VietNamNet would like to introduce an article by Dr. Pratibha Mehta, United Nations Resident Coordinator in Vietnam about poverty reduction in the country.

Over the last 25 to 30 years Vietnam has rightly earned a global reputation for rapid and sustained reductions in poverty. The success has been supported by Vietnam’s bold but phased transition, beginning with the Doi Moi (Renovation) reforms in 1986.

The national poverty headcount, measured in different income or expenditure thresholds, has tumbled remarkably, for example from short of almost 60 per cent in 1993 to just above 11 per cent of the population in 2012 if a comparable threshold is used.  Early indications from work on the data for 2014, is that that further reductions have taken place.

Equally remarkably, the depth of poverty has been falling as reflected in the more distributional sensitive measures – the Poverty Gap and the Severity Index. And over the same period, inequality, measured by the Gini Coefficient - a measure of expenditure inequality, has increased only slightly. Vietnam’s Human Development Index – a measure of the broader development - has improved by some 35 per cent since 1990, and now the country ranks in the upper half of the Medium Human Development Category.   

These positive trends have been driven by rapid, fairly consistent and high labor intensity economic growth, and Vietnam’s integration within global trade. There have also been contributory demographic changes – ongoing migration to the cities, declining birth rates and with it, changing household sizes and structures. In the streets of its major cities - Ha Noi, Ho Chi Minh City and Da Nang - latter day Vietnam is coming to resemble its forerunner East Asian Tigers.

Yet, as many Vietnamese and national commentators tell, all is not so rosy in the garden. Vietnam’s fight against poverty is incomplete and it’s running out of steam. Economic growth has declined considerably since 2008 and remains locked into a subpar 5 per cent per year. Crucially, poverty is unevenly distributed - severe deprivation is experienced by particular groups and the Ethnic Minorities especially so.  Data shows the poverty headcount for these groups remains close to 60 per cent and for some minorities the rate reaches over 90 per cent.  Ethnicity and geography, given minorities almost exclusively live in remote upland areas, are now the primary predictors of poverty status – and over 50 per cent the poor nationally, now come from these communities. Absolute deprivation in Vietnam is becoming a non-mainstream concern and the poor are becoming a group apart from society.

Major gaps are also evident in other Millennium Development Goal outcomes. In the crucial areas of health and education, for example, the Infant Mortality Rate among minorities is about 30 per thousand live births versus 10 for the majority; and the stunting rate is 41 per cent compared to just 20 per cent; the primary and lower secondary school enrollment rate remains 83% compared to close to 100% for the Kinh group. Deprivations suffered are not just physical. The consultation on the Post 2015 goals in Vietnam showed that ethnic minority groups feel increasingly vulnerable to economic shocks and climate change, and that their community and cultural bonds are diminishing.

Others too have been left behind in Vietnam’s ascent to low middle income status. I have learnt that to understand poverty in Vietnam one has to look beyond the averages and the sound-bites.  As I’ve travelled around the country, I have had the chance to meet some of those who have been left behind, including young unregistered migrant workers in urban areas, the disabled and elderly, widows and struggling single-headed households. I’ve been struck by their resourcefulness and courage, but too many still struggle against extreme poverty and inequality, with limited opportunities. And this is in spite of the often genuine efforts of the Government.

Underpinning these outcomes is an increasingly unequal pattern of development that tends to exclude disadvantaged people. This disconnect has worsened as growth has slowed after the 2008 financial crisis, and for the hard to reach poor, growth alone cannot be the silver bullet it once was.   Rejuvenation of Vietnam’s economic model would help hugely, but new approaches are needed to improve the lives of the poorest people. This requires a shift in the way we think about poverty, with a focus on the most poor and those who are chronically deprived. This means a much greater emphasis on helping people up, and breaking the pernicious cycle of intergenerational deprivation. Until now, policymaking and efforts have focused on helping people who are close to the poverty line. But for the chronically poor, who often experience multiple disadvantages, escape is very difficult and likely to be short-lived. The poorest often lack the skills, education or assets (such as land) to permanently exit poverty and are highly vulnerable to shocks such as illness, loss of job and extreme climate events. For these families the risk constraints are biting - they simply cannot make the leap to new activities or make productive investments in their futures.

There are many things to be done, but for me, four priorities stand out.  

First, we need better information on these groups, and a diagnosis of the factors which keep them in poverty. This literally means getting behind the data and digging deeper - drawing on qualitative, and notably ethnographic, analyses. Sub-household data and dedicated studies of intra-household allocations and gender relations would be very helpful to developing solutions to close the gender gaps. Methods such as multi-dimensional poverty measurement that the Government is now piloting, offer new insights into the key drivers and a wider view of the deprivations suffered.

Secondly, Vietnam needs to invest more in social assistance, which provides a decent safety net and encourages people to make investments and take the necessary actions to get out and stay out of poverty. Data for Vietnam suggests that transfer levels and the coverage of the Human Life Cycle are inadequate.  Higher investments in social assistance not only help improve equity, but can make a contribution to longer term economic growth.     

Third, it is timely that Vietnam looks again at core public services, chiefly education and health. This includes revisiting the impact of socialization on the life chances of the poor and near poor groups. Free and subsidized health insurance has contributed to some good progress on healthcare.  But Government needs also to invest in delivering better quality education. Good schooling enables people escape from poverty and to achieve greater prosperity.  Education knowledge and skills help make families and individuals resilient to shocks. The delivery challenge in Vietnam’s schools is not only about access, quality, and reliability (see link for a discussion), but also securing equity between groups and empowering the most vulnerable.

Fourth, better regional policy and well-tailored interventions are vital. The Nationally Targeted Progarmmes, given the resources deployed, could have achieved more if greater local tailoring and people empowerment had been used. Pilot initiatives in poorest provinces of Vietnam show that funding in the form of block grants (from a community development fund) that empowers poor women, men and their communities in defining solutions, formulation of plans, implementation and management had the best results.

The theme of this year International Poverty Day –“Leaving no one behind” strikes me as particularly well fitted to today’s poverty reduction challenge in Vietnam. History has demonstrated this country’s ability to overcome all manner of adversities. It is now time for Vietnam to run the final difficult mile and ensure the eradication of absolute poverty, which mainly afflicts ethnic minority communities and particularly disadvantaged groups.   

Dr. Pratibha Mehta