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Poverty reduction in Viet Nam: Outstanding achievements and solutions to overcome limitations in the near future
5/4/2016 15:10' Send Print
Despite achievements in hunger eradication and poverty reduction in Viet Nam, there remain many shortcomings to be overcome in the near future. Image: kinhtenongthon.com.vn

From 2005, the State has issued more than 70 legal documents on poverty reduction, including two Government Resolutions (1) on rapid and sustainable reduction of poverty. In particular, Resolution No. 15-NQ/TW on 1 June 2012 of the Party Central Committee, 11th Tenure on some issues of social policy in the period of 2012-2020 identified drastic solutions on job creation and poverty reduction continued giving priority to poverty reduction in poor districts, ethnic minority regions, border communes and safety communes, especially difficult communes and villages, coastal areas and islands, and amended and supplemented policies to support poor households in sustainable poverty reduction.

Some notable achievements

Thinking on poverty reduction has been renewed in line with the process of socio-economic development of the country. Before 2000, hunger eradication and poverty reduction focused on delivery of food and foodstuff; in the period of 2000-2015, it extended to provide non-food assistance and in the of period 2016-2020, it has taken multidimensional approach.

Poverty reduction is carried out simultaneously at all levels. Poor people and families have been supported to develop production. They have had access to health services, education, vocational training, legal assistance, housing and clean water. In especially difficult communes, investment has been made in building essential infrastructure. Concrete results are as follows:

Preferential credit policy (2) has been extended from poor households to near-poor households and households which have just escaped poverty. In the period of 2012-2014, loan interest rates continued falling to 0.55%/month. In 2014 alone, 444,995 turns of poor households got loans with a total amount of VND 9,805 billion, 516,665 turns of near-poor households got loans with a total amount of VND 11,079 billion, and 144,219 students got credit loans worth of VND 4,126 billion. Preferential credit policies have created opportunities and capability in support of poor households in production, job creation, and escape from poverty.

Attention has been given to healthcare for the poor, especially policies to support poor people acquiring health insurance cards and free medical care for poor people and people with difficulties. In the period of 2012-2014, on an annual average, VND 12,500 billion from state budget were spent to assist health insurance for the poor, ethnic minorities, children under 6 years of age, and assistance for near-poor households, and students. Thus, more than 55 million poor people and ethnic minority people were provided with free health insurance cards. More than 15% of people of near-poor households who bought health insurance received support from the state budget worth 70% of insurance value.

Policies on assistance to the poor in education, training and vocational training have boost the proportion of poor children go to school at the right age, and increased percentage of poor people receiving vocational training. In the past 3 years, on an annual average, nearly VND 8,000 billion from the state budget were allocated to support poor students with school fees, and scholarships for minority students, students in boarding schools and boarding schools for ethnic minorities. Thus, more than 8 million poor students were exempted from school fees while receiving meal assistance (3); approximately 200,000 poor workers received free of charge vocational training and job creation; over 10,000 laborers in the poor districts were supported in vocational training, and guidance and worked abroad. The total budget allocated for vocational training and labor export program in 4 years reached VND 3,870 billion.

Policies on housing, land, agricultural land, water, electricity subsidies, and legal aid have helped stabilize their lives, create jobs and raise incomes for the poor. In the period of 2012-2014, more than 500,000 poor households were supported with housing; at the same time, the State supported by providing pilot huts for 700 poor households with an aim to improve safety, and respond to floods in seven provinces in northern central region and coastal areas in the central of Viet Nam. In 2014, the policy on supporting poor households building houses to prevent flashflood and flood in the northern central region and the coastal areas of central Viet Nam officially came into effect, providing 570 households with a capital of VND 168.4 billion.

In this period, the State spent nearly VND 1,000 billion to support cultivable and residential land, and clean water for ethnic minorities. Localities provided drinking water for 15,764 households, built 910 concentrated water projects and allocated 2,738ha of cultivable land (4). About 88,961 poor people received free legal assistance in various forms, such as legal advice, participation in proceedings, extrajudicial representation, free distribution of pamphlets, and CDs for dissemination of knowledge on legislation. On average, each year, the state spent VND 820 billion to support electricity for 2.3 million poor households in daily life and production.

The Program 135, Resolution No. 30a, Resolution No. 80 of the Government reaching out to the poorest areas, especially difficult communes, coastal regions, island and ethnic minority regions and the poor districts have rendered rapid changes in production, promoting economic restructuring in agriculture to make production associate with market, reduce development gaps between nationalities and between areas. Infrastructure of poor districts and communes has been consolidated, significantly contributing to improve transport systems, reduce production costs, and geographic disparities.

Poverty reduction program has engaged the political system, people of all strata and overseas Vietnamese. With the participation of the whole community, resources mobilized for alleviation of poverty have been increased. The fund for medical care for the poor and the fund “Day for the Poor” have been established. The role of socio-political, and socio- professional organizations and businesses in hunger eradication and poverty reduction has be strengthened; the legal environment for mobilization of the community in supporting the poor has been increasingly improved.

Viet Nam was completed ahead of time the Millennium Development Goals “reducing by half the number of extremely poor people worldwide by 2015” and was recognized by the international community as a good example in the fight against hunger and poverty. Viet Nam eradicated hunger since 2000 and shifted focus to achieve the objectives of sustainable poverty reduction. Poverty rate in the country felt from 58% in 1993 to below 4.5% by the end of 2015; the national poverty rate fell on an average by 2%/year; poverty rate among poor households in poor districts decreased averagely 5%/year. The life of the poor people has been gradually improved; the socio-economic infrastructure in rural, mountainous and ethnic minority areas, and especially difficult areas have been enhanced, helping reduce the increasing gap in income and living standards between regions and population groups. In the period of 2002-2010, the Gini coefficient ranged between 0.42 to 0.43, falling to 0.41 in 2014 (5).

Some restrictions and causes

Besides outstanding achievements, limitations remain in hunger eradication and poverty alleviation:

- The national poverty line is generally low and does not meet the minimum standards of living and slow to be adjusted;

- Some policies support heavy subsidies, creating the psychology of waiting for and relying on support from the State, and failing to encourage poor people to strive to get out of poverty;

- Awareness of responsibility towards hunger eradication and poverty reduction and responsibility of a number of local authorities are not sufficient. A part of the poor people are not aware of their own responsibilities, and lack determination to get out of poverty. New poverty criteria focus on income poverty, while the low poverty line leads to the high rate of near-poor households;

- Results of poverty reduction are not sustainable; disparities between regions and population groups have not been narrowed. Currently poverty concentrates mainly in the northern mountainous region, the high districts of central coastal region and the Central Highlands. In many areas, the poverty rate remains above 50%, in some districts, the rate is 60% - 70%; poor households as ethnic minorities account for almost 50% of poor households nationwide;

- The mechanism to coordinate, guide and operate at all levels, the mechanism of decentralization and delegation are limited and inadequate; accountability is unclear. In particular, monitoring and evaluation have not been organized in a systematic and synchronized way. The system of criteria for monitoring, supervision and evaluation has not been unified.

The above limitations are due to the following reasons:

First, although the State has prioritized investment resources for poor districts, especially difficult communes, ethnic minority and mountainous areas, the level of investment and support is low compared with real demand; on the other hand, policies to support near-poor households and households which have just escaped from poverty to ensure the implementation of sustainable poverty reduction targets have been promulgated slowly.

Second, coordination between ministries, central agencies and socio-political organizations has been irregular, particularly in policy development, information sharing, inspection and evaluation of poverty reduction policy and program results.

Third, guidance on the implementation of educational and training policies towards ethnic minority semi-boarding students, and towards poor and ethnic minority people in some localities has not been detailed and effective.

Fourth, some localities have not paid due attention to rational delegation of responsibilities among departments and branches in implementing policies to support production for poor households’ livelihood; a large portion of capital was allocated to infrastructure. But investment has been the scattered, and inconsistent without focus, falling short of criteria of new rural construction.

Fifth, communication, advocacy, awareness raising about poverty reduction have not been held regularly; part of the poor people have not proactively strive to escape poverty but relying on support from the State and community.

Solutions

Promoting achievements and overcoming above-mentioned shortcomings and constraints, efforts must be made to realize following solutions:

First, accelerate economic reforms, creating momentum for growth to generate resources for rapid and sustainable poverty reduction, and reduction of the increasing gap between regions and target groups.

Second, strengthen proactive measures to support the poor through active labor market policy (credit loans, vocational training, employment connections for poor households with labor force).

Third, continue to review and propose amendments to poverty reduction policies in accordance with Decision No. 2324/QĐ-TTg on 19 December 2014 of the Prime Minister issuing the Plan of Action to implement Resolution No. 76/2014/QH13 of the National Assembly to accelerate the implementation of sustainable poverty reduction targets by 2020 to reduce policies on direct assistance and gradually increase lending, conditional assistance and repayment in order to enhance poor households and near-poor households’ ownership, and encourage poor households strive to escape poverty. Attention must be paid to building and replicating effective models of poverty reduction, production linkage, processing and consumption between poor households and regions with scientists and businesses.

Fourth, push up the implementation of Resolution No. 30a, Resolution No. 80 of the Government and The National Target Program on Poverty Reduction and give priority to ethnic minority people in poor border districts and communes, safe areas, especially difficult communes and villages, coastal areas and islands. Resolutely implement the the National Target Program on Poverty Reduction to ensure the achievement of poverty reduction objectives in the period of 2016-2020 through multidimensional approach, and sustainable poverty reduction.

Fifth, ensure resources and increase medium-term investment resources of the State for policies and programs on poverty reduction, give attention to policies that prioritize allocation, rational and effective use of resources, and ensure effective integration of policies and resources.

Sixth, continue to study and readjust policy on preferential credit for poor households, and near-poor households in line with characteristics of regions, fields of production, businesses of households, adjust loan amounts, interest rates, loan terms to be consistent with policies on extension of agriculture, industry, forestry, fishery and transfer of science and technology, build and replicate the model of poverty reduction in association with local communities in the localities.

Seventh, implement policies on conditional assistance to target beneficiaries, localities and duration to increase access and encourage poor people’s proactive and active participation. Maintain and supplement appropriate policies to support near-poor households and households which have just escaped from poverty. Give priority to investment in infrastructure and development, improve human resources’ quality to ethnic minority regions, poor districts and poor communes, security communes, border communes, especially difficult communes and villages, coastal areas and islands.

Eighth, focus on solving the problem of land-less ethnic minority households, allocate cultivable land to or assist at least 80% of poor ethnic minority and poor households in especially difficult communes and villages who lack cultivable land to change their jobs, provide vocational training, generate jobs, and increase income for ethnic minority households who have not been provided with cultivable land.

Maintain policies to assist students of poor families, and near-poor households, heighten the percentage of students going to school at the right ages in disadvantaged areas, especially difficult regions, build more boarding and semi-boarding schools for ethnic minority pupils in suitable scales, renovate and improve the efficiency of students selection, nomination, training and use.

Integrate multidimensional poverty reduction targets into annual and five-year socio-economic development programs and plans. Ensure at least 90% of near-poor households participating in health insurance schemes, 70% of communes meeting the national criteria on health, over 90% of the commune health stations eligible to medical examination and treatment with health insurance, adjust the investment structure for health care and health insurance to facilitate access to health services, health care for the poor and near-poor people.

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(1) Resolution No. 30a/2008/NQ-CP on 27 December 2008 of the Government on Program to support rapid and sustainable poverty reduction in 61 poor districts; Resolution No. 80/NQ-CP on 19 May 2011 of the Government on orientations for sustainable poverty reduction in the period of 2011-2020

(2) Preferential credit programs for the poor: The Program on loans for housing under Decision No. 716/QĐ-TTg, dated 14 June 2012 of the Prime Minister on piloting assistance to poor households to improve safe residence and respond to flashfloods and floods in northern central Viet Nam and coastal regions in central Viet Nam; The Program on loans under Decision No. 15/2013/QĐ-TTg dated 23 February 2013 of the Prime Minister on credit to near-poor households; The Program on loans under Decision No. 2621/QĐ-TTg dated 31 December 2013 of the Prime Minister on amendments and supplements to a number of assistance levels to develop production stipulated in Resolution No. 30a/2008/NQ-CP, dated 27 December 2008 of the Government on Program to support rapid and sustainable poverty reduction for 61 poor districts; The Program on loans under Decision No. 48/2014/QĐ-TTg dated 28 August 2014 of the Prime Minister on policies to assist poor families build houses to prevent storm and flood in the central region of the Prime Minister; The Program on loans under Decision No. 755/QĐ-TTg dated 20 May 2013 of the Prime Minister supporting poor ethnic minority people and poor households in especially difficult communes and villages in terms of residential land, cultivable land, and clean water; Decision No. 28/2015/QĐ-TTg dated 21 July 2015 of the Prime Minister on credit to households which have just escaped poverty.

(3) According to Decree No 49/2010/NĐ-CP amended by and supplemented by Decree No. 74/2013/NĐ-CP

(4) According to Decision No. 1529 /QĐ-TTg of the Prime Minister

(5) Estimated according to the survey on household living standards in 2014 conducted by the General Statistics Office

This article was published in Communist Review, No. 880 (February 2016)

Pham Thi Hai ChuyenThe Minister of Labor, Invalids and Social Affairs