Poverty reduction in Vietnam
As in many other developing countries, hunger and poverty in Vietnam have existing for a significant amount of time. Until the 1980s, most of the Vietnam population still lived under the poverty line. However, thanks the political and economic reform in 1986 and the government’s commitment, the status of poverty and hunger in Vietnam has been significantly improved. From one of the poorest countries in the World with per capita income below US $100 per year, Vietnam have become a lower middle income country with per capita income of US $1,130 by the end of 2010. Thereby, the poverty rate decreases gradually from 58 percent in 1993 to 28.9 percent in 2002, 14.5 percent in 2008 and 12 percent in 2011. About 28 million people are estimated to have been lifted out of poverty over approximately two decades. The 2011 Global Hunger Index (GHI) Report ranked Vietnam 25th amongst 81 leading countries with hunger situation with the GHI of 11.2 compared with the index of 27.7 in 1990 (country with extremely alarming (GHI ≥ 30), alarming (GHI between 20.0 and 29.9) or serious (GHI between 10.0 and 19.9) hunger situation. The achievement in poverty reduction and hunger eradication has been highly appreciated by the international community and seen as one of the most successful stories in economic development. However, Vietnam still has many tasks ahead in fighting against poverty reduction and hunger eradication, particularly vulnerable groups such as ethnic minorities, women and the disabled.
Poverty and demographics
There are wide range of causes leading poverty, however the poverty derives mostly from demographic elements:
# The majority of the poor are farmers. In 1998 almost 80 per cent of the poor worked in agriculture.
# Most live in rural, isolated or disaster prone areas, where physical and social infrastructure is relatively undeveloped. provided that:
* In the rural area, households with average income under the Vietnamese dong (VND) 2,400,000 per capita per year (equivalent US $150 ) are regarded as poor households.
* In the urban area, households with average income under VND 3,120,000 per capita per year (equivalent US $197 ) are regarded as poor households.
Poverty line applied for the period 2011 - 2015
The ordinance of the poverty line applied for the period of 2011 - 2015 provided that.
* The poor households in rural areas are households with average income under VND 400,000 per capita per month or VND 4,800,000 per capita per year (roughly USD $19 per capita per month).
* The poor households in urban areas are households with average income under VND 500,000 per capita per month or VND 6,000,000 per capita per year (roughly USD $24 per capita per month).
* The pro - poor households in rural areas are households with average income from VND 401,000 to VND 520,000 per capita per month (roughly US $19 to US $25 per capita per month).
* The pro - poor households in urban areas are households with average income from VND 501,000 to VND 650,000 per capita per month (roughly US $24 to US $31 per capita per month).
With the new poverty line, Vietnam’s percentage of households was estimated 12 percent at the end of 2011.
Achievements in poverty reduction
Some achievements regarding poverty reduction in Vietnam are summarized below.
Economic growth
Maintaining high economic growth to underpin further rapid reductions in poverty.<ref name ="achievement"/> The high and sustainable growth is the pre-condition to create employment, improve income and create resources needed to implement well - being and social - safety programs. The high economic growth from 2000 to 2010 was regarded as substantial cause in poverty reduction and hunger eradication.
Governmental programs
The high political determination and commitment of the government in fighting against poverty and hunger play a critical role. In the two last decades, many policies have been promulgated with huge governmental funds. The most prominent program is the socio-economic development program for the most vulnerable communes in ethnic minority and mountainous areas, also shortly so - called 135 program. The program’s target is to (1) promote production and increase living - standard for ethic minority households; (2) develop infrastructure (3) develop public essential public service in the localities such as electricity, schools, health clinics, small irrigation system, roads, clean water providing systems; (4) enhance the people's awareness for better living standards and quality of life. In the phase I (1998 - 2005), the program invested VND 9142 billion (US 571 million) from the governmental fund for 1870 extremely difficult communes. The program’s phase II (2006 - 2010) continued to cover 1879 communes with a total budget of US $1 billion.<ref name ="VNpoverty"/>
Assistance from the international community
As a under-developed country, Vietnam had been prioritized to receive Official Development Assistance (ODA) from international organizations and developed countries such as The World Bank, The Asian Development Bank, The United Nations and The European Commission. Over the last decades, these organizations have provided millions of dollars to invest for infrastructure, human resource development, public administration reform. For example, in the period of 1993-2001 a total of US $17.5 billion was pledged to the Government of Vietnam, with annual pledges remaining at a constant level in the order of US $2.2 billion each year. From this amount, the total value of signed ODA is around US $14 billion, with actual disbursements estimated to be US $9 billion.<ref name ="VNpoverty"/>
Collaboration between parties
Reduction in poverty has been successful all parties from the Government to civil society and donors, from central to local Government and people themselves has been involved in the process. However, it is essential that the roles and responsibilities of the various stakeholders be clear. Greater clarity of their roles will result in a more effective and greater coherence between them. The Vietnam Development Report (2001) suggests a way of addressing this by making a clear division of responsibility between central and local Government, the role of Poverty Reduction staff at local levels, and of other stakeholders, for the management and delivery of poverty reduction services.<ref name ="VNpoverty"/>
The social protection system
The social protection system plays an essential role for sustainable poverty reduction. In Vietnam, the current social protection system consist of three main components which are social security, social assistance and area - based programs. The social security includes social insurance, health insurance and unemployment insurance. The social assistance targets beneficiaries including the elderly aged 85 and over or living alone, the disabled, mentally - disorder patients, singer parents, orphans and others whereas the area - based program is to spend on emergency relief to provide aid to natural disaster victims.<ref name ="achievement"/>
Poverty and demographics
There are wide range of causes leading poverty, however the poverty derives mostly from demographic elements:
# The majority of the poor are farmers. In 1998 almost 80 per cent of the poor worked in agriculture.
# Most live in rural, isolated or disaster prone areas, where physical and social infrastructure is relatively undeveloped. provided that:
* In the rural area, households with average income under the Vietnamese dong (VND) 2,400,000 per capita per year (equivalent US $150 ) are regarded as poor households.
* In the urban area, households with average income under VND 3,120,000 per capita per year (equivalent US $197 ) are regarded as poor households.
Poverty line applied for the period 2011 - 2015
The ordinance of the poverty line applied for the period of 2011 - 2015 provided that.
* The poor households in rural areas are households with average income under VND 400,000 per capita per month or VND 4,800,000 per capita per year (roughly USD $19 per capita per month).
* The poor households in urban areas are households with average income under VND 500,000 per capita per month or VND 6,000,000 per capita per year (roughly USD $24 per capita per month).
* The pro - poor households in rural areas are households with average income from VND 401,000 to VND 520,000 per capita per month (roughly US $19 to US $25 per capita per month).
* The pro - poor households in urban areas are households with average income from VND 501,000 to VND 650,000 per capita per month (roughly US $24 to US $31 per capita per month).
With the new poverty line, Vietnam’s percentage of households was estimated 12 percent at the end of 2011.
Achievements in poverty reduction
Some achievements regarding poverty reduction in Vietnam are summarized below.
Economic growth
Maintaining high economic growth to underpin further rapid reductions in poverty.<ref name ="achievement"/> The high and sustainable growth is the pre-condition to create employment, improve income and create resources needed to implement well - being and social - safety programs. The high economic growth from 2000 to 2010 was regarded as substantial cause in poverty reduction and hunger eradication.
Governmental programs
The high political determination and commitment of the government in fighting against poverty and hunger play a critical role. In the two last decades, many policies have been promulgated with huge governmental funds. The most prominent program is the socio-economic development program for the most vulnerable communes in ethnic minority and mountainous areas, also shortly so - called 135 program. The program’s target is to (1) promote production and increase living - standard for ethic minority households; (2) develop infrastructure (3) develop public essential public service in the localities such as electricity, schools, health clinics, small irrigation system, roads, clean water providing systems; (4) enhance the people's awareness for better living standards and quality of life. In the phase I (1998 - 2005), the program invested VND 9142 billion (US 571 million) from the governmental fund for 1870 extremely difficult communes. The program’s phase II (2006 - 2010) continued to cover 1879 communes with a total budget of US $1 billion.<ref name ="VNpoverty"/>
Assistance from the international community
As a under-developed country, Vietnam had been prioritized to receive Official Development Assistance (ODA) from international organizations and developed countries such as The World Bank, The Asian Development Bank, The United Nations and The European Commission. Over the last decades, these organizations have provided millions of dollars to invest for infrastructure, human resource development, public administration reform. For example, in the period of 1993-2001 a total of US $17.5 billion was pledged to the Government of Vietnam, with annual pledges remaining at a constant level in the order of US $2.2 billion each year. From this amount, the total value of signed ODA is around US $14 billion, with actual disbursements estimated to be US $9 billion.<ref name ="VNpoverty"/>
Collaboration between parties
Reduction in poverty has been successful all parties from the Government to civil society and donors, from central to local Government and people themselves has been involved in the process. However, it is essential that the roles and responsibilities of the various stakeholders be clear. Greater clarity of their roles will result in a more effective and greater coherence between them. The Vietnam Development Report (2001) suggests a way of addressing this by making a clear division of responsibility between central and local Government, the role of Poverty Reduction staff at local levels, and of other stakeholders, for the management and delivery of poverty reduction services.<ref name ="VNpoverty"/>
The social protection system
The social protection system plays an essential role for sustainable poverty reduction. In Vietnam, the current social protection system consist of three main components which are social security, social assistance and area - based programs. The social security includes social insurance, health insurance and unemployment insurance. The social assistance targets beneficiaries including the elderly aged 85 and over or living alone, the disabled, mentally - disorder patients, singer parents, orphans and others whereas the area - based program is to spend on emergency relief to provide aid to natural disaster victims.<ref name ="achievement"/>
Comments