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VietNamNews

Income not the only measure of poverty

Update: June, 17/2013 - 10:16

Viet Nam's poverty rate is estimated at around 10 per cent but the number of people who do not achieve social well-being is believed to be much higher. It's necessary to go beyond income when defining people's experiences.

As a lower middle-income country, Viet Nam needs a new yardstick to examine poverty to include those who are deprived of access to social services.

This is particularly important in the context of government policy discussions on poverty reduction at the ongoing fifth session of the 13th National Assembly and also in anticipation of the mid-term review of the National Target Programme on Sustainable Poverty Reduction (2011-15).

Viet Nam News reporter Le Thu Huong talks to several people involved in the issue.

Do Manh Hung

Many middle-income countries such as Mexico, Malaysia and Colombia have begun to apply multi-dimensional poverty concepts to policies. Is Viet Nam taking into account the many aspects that contribute to poverty?

Do Manh Hung, vice chairman of the National Assembly Committee on Social Affairs

The target now is to reduce poverty sustainably. Viet Nam has done remarkedly well in poverty reduction over the past two decades, scoring high recognition from the United Nations and other international partners.

There are, clearly, many unsustainable elements in our ways of reducing poverty. The living standard and the level of social protection for poor people have not been well-maintained. The number of households returning to poverty is high. The core poor region is mostly in mountainous areas where a large number of ethnic groups live. The next period requires greater efforts to reduce poverty sustainably.

That requires us to apply a multi-dimensional approach to poverty. We have seen cases where local authorities blindly rely only on income to determine that a particularly household has gone out of poverty and do not take into account that family members are in dire need of health support.

We often lay out the target to reduce poverty by 2 per cent every year. These numbers do not reflect the comprehensive picture of poverty reduction in many areas. There are even districts and communes ordering their villages to fix the percentage of poor households at 10 per cent no matter what the conditions are.

Another task is to promote people's participation at grassroots level and allow the poor to be heard. Many localities have the attitude that the poor are a burden to development. They have no voices in policy making and implementation.

I believe increasing people's participation will only empower their creativity and desire to get out of poverty, which in return creates tremendous resources we need to take advantage of.

Nguyen Trong Dam, Deputy Minister of Labour, Social Affairs and Invalids

Our policies on poverty reduction have so far considered all people under the poverty line to be poor. We do not have enough data and evidence on the factors that contribute to the vulnerability of the poor.

We have focused largely on income measurement and not sufficiently on access to services in health, education and housing. Poverty is clearly not a one-dimensional issue.

Ngo Truong Thi, deputy head of the Social Welfare Department, MoLISA/head of the Co-ordination Office for Poverty Reduction Programme

Ngo Truong Thi

Using only one dimension, which is income, to measure poverty can leave a lot of people who need help out of the loop. People demand other basic and social needs.

It took Mexico several years to build its methodology and database and adopt its first national multi-dimensional poverty measures in 2009. If we calculated multi-dimensional poverty in Viet Nam, I'm sure the poverty level would be much higher. It would allow us to better differentiate the levels of poverty so that our policies don't leave anyone out.

Professor John Hammock, co-founder of the Oxford Poverty and Human Development Initiative, University of Oxford

Usually, poverty is measured by income, how much people earn or consume. That's the traditional way. We also need to measure some of the social reasons that people are poor. People are poor because they don't have enough education or health services or nutrition. Income is important but that does not necessarily mean the money that comes into the home is used on education and health.

A multi-dimensional poverty index allows governments to be more effective and efficient with their budget.

What steps must Viet Nam take to apply this approach to poverty?

Thi: In Viet Nam, even though our basic poverty measurements are not multi-dimensional, our policies have covered the targeted groups and give stronger motivations for the poor to escape poverty.

However, in order to do this sustainably, we need to limit giving cash support. For the poor, under social protection policies, giving cash is necessary. However, we need to provide conditions that allow those who can work to generate income.

The Government approved Resolution 15 on social policies for the 2012-20 period, which further stresses the importance of making sure all can achieve basic living needs. This is the right time for us to develop a new approach to poverty.

Multi-dimensional poverty captures the basic rights of people. We can choose the rights already stipulated in the Constitution and use them as dimensions in our new approach to poverty. The criteria used, however, must not be based on policymakers' subjective ideas but on people's needs and desires.

We also suggest the Government and National Assembly consider developing the Law for Social Development as a legal basis for the application of multi-dimensional poverty measurements. There must also be efforts to develop clear criteria for identifying targeted groups.

If a government would like to create an official multi-dimensional poverty indicator, it must be understandable and easy to describe and able to target the poor, track changes and guide policies. It constructs a deprivation profile for each person.

John Hammock

Hammock:

Some governments decide on what the dimensions are. In others, there has been a participatory process where they have gone out to speak to poor people. Effective policy also is based on speaking to people and finding out if the numbers are real.

The criteria have to be built on government policies and priorities and data that exist. I think there are lessons to be learned from Mexico and Columbia. In Mexico, one of the lessons has been how to institutionalise the process; how the government of Mexico sets up institutions to make this work. Columbia has incorporated it to their national plans and into their social programmings.

We feel that it's possible to have an income line and also measure social deprivations. It's important to put these two together. Most countries have similar dimensions in housing, education and health. However, the dimensions have to be things that the governments are willing to work and act on. If not, it does not make any sense.

The income poverty line in Viet Nam is still considered quite low, currently at the level of VND400,000 per month or less in rural areas and VND500,000 or below in urban areas. Could this be changed anytime soon?

Hung: Clearly the poverty reduction picture in Viet Nam is getting more complex. Many people who have lifted out of poverty can easily fall back into poverty due to natural disasters or accidents. Even though we don't have official statistics, we believe that the number of people who can escape poverty and reach the middle-income level is low. Most are in the category of near-poor.

The current income poverty line does not reflect the basic needs in living standard of people. According to the plan, it could be raised by 2015.

However, the National Assembly is considering putting sustainable poverty reduction as one of the issues for monitoring and discussing in its mid-2014 session. The adjustments, I hope, can be made sooner. — VNS

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