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Rural Poverty Reduction in Vientam (2019)

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Rural Poverty Reduction in Vientam (2019) REDUCING RURAL POVERTY IN VIETNAM Issues, Policies, Challenges Ngo Ha Quyen Vietnam at a glance Area: 331,211.6 km2 Population: 93,421,835 GDP per capita: USD 2,300 Growth rate: 7.08% (2018) Labor structure: 52.6% in Agriculture; 20.8% in Industry 26.6% in services Location: South East Asia Currency: Vietnamese Dong (1USD= 22,700 VND) Geography: 6 ecological regions; 63 provinces Ethnicities: Kinh (majority) and 53 ethnic minorities (~15% of population) GDP and labor force breakdown Agriculture 17% Services 27% Services 44% Labor Structure GDP Sector Agriculture 52% Industry Industry 39% 21% Vietnam's Growth/ Development Model Vietnam has made a transition from low to middle-income country - the $1.90-a-day extreme poverty rate fell from 50 percent in the early 1990s to 2 percent today Per capita income in Vietnam has gone from around $100 in the 1980s to about $2300 in 2017, PPP is >$5000. Vietnam's Growth/ Development Model Doi Moi reforms (renovation) launched in 1986 - aimed to create a socialist - oriented market economy Vietnam remains a one-party socialist state run by the Communist Party but embracing free-market policies Strongly eXport-oriented - free trade deals with South Korea, WTO, aiming for FTA with EU Growth model built on heavy inward investment and rapid transition away from farming and low value teXtiles Key drivers for growth in Vietnam Inward FDI Trade surplus Rising per capita incomes Emerging middle Favourable Increasing factor class of consumers demographics productivity Investment in State investment in Rapid urbanization tourism infrastructure Poverty Reduction Other contributing factors: Heavily invested in human capital: Health 6.3% and Education 12% of GDP (2012) Generous aid programs from international donors: technical assistances, capacity buildings for the Vietnamese government officials Various poverty reduction programs: improve living conditions, increase access to land, health insurance etc. Human Capital Mean PISA 600 math score Vietnam eXcels in international tests, scoring SGP above many rich countries HKG 550 KOR JPN MAC CHE NLD POL EST CAN Vietnam DEU AUT AUS 500 CZE SVN DNX LVA PRT USA SWE HRV ISR ROU SRB GRC 450 TUR BGR THA KAZ ARE MYS CHL MNE MEX URY 400 ALB CRI TUN ARG JOR BRA IDN COL QAT PER 350 1,000 2,000 5,000 10,000 20,000 40,000 100,000 GDP per capita (US $) Health Spending (% of GDP) 7% Vietnam Thailand 6% Cambodia China 5% 4% 3% Indonesia 2% 1% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HDI Progress Life expectancy at Expected years of Mean years of GNI per capita HDI value birth schooling schooling (2011 PPP$) 1990 70.5 7.8 3.9 1.410 0.477 1995 72.0 9.3 4.6 2.020 0.531 2000 73.3 10.6 5.4 2.615 0.576 2005 74.3 11.3 6.4 3.423 0.617 2010 75.1 12.0 7.5 4.314 0.655 2015 76.1 12.7 8.0 5.263 0.684 2016 76.3 12.7 8.1 5.589 0.689 2017 76.5 12.7 8.2 5.859 0.694 HDI Progress Vietnam's HDI and component indicators for 2017 relative to selected countries and groups HDI value HDI rank Life Expected years Mean years of GNI per capita expectancy at of schooling schooling (PPP US$) birth Vietnam 0.694 116 76.5 12.7 8.2 5,859 Philippines 0.699 113 69.2 12.6 9.3 8,395 Thailand 0.740 83 75.5 14.7 7.6 15,516 East Asia and 0.733 _ 74.7 13.3 7.9 13,688 the Pacific Medium HDI 0.645 _ 69.1 12.0 6.7 6,849 Population by Economic Class (%) § Extremely poor - less than $1.90 per day § Moderately poor - from $1.90 to $3.20 per day § Economically vulnerable - $3.20 - $5.5 per day § Economically secure - $5.50 - $15 per person per day § Middle class - more than $15 per person per day. Poverty reduction remains an issue… Who are the poor? Poor households’ characteristics Large household Low size investment Low skills Lack of supporting infrastructure Ethnic minorities Low education Remoteness Dependency on Natural Disaster agriculture Poverty rate and population distribution by topography (2016) Poverty Headcount Rate (%) Population composition with Population distribution location (%) across locations (%) Ethnic Kinh & Hoa Ethnic Kinh & Hoa Ethnic Kinh & Hoa minorities minorities minorities Urban 20.4 0.7 4.5 95.5 8.7 34.7 Rural Communes Coastal 25.4 4.1 3.4 96.6 0.9 4.8 Inland delta 12.1 3.8 2.8 97.2 6.3 41.4 Hills/midlands 9.4 1.7 6.8 93.2 1.7 4.4 Low 34.4 5.3 28.9 71.1 23.0 10.7 mountains High 57.0 10.4 72.8 27.2 59.4 4.2 mountains Source: Pimhidzai (2018) Issues, Challenges and Policies Lack of education Lower average Primary education years of schooling or even less High dropout rate, esp. in secondary schools No Kinh/Viet language fluency Distance from school Tutoring unaffordability High associated costs High opportunity (tuition fee) costs Lack of education Low agricultural income § Sub-optimal crop choice § Less yields from same crop type on same type of land Limits access to non-farm income with high and stable earnings Lack of financial capital Red River Delta 70% Northern and Midland Mountainous 78% Northern and Coastal Central 75% Central Highlands 62% Southeastern Area 84% Share of Plots with Land Mekong Delta 90% User Certificates (%), 2014 Lack of financial capital 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Has land title on plot No land title on plot Use of agricultural land as collateral (%), 2014 Land used as collateral Land not used as collateral High opportunity costs without proper social protection “We offer vocational training for women and encourage everybody to join. But people from ethnic group refuse to come. They thought that it is time- consuming. They would rather save time to go to work and earn money for living. No time to learn.” Transcript of an interview with commune official in Bac Lieu in 2019. Policies targeting the remaining poor population Change farm land use Strengthen land user Provide microfinance towards profitable crops rights Increase level of Improve skills, Education reform towards social protection education level equal opportunity THANK YOU!.
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