The reason GRDP is increasing yet general income of people falling

In the two years 2020 and 2021, a strong outbreak of Covid-19 pandemic on a global scale has seriously affected all socio-economic aspects of all countries in the world, including Vietnam. Facing the complicated development of the epidemic, many provinces and cities in the country have taken strong and drastic solutions to limit the spread of the disease, especially the application of Directive No. 16 of the Prime Minister Prime Minister. During this period, the supply chain of production, processing and consumption was interrupted; production and business activities of enterprises, individual business households, construction works, projects, etc faced many difficulties and had to suspend or maintain operations with low capacity, leading to underemployed, low incomes and job opportunities.

However, with the focus on leadership of Provincial Party Committee, the central direction and administration of Provincial People's Committee, together with the efforts and consensus of all levels, sectors, business community and people in the province who had seriously implemented the policy of the Government, central ministries and branches in the "dual goal" of both fighting the epidemic and developing the economy, the epidemic in the province was quickly controlled, socio-economic gradually recovered and achieved many positive results. In which, the target of gross domestic product (GRDP) has always maintained a positive growth rate, reaching 4.19% in 2020 and 1.20% in 2021; however, the target of per capita income in the province has decreased in the past 2 years, with a decrease of 6.86% and 11.98% respectively.

This paradox is because the method of calculating GRDP is different from the method of calculating people's income. While calculating people's income must deduct taxes, fees, and depreciation, when calculating GRDP, taxes, fees and asset depreciation are included. In 2021, people's income only accounted for 56.1% of the province's GRDP, while the rest was included taxes, fees and property depreciation.

Furthermore, the calculation of the economy's GRDP is the set of all permanent institutional units with economic interest in the province. A part of the province's GRDP growth is contributed by the FDI sector (the added value of the FDI sector in 2020 accounted for about 22.2% of GRDP) and enterprises in other provinces and cities investing in the province, while the profits of this area are transferred abroad or to other provinces and cities, so it has no meaning in improving residential income.

In order to help people increase their incomes and improve their lives, a number of solutions have been implemented by all levels and sectors in the province, such as converting to crops and livestock of high quality and value, suitable to local conditions, paying attention to improving quality over quantity of products; attracting businesses in the fields of technology, telecommunications and logistics; adopting policies to support people to start-up and innovate; building a smooth e-commerce network, training a qualified and skilled workforce, improving labor productivity to meet the increasing demands of the society./.

By Le Ba Ho (Long An Statistical Office) - Translated by Q. Thien

Source: https://baolongan.vn/tai-sao-grdp-tang-nhung-thu-nhap-chung-cua-nguoi-dan-lai-giam-a152710.html