The UN Resident Coordinator in Viet Nam, John Hendra, made a presentation at the 9-10 June, Mid-term Consultative Group meeting in Rach Gia, southern Kien Giang Province. At the meeting, where international development partners assessed the development work in Viet Nam, Hendra asked about the Government's commitment to linking "economic growth with social progress and equality" that it made in the draft SDEP (socio-economic development plan).
He asked how the Government's commitment would reach Vietnam's most vulnerable with programmes like better health care, poverty reduction and reduced maternal mortality rates. He said in terms of the Millennium Development Goals (MDG), the aggregate figures were good but certain groups including informal workers especially women, unemployed agricultural workers and ethnic minority groups from remote and mountainous areas were still behind.
"Development partners welcome the attention the Government is giving to ensuring that growth in Viet Nam will be inclusive. Viet Nam has had a long history of impressive poverty reduction, and we share with you the desire to see this continue. However, poverty reduction strategies over the next five to ten years will require a different approach, and economic and social policy need to be seen as two sides of the same coin, particularly to ensure that inequality of opportunity does not undermine Viet Nam's progress.
Inclusive growth is necessary to support rapid and sustainable poverty reduction and ensure that people can contribute to and benefit from Viet Nam's progress. Inclusiveness means ensuring equality of opportunity, equitable access to markets and resources, and an unbiased regulatory environment for individuals and businesses. It is critical if Viet Nam is to achieve the ambitious agenda and targets set for the next 5-10 years by the socio-economic development plan (SEDP) and Socio-Economic Development Strategy (SEDS).
Rapid industrialisation and urbanisation is also part of the SEDP's vision for economic development in Viet Nam, but needs to be complemented by a greater understanding of its impact on inequality. For example, approximately 700,000 jobs lost in agriculture will be coupled with an increase of young labour market entrants over the next five years. These workers are likely to end up without a living wage in the absence of targeted labour market strategies. Agriculture is the largest source of employment and earnings in Viet Nam and has been one of the main drivers of poverty reduction over the past two decades. Productivity is still increasing, though slowly. This underscores the importance of improving small scale and intermediate technology transfer, and both graduate and vocational skills for agriculture in particular for remote and mountainous areas.
Opportunities for the majority of Viet Nam's workforce also need to be broadened – and 80 per cent of this workforce are concentrated in the informal economy. The informal economy has certainly contributed to past development achievements. However, informal workers often face low and irregular incomes, poor working conditions, difficult access to skill development, and limited protection through labour legislation and social security benefits. And women are particularly affected, as they predominate in the poorest, most vulnerable and lowest paid informal sector jobs.
It is important to understand how Vietnamese authorities will adapt policies and institutions to cater for the protection of informal workers and the recognition of informal activities. A system of incentives to promote formality, combined with an efficient regulatory framework needs to constitute the guiding principle of Government strategies and plans. Policies also need to acknowledge the role that small businesses play in creating employment, and the contribution they make to GDP. In particular, the SEDP needs to pay greater attention to micro-businesses, and the environment necessary to ensure that workers in this sector can achieve a decent standard of living.
Inclusive growth also requires having social protection systems in place to support the vulnerable, and those in need - to ensure they don't fall back into poverty, and can share the benefits of greater economic growth. We congratulate the Government for its efforts in developing the new social protection strategy for Viet Nam, and hope that a phased roadmap for its implementation will be developed soon.
One of the main challenges in this new strategy is access to healthcare. Development partners welcome the important commitments of the new SEDP, for example to ensure 80 per cent of the Vietnamese population is covered by health insurance by 2015, and to significantly improve the quality of the healthcare system at all levels during the next five-year-period. However, it is not clear how the Government aims to achieve these objectives. Institutions implementing health insurance need to be strengthened for example, and the efficiency and effectiveness of expenditures by the fund need to be monitored. Improving the quality of health care will also require additional resources, and it is not clear where these will come from over the next five years.
Viet Nam has achieved remarkable success in reducing poverty over the past 15 years. However, poverty still affects an estimated 15 per cent of Vietnamese people, including around 50 per cent of the ethnic minority population. Strategies for poverty reduction that have worked in the past are unlikely to be effective for this "last 15 per cent" and different and innovative approaches are needed. The draft 2011-15 SEDP states the ambition to further reduce poverty by 2 percentage points per year. It also acknowledges that the poverty context has changed by referring to the introduction of a new national poverty line, which has not been adjusted since 2006 in spite of high inflation, particularly in 2007 and 2008. Although this is an important aspect of improving poverty measurement under current socio-economic conditions, anti-poverty measures in Viet Nam remain solely monetary-based and do not consider poverty from a human development or multidimensional perspective.
Programme 135 on poverty reduction and the National Target Programme on Poverty Reduction are currently being prepared for 2011-15. The baseline study for Programme 135 programme contains a wealth of extremely valuable information, but it is not clear to what extent it has been used in designing new poverty reduction programmes. In addition to improving measurement and analysis, and in view of the numerous overlaps between different poverty reduction programmes, it is generally acknowledged that the effectiveness of poverty reduction efforts would benefit from an overarching poverty reduction policy framework.
Viet Nam has made significant achievements in relation to achieving the Millennium Development Goals (MDGs) and is on track to achieve most of the targets set by the MDGs by 2015. However, an "unfinished agenda" remains in relation to several of the MDGs including maternal mortality and malnutrition, and water and sanitation.
Progress at the aggregate level masks significant disparity between different groups and regions in relation to achieving key MDG targets and indicators. For example, infant mortality is significantly higher than average in regions such as the Central Highlands and the north. And as is well known, maternal mortality is much higher in certain regions and among ethnic minority populations while the Maternal Mortality Rate (MMR) is static at the aggregate level.
In conclusion, development partners congratulate the government on the commitment made in the draft SEDP. "We stand ready to support the government in ensuring that growth is inclusive, ensuring level playing field for individuals and businesses, and broadening opportunities and access for all." — VNS