials from similar research program supported by UNDP in Turkey (through a shared driver); UNDP/VASS, NHDR Growth that works for all (can be found in the UNDP Viet Nam website). Scoping mission s proposed scope and design of the study (appendix 2) All documents and data provided to the consultants are confidential and cannot be used for any other purposes or shared with a third party without any written approval from UNDP. UNDP is not required to provide any physical facility for the work of the consultants, however venues for some technical meetings/consultations can be provided, at the discretion of the UNDP and as necessary. As necessary, UNDP will facilitate meetings of consultants with relevant government agencies and experts as necessary. 6. Qualification and experience requirements: Team Leader: PhD in economics and/or related fields, specialization in industrial policy, macro and labor economics is an asset. Sound knowledge and understanding of development contexts/issues, industrialization, industrial policy, TFP, productivity, labor productivity and competitiveness, preferably in MIC contexts and as related to Human Development; and related research works on these topics. Extensive (minimum 5 years) working experiences in designing, conducting studies on TFP, productivity, labor productivity and value chains, competitiveness, human development, inclusive growth. Knowledge of Viet Nam s development context and industrial policies, policies to promote inclusive growth and human development, productivity and competitiveness, and practices in MICs and Viet 8
9 Nam. Strong academic and policy research design skills, skills in coaching and technically guiding research teams, Good command of writing and making presentations in English. National team member in-depth literature review consultant: Master Degree in economics and/or related fields, specialization in industrial policy, macro and labor economics is an asset. Some knowledge and understanding of development, industrialization, industrial policy, TFP, productivity, labor productivity and competitiveness, preferably in Viet Nam/MIC contexts. Minimum 2 years working experiences in reviewing and/or doing research studies on TFP, productivity, labor productivity and value chains, competitiveness, inclusive growth. Knowledge of research on Viet Nam s development and industrial policies, policies to promote inclusive growth, productivity and competitiveness; knowledge on international research on these topics is an assets. Academic and policy research review and summarizing skills and good command of writing and making presentations in English. National team member data consultant: Master Degree in economics, statistics, econometrics and/or related fields. Sound knowledge and understanding of statistics data/sources on TFP, productivity, labor productivity and competitiveness at national, sector and subsector and enterprise levels in Viet Nam; knowledge about international data/sources is an asset. Minimum 2 years working experiences in collecting and analyzing statistics and survey data, preferably on TFP, labor productivity and value chains, competitiveness. Good skills in using different data analysis tools and good command of writing and making presentations in English. National consultants in 3 sub-teams on Industries and Construction, Agriculture, Forestry and Fisheries and Service topics Master degree (PhD is preferred) in economics and/or related fields, specialization in industrial policy, macro and labor economics is an asset. Sound knowledge and understanding of development context/issues, industrialization/ industrial or agriculture or service sector development policies, issues on TFP, productivity, labor productivity and competitiveness, preferably in MIC contexts, in one of the 3 topic areas; and related research works on these topics. Extensive (minimum 3 years) working experiences in designing, conducting studies on TFP, productivity, labor productivity and value chains, competitiveness, in one of the 3 topic areas. Knowledge of Viet Nam s development context and industrial policies, policies to promote development in agriculture and service sectors, inclusive growth, productivity and competitiveness in these sectors/subsectors, as well as knowledge on practices in MICs on these topics. Strong academic and policy research design and data analysis skills, skills in preparing and good records of research/study papers on one of the 3 topics. Good teamwork/skills. Good command of writing and making presentations in English. 9
10 Appendix 1 to TOR: Terms of Reference Technical Leader for studies on productivity and competitiveness in Viet Nam Title: Estimated Duration: Status: Duty Station: International Expert Technical Leader/Adviser for the studies on productivity and competitiveness in Viet Nam. Estimated working days (15-20 days home-based and 5 days travel to Ha Noi and/or Ho Chi Minh City - HCMC) over the period from June 10 December Part-time Home based plus travel to Ha Noi/HCMC. I. Background Viet Nam has rightly earned a global reputation for inclusive and equitable development, rooted in a successful transition to a market economy. Its Doi Moi reforms initiated in 1986 resulted in high growth, unprecedented poverty reduction and wider developmental gains (reflected in strong MDG performance). However, during successive decades the economic model has run out of steam, annual growth has levelled-off, and become considerably less inclusive. Serious disparities have emerged and the economy has been unable to provide new employment opportunities, not only for the poor, but crucially also for the growing lower middle class. Underlining these trends has been weak productivity growth and declining competitiveness. Viet Nam is struggling to transition from an economy rooted in extensive growth (the use of cheap labour and exploitation of raw materials) to one based on intensive growth (rooted in rapid and lasting improvements in productivity). These are characteristics of an economy exhibiting early signs of the middle income trap - in this case more correctly, a lower middle income trap. Thus far the national policy response has been both inadequate and ineffective. In spite of a consensus on the need to reshape the economic model, the strategic direction lacks coherence and adequate concrete measures, while the state also appears to suffer from a basic inability to generate the political consensus for appropriate action. Informed by the debates generated by the NHDR 2015 Growth that Works For All and the Viet Nam 2035 Report, and with Government s active encouragement, UNDP is seeking to develop a tailored and high quality Technical Assistance and Policy Support intervention to provide new evidence and analysis, and subsequently recommend concrete policies and actions to tackle these issues. Modelled on interventions elsewhere (and existing research), UNDP is working with national partners to develop a proposed Productivity and Competitiveness Project for Inclusive Growth (the P&C Project), which will seek to: (a) Build a comprehensive evidence base and high level policy inputs to improve economic performance; (b) Recommend institutions and mechanisms through which policy reforms can be designed and adopted; (c) Resource a series of action plans and direct measures to improve productivity and competitiveness. To support the formulation and quick start-up of the full-scale project, an Initiation Plan (the Pre-PCP) has been formulated as the inception phase of the full-scale project to undertake preparatory activities, among which: (i) (ii) TFP/growth accounting study a desk study of available relevant research work and analysis of available data to map TFP/Productivity of VN s economy, disaggregated by sectors, subsectors, locations (key regions or major economic growth engines), FDI and domestic sectors. Benchmarking of economy-wide competitiveness study a desk study of available relevant research work and analysis of available data to map competitiveness of VN s economy, its sectors, subsectors (disaggregated by FDI and domestic sectors), based on clear and internationally accepted sets of benchmarks for international comparisons. A note: the two studies above can be combined under a common analytical framework (based on methodologies and measurements/benchmark). (iii) Design/preparations for follow-on major empirical survey (to take place in the full-scale project), including (1) basic specifications of the survey methodology and analytical framework and (2) reviewing major value chains enabling selection of sub-sectors/cross-sectors for detailed empirical survey/study. The above work will be scoped, designed and implemented by teams of international and national consultants 10
11 in close cooperation of UNDP Viet Nam Senior Economist. The proposed consultancy aims at providing overall technical guidance (and coaching as necessary) to the teams to ensure that the studies design, methodologies, analytical frameworks and approaches to data constraints proposed as well as the products delivered by the teams are technically vigorous and of international standard and quality. II. Scope of work Under the overall guidance of the UNDP RR/UNRC, day-to-day supervision of ACD/Head of Inclusive Growth Unit, and in close cooperation with the UNDP Viet Nam s Senior Economist, the international expert Technical Leader/Adviser will provide technical guidance and coaching (as necessary) to the consultant teams to ensure academic soundness and international quality of the scope/design, methodologies, analytical frameworks and products of the teams on studies and survey. The Technical Leader/Adviser will also be expected to (i) share international practical experiences in conducting similar studies and surveys; (ii) suggest pragmatic solutions/alternatives to deal with the issues the teams may face on data availability and defining/applying international benchmarks in analysing productivity and competitiveness and (iii) participate in policy dialogues on the results of the studies to bring international experiences and solutions, also recommending concrete policies and actions for improving productivity and competitiveness in Viet Nam. III. Key tasks and deliverables (timelines) The international Technical Leader/Adviser, in close cooperation with UNDP Viet Nam s Senior Economist, will: (i) Review materials on similar studies and surveys, especially ones conducted in Middle Income Countries facing development challenges similar to Viet Nam. (ii) Provide comments, suggestions to improve the quality, especially in terms of soundness of the proposed scope, methodologies and frameworks of the study and survey outlines to be prepared by a scoping team (of an international and a national consultant). Deliverables: a set of written comments/suggestions on the draft scoping/design papers to be produced by the scoping team; technical discussions with the scoping team, (timeline: June 2017). (iii) Provide comments and suggestions to improve the quality, especially in terms of soundness of the proposed scope, methodologies, analytical frameworks, alternative solutions to the issues on the data availability and international benchmarks, of the two studies design and draft reports to be prepared by national consultant team(s). Deliverables: sets of written comments/suggestions on the draft studies designs, research work plans and draft research reports/papers; samples of similar study design/papers; and technical discussions (coaching sessions as necessary) with the research teams (timeline: July Nov. 2017). (iv) Provide comments/suggestions for improvement of a policy paper consolidating/summarizing the results of the two studies, especially in terms of providing international positive (and negative) experiences, policies and solutions that have (not) been effectively applied in enhancing productivities and competitiveness. Deliverables: sets of written comments/suggestions on the draft policy paper; samples of similar papers; and technical discussions with the research teams (timeline: Nov. - December 2017). (v) Provide comments and suggestions to improve quality of the empirical survey design (scope and sample design; selection of subsectors/cross sector topics, locations and value chains/ key products; types of information and methods of data/information collections, etc.). Deliverables: sets of written comments/suggestions; samples of similar surveys; and technical discussions with the research teams (timeline: Nov. - December 2017). (vi) Participate in 1-2- policy dialogues in Viet Nam on the results of the studies to bring international experiences and solutions, recommend concrete policies and actions for improving productivity and competitiveness in Viet Nam. Deliverables: power point presentations/short papers/speeches to be delivered at the dialogues (timeline: Nov. - December 2017). IV. Payment terms - 20% of the contract value (including fees, travel expenses and Daily Subsistence Allowances based on the UNDP s standard rates) will be paid after signing of the contract; and 80% of the total contract value will be paid upon provision of all deliverables with satisfactory acceptance from UNDP. If necessary, an advance can be made to cover the travel expenses (air-tickets and visa fees if applicable). V. Reference documents The following documents are necessary for the selected international expert to start the work: The Initiation Plan and the concept note of the full-scale project (through ) 11
12 Materials from similar research program supported by UNDP in Turkey (through a shared driver); UNDP/ VASS, NHDR Growth that works for all (can be found in the UNDP Viet Nam website). Scoping mission s proposals and a list of available research papers on similar topics in Viet Nam (through s/shared driver, as these will be provided) Draft study and survey designs; draft research papers and summary paper (through s/shared driver, as these will be provided). Concept notes/agenda of the policy dialogues (through s/shared driver, as these will be provided) VI. Qualification and experience requirements for both international and national consultants: PhD in economics with specialization in industrial policy, and/or related fields. Sound knowledge and understanding of development, industrialization, industrial policy, TFP, productivity, labor productivity and competitiveness, preferably in MIC contexts; and related research work on these topics. Extensive (minimum 10 years) working experiences in designing, conducting studies on TFP, productivity, labor productivity and value chains, competitiveness. Knowledge of South East Asia s development context and industrial policies, policies to promote growth, productivity and competitiveness, and practices in MICs, ideally including Viet Nam will be an asset. Strong academic and policy research design skills, skills in coaching and technically guiding research teams, and good command of writing and making presentations in English. 12
13 Appendix 2 to TOR: Concept Paper: Scoping Research Program on Productivity and Competitiveness in Viet Nam A. Background Viet Nam has performed a remarkable economic growth during the period which was over 6.5 percent and Vietnamese economy has transformed from low income to lower-middle-income group. This transformation as noted by Brian McCaig and Nina Pavcnik (2017) and NHDR has been accompanied by Viet Nam s remarkable labor productivity growth (that exceeded the average growth for Asian economies, 5.1 percent versus 3.9 percent, respectively), over the period from In that period, the structural change - shifts of labor out of agriculture to industrial and service sectors - has largely contributed to the labor productivity growth. Indeed, structural change accounted for 38% of the growth over the whole period, increased from accounting for 19 percent of growth in the 1990s to 55 percent of growth in the 2000s (thanks for the enterprises reforms, trade liberalization and attraction of FDI). It is noted that while in 1990s, within sector labor productivity growth accounted for 81% of the total labor productivity growth of 5.2% (thanks to the early year Doi Moi reforms in agriculture and production and transaction of basic commodities with increased shares for more productive and higher-income agricultural sub-sectors were recorded), within-sector productivity growth contributed less to productivity growth (of 4.9%) in the 2000s, accounting for only 45 percent of the growth during this period, as productivity growth within many sectors slowed. For example, manufacturing labor productivity grew on average by 7.1 percent per year during the 1990s and by 2.7 percent per year during the 2000s. This trend in part accounts for the lower contribution of sectoral productivity growth to aggregate growth in the 2000s than in the 1990s. In spite of these positive developments, it is widely acknowledged that Viet Nam s current growth model relies too heavily on cheap labor and the exploitation of natural resources and the absolute gap on labor productivity between Viet Nam and other Countries in the Asia s region remains significant. The challenge for the Low Middle Income Viet Nam for ensuring more inclusive and sustainable growth is to transition to the new growth model that is based on rapid productivity growth, innovations and high value additions, and enhanced internationally competitiveness to provide more productive employment for majority of Vietnamese people. Recognizing the challenge, Viet Nam s socio-economic development strategy ( ) and five-year socioeconomic development plans (notably and ) have placed the importance of industrialization, increasing productivity and competitiveness. Among the SEDP s nine economic targets of which, two of them are respectively to increase the contribution of total factor productivity to growth and to reach 5 percent average annual increase in labor productivity. A wide-range of policies and programs (from, for example, SOEs reform, improving environment for doing business and start-ups, to supporting SMEs access to credit and improving the quality of human resources) has been and are being formulated and implemented. It is noted, however, despite these policies, the improvements in productivity and competitiveness remain below expectation. Among the key explanations for the below expectation results, often issues in implementation of policies are cited. While this may be true, it is also widely acknowledged that weak policy designs (that did not take into the account the concrete needs of enterprises (of different sectors/subsectors and sizes, for example), political economy and institutional/crosssector coordination aspects, or the incentives and capacity for implementation) also contribute to the belowexpectation results. The problem of weak policy design (and implementation) is identified as the lack of in-depth knowledge of key bottlenecks to improvements of productivity and competitiveness at sector, especially sub-sector/cross sector and enterprises levels. While there are some research works available on TFP/productivity and competitiveness at economy-wide and (some) sector levels, these have been done based on the application of different methodologies and data sources (while facing many data and measurement issues). This limits the contributions of their findings to enhanced knowledge needed for designing concrete and feasible policies/actions. Furthermore, there are too few in-depth studies at the subsector/cross sector and enterprise levels and the limited knowledge on concrete bottlenecks at these levels hampers the formulation of concrete (nuanced/tailored rather than one-size-fit all - to meet concrete needs and address concrete bottlenecks subsectors/enterprises in the subsectors are facing) policies and actions to enhance productivity and competitiveness. UNDP Country Office, in consultations with different stakeholders, including at the GOVN high policy making level, has formulated an Initiation Plan to undertake preliminary activities to close the above mentioned knowledge gaps. A scoping mission of one international and one national consultant took place in early June 13
14 with the tasks to consult with national experts/institutions 2 and review available research and data to propose the scope of the research program, which is presented in the following sections of this paper. B. Proposed research program 1. Objective of the research program The overall objective is to contribute to the long term high economic growth mainly by increasing the contribution of productivity and enhancing competitiveness of Viet Nam s economy, especially at the selected sector, subsector and enterprise levels. Specifically the research program aims at (i) making contributions in defining the concrete constraining (both internal and external) factors of productivity and competitiveness in Viet Nam at sector/subsector and enterprise levels, using these to (ii) inform the formulation and implementation of concrete policy framework, and policies/actions (as well as strengthening institutional capacities to formulate and implement these policies) tailored to meet the needs and addressing the bottlenecks that enterprises working in the sectors/subsectors face in increasing their productivity and competitiveness. To achieve the aims, the proposed research program will be implemented in two phases. 2. First phase: A Productivity and Competitiveness Analyses: A Quantitative Desk Study, July December 2017 (please see annex 3 for the rationale for combining productivity and competitiveness analyses in a single analytical framework) 2.1 Overview of the available research and data: While exploring knowledge gaps to define the potential value additions and formulate the scope of the research in the first phase, the scoping mission, in consultation with a wide range of stakeholders, has identified a number of studies and sources of data sources potentially suitable for making analysis on productivity and competitiveness. The annex 1 will provide the list of such data sources and studies. It is observed that these studies (i) either focus on the economy-wide/aggregated level or some specific subsectors/production processes such as textile and garments, electronics, food processing, automobiles, etc. 3 and thus did not provide a comprehensive picture on productivity and competitiveness of Viet Nam economy at its subsector level, taking into the account the backward and forward linkages, shifts between subsectors/sectors and especially with updated trends; (ii) applied different measures of productivity and competitiveness as well as used different analytical frameworks, methods and assumptions, such as to estimate capital stock (for calculating TFP) or dealing with the issue of many jobs in rural areas in calculating agriculture labor productivity, and relied on different sources of data (including one-off surveys) and thus provided inconsistent results (which can be observed even from studies on the same subsectors); (iii) did not have analysis disaggregated by types of ownership (such as FDI and domestic) and thus sometime provided misleading conclusions about the productivity of Vietnamese enterprises within the subsectors; (iv) did not have analysis by regions necessary for examining the important factors such as concentration, connectivity, domestic value chains, etc. and (v) had little international comparisons (based on consistent measures/benchmarks) especially those are at the 4 digit level and analysis on value chains. It should be noted that in terms of measurements of productivity and competitiveness, some experts expressed concerns about using TFP in developing economies like Viet Nam (which face a different kind of demand constraint - owing to the underemployment of labour and other resources), making reference to inaccurate results about both technical change and productivity. Others argued that labor productivity captures both capital intensity (i.e. per labor capital) and TFP (calculation of which requires measuring capital stock and factor shares, both are subject to measurement errors), and as a country at a low level of development, Vietnam still needs capital deepening, particularly Vietnamese SMEs, in order to be internationally competitive. The enterprise census is assessed as most useful and used sources of data for quantitative analyses on productivity (both labor productivity and TFP) and competitiveness. The census ( , 2017 Enterprise Census is on-going), conducted by GSO annually, has included (recently) some useful modules (with subsamples) such as on R&D, GVC, technology and innovations. At the same time this data sources has limitations, such as the lack of data on capital stock (some researchers used fixed capital instead but this 2 The scoping mission met with Central Institute for Economic Management (CIEM), Vietnam National Productivity Institute (VNPI), Ministry of Industry and Trade (MoIT), Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), Centre for Analysis and Forecast in Vietnam Academy of Social Sciences (VASS), National Centre for Socio-Economic Information and Forecast (NCIF). 3 It should be noted that there are some studies by Christine Ngo, Nguyen Ngoc Anh and VASS at the enterprise level in some subsectors such as textile, footwear, electronics industries, motorcycle, etc. that look rather deeply on the bottlenecks enterprises face in improving their productivity and competitiveness the topics that will be addressed in the second phase of the research program. 14
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