Poverty in Vietnam

As in many other developing countries, hunger and poverty in Vietnam has existed for a significant amount of time. Until the 1980s, most of the Vietnamese population still lived under the poverty line. However, thanks to 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 is now a middle income country with per capita income of US $1,910 by the end of 2013.^[1] 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.^[2] The 2014 Global Hunger Index (GHI) Report ranked Vietnam 15th amongst 81 nations suffering from hunger, with a GHI of 7.5 compared with 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.^[3] Achievements in poverty reduction and hunger eradication have been highly appreciated by the international community and viewed overall as successful in furthering economic development. However, Vietnam still has many tasks ahead in fighting against poverty reduction and hunger eradication, particularly for vulnerable groups such as ethnic minorities, and the disabled.^[4]

Poverty and demographics

There are a wide range of causes of poverty, however poverty derives mostly from demographic elements:

• The majority of the poor are farmers. In 1998 almost 80 percent of the poor worked in agriculture.^[5]
• The majority of the poor live in rural, isolated, mountainous or disaster prone areas, where physical infrastructure and public service are relatively undeveloped.^[5]
• The poor often lack production means and cultivated land.^[5]
• They have limited access to the state credit and often access through back credit with very high interest .^[5]
• The households often have many children but few laborers .^[5]
• The poor are disproportionately likely to be from an ethnic minority. The percentage of households with heads coming from ethnic minorities increased from 17,8 percent in 1993 to 40,7 percent in 2008.^[5]
• The poor have limited education: people who have not completed primary education account for the highest rate of poverty.^[5]
• Rural households consisting of only women and children are particularly vulnerable to poverty because the number of dependents is relatively high compared with the available labor force.^[5]...

Provision on poverty line

Poverty line applied for the period 2005 – 2010

Based on the state of the socio–economic development, the government promulgates the poverty line for each stage. The ordinance of the poverty line applied for the period 2005 – 2010^[6] 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 $195 ) 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^[7] 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.^[4] 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 referred to as the 135 program. The program’s target is to:

• Promote production and increase living – standard for ethnic minority households;
• Develop infrastructure and develop public essential public service in the localities such as electricity, schools, health clinics, small irrigation system, roads, clean water providing systems;
• 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.^[5]

Assistance from the international community

As an 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.^[5]

Collaboration between parties

Reduction in poverty is only successful if all parties from the Government to civil society and donors, from central to local Government and people themselves involve in the process. However, it is essential that the roles and responsibilities of the various stakeholders are assigned clearly and specifically. 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 related stakeholders, for the management and delivery of poverty reduction activities.^[5]

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, single parents, orphans and others whereas the area – based program is to spend on emergency relief to provide aid to natural disaster victims.^[4]

See also

• Health in Vietnam
• Vietnam – Economy

• Economy of Vietnam

References

Additional sources

• Vandemoortele, Milo; Bird, Kate (2010). "Viet Nam's Progress on Economic Growth and Poverty Reduction: Impressive improvements". London: Overseas Development Institute.