The economic model of Vietnam is characterized by the practice of a socialist-oriented market economy with an open-door policy and growth for poverty alleviation through attracting foreign investment (FDI). With opening up to attracting foreign investment and with a labourforce of limited vocation training, moving from rural to urban areas, from agricultural production to industrial production, FDI attraction of Vietnam mainly falls into the labour-intensive sectors of low skills.

Over the past 30 years, Vietnam has created jobs for millions of Vietnamese workers, which has helped change the lives of millions of Vietnamese workers. However, at the present stage, there are indications that economic development priorities are overwhelming social and environmental goals and posing challenges to real sustainable development in Vietnam. Attracting FDI into manufacturing industries with cheap labour costs starts to be showing “more harm than good”.

The chosen economic development model of utilization of low-skilled workforce and cheap labour cost have led to the fact that the garment sector has become one of the key industries in Vietnam. This sector has been attracting foreign investment from the early days when Vietnam opened its economy. Till now, the garment sector is still growing and tends to grow further when Vietnam participates in new-age FTAs, such as the Vietnam-EU FTA. Thus, the industry can be said to be a typical industry where social rights of workers are challenged.

FDI-related pressures and a lack of labour rights enforcement allow for low wages, frequent overtime work and hazardous labour conditions. This study highlights these challenges and offers practical recommendations. It was conducted in 2017 by the Institute for Workers and Trade Unions (IWTU) of the Vietnam General Confederation of Labour (VGCL) in cooperation with the Rosa-Luxemburg-Stiftung SEA Hanoi Office.