[hepr-vn] Vietnam leads the way in tackling poverty

[Vern Weitzel]

http://english.vietnamnet.vn/social/2008/02/768857/

Vietnam leads the way in tackling poverty
10:31' 16/02/2008 (GMT+7)

VietNamNet Bridge - World Bank Country Director for Vietnam Ajay Chhibber has 
praised Vietnam’s poverty reduction efforts, saying over the past 15 years 
Vietnam has achieved one of the world’s fastest declines in poverty thanks to 
its inclusive development policy.


In an article published on the UK’s The Banker in February edition, Ajay 
Chhibber wrote that the country’s poverty rate – measured as the percentage of 
people who live below US$1 a day – has declined from about 58 percent in 1993 to 
16 percent in 2006, or about 34 million people have escaped poverty. The annual 
steady and rapid growth of about 7-8 percent has been a key factor in this 
reduction.

“But what marks Vietnam out from other-fast growing economies such as China and 
India is the combination of spectacular growth with a limited increase in 
inequality,” said Ajay Chhibber. “The Gini coefficient, a measure of income 
inequality, has increased from 0.34 in 1993 to 0.36 in 2006 – lower than in 
other emerging economies – which helps explain the dramatic poverty reduction. 
The depth of poverty, measured by what proportion of the poor are close to the 
poverty line, is declining rapidly, so we could expect many more people to 
escape poverty in the near future.”

The secret of success

The World Bank Country Director pointed out causes leading to the success in 
Vietnam.

First, he said that unlike in many other countries, growth and poverty reduction 
has occurred in both rural and urban areas. While urban poverty is much smaller 
– about 4 percent of the urban population in 2006 – rural areas have also seen 
rapid poverty reduction. About two-thirds of the rural population was considered 
poor in 1993 and the figure has reduced to one-fifth today.

Second, poverty reduction has occurred in all parts of the country. It is much 
lower in the Mekong and Red River delta than in other areas, but the decline in 
poverty has also been felt in the Northern Mountain and Central Highlands, where 
poverty is relatively higher. No region has been left out.

Third, poverty is much lower among the Kinh and Chinese people compared to other 
ethnic groups. But even among ethnic minorities, while poverty remains high, it 
has shown a steady decline in the past 15 years.

According to Ajay Chhibber, literacy, trade and infrastructure are the three 
factors leading to Vietnam’s inclusive growth. The country’s drive towards 
literacy began as early as 1945 and picked up through the 1970s and 1980s. A 
final major push for universal literacy was made in the 1990s, when provincial 
and commune-level literacy campaigns were launched. Today Vietnam has achieved 
more than 95 percent literacy, higher than China and India, which has been a key 
factor in achieving inclusive growth.

Vietnam’s openness to trade at more than 150 percent (its trade ratio defined as 
exports plus imports over GDP) is one of the highest in the world and another 
key to inclusive growth. From a food deficit country in the early 1990s, Vietnam 
has emerged as a big exporter of agricultural products. The country’s 
far-sighted bilateral and World Trade Organisation trade agreements have also 
helped bring in huge levels of foreign direct investment, almost US$16billion or 
more than 20 percent of GDP in 2007, and made it a major exporter of apparel and 
light industrial products and wood products with huge employment benefits to the 
economy.

Finally, infrastructure, especially connectivity to rural areas, with one of the 
world’s most impressive rural electrification and rural road programmes, has 
ensured that remote areas are not left behind. Today, almost 95 percent of 
Vietnamese households have electricity connections, compared to only 50 percent 
in the early 1990s, and 90 percent of the population are within two kilometres 
of an all-weather road. This has allowed connectivity between rural and urban 
areas, to the major ports and transport networks, and access to radio and 
television, even in remote areas.

As Vietnam races toward an average per capita income of US$1,000 and 
middle-income nation status by 2009, the big question is whether the inclusive 
development pattern so far can be sustained. To do so, Vietnam must help its 
citizens access higher education to ensure that rural productivity is lifted as 
it industrialises further and that its ethnic minorities are provided 
opportunities to develop so they are not left behind. It must also build a 
modern social safety net for those who could be left behind and ensure that its 
growth does not come at the cost of its environment. But as it meets these 
challenges, Vietnam has left behind a record of inclusive development, which 
others can learn from, concluded Ajay Chhibber.

(Source: VOV)