Poverty in Vietnam

Urban Poverty in Vietnam

Vietnam remains classified as a “low income” country where poverty limits opportunities for 12 million people and a further 10 million hover just above the poverty line. The government’s poverty line for the 2006-2010 period is an average monthly income of less than VND200,000 (US$11.10) per person in rural areas and below VND260,000 ($14.40) per person in urban areas.

Why are they poor?

Vietnam’s economy is based on the production of staple foods. However, it has poor agriculture. Example, the mainstay of Vietnam's economy is rice production; Vietnam is the second largest exporter of rice worldwide. Other agricultural products such as coffee and rubber are important exports.

In addition, about 13% of the population and who predominantly live in the remote upland and highland regions. Cut off from the country’s prosperity by underdeveloped infrastructure and dependent on low yielding agriculture and forest products, more than 60% of these groups were assessed as below the poverty line in the 2004 survey. Furthermore, with natural disasters and climate change, Vietnam is further devastated. Vietnam is one of the most disaster-prone countries in the world; about 70 per cent of its population is at risk of typhoons and torrential storms followed by flooding. Since most Vietnamese farm for a living and with economic downturn, their income will be affected as well.

Meanwhile, local management of urban poverty is facing big challenges in terms of human resources, budget and working facilities. Global and domestic macro-economic instability dominated in 2008. In the first half of the year, instability was driven by an over-heated property market, currency fluctuations and rises in commodity and fuel prices. In the second half of the year, the global recession hit Vietnam’s exports and foreign direct investment hard. In January 2009 Vietnam’s international trade contracted by 24.1 per cent.

There is also lack of education in Vietnam. Most people cannot attend school and thus not sharing a hand in social services, health care, and social welfare. There is lack of basic human rights. Hence, poverty does not only mean financially poor but also 'bad morality' in living. Vietnam has no balance in development. It just focuses on economic development, but do not address social and human development. This results in social issues such as poverty, HIV/AIDS, drug addiction, prostitution, crimes etc.

Saroj Dash of ActionAid Vietnam, an international nongovernmental organization, also urged policy makers to develop an accurate understanding of urban poverty. “Urban poverty alleviation cannot be conducted effectively without a thorough understanding of the scale and role of the migrants,” he said.

“Urban management policies often create constraints on the livelihoods of poor people. For instance, policies to ban or restrict street hawking and self-made vehicles in inner-city areas will make difficulties for the poor in earning their living from these jobs,” Dash said.

He said increasing vulnerabilities such as financial and food crisis, unstable conditions of employment and migration are the main symptoms of the rising trend of urban poverty rate.

What should be done?

To effectively address urban poverty, there is a need to thoroughly understand the scale and role of migration, design support programs for specially disadvantaged groups to increase their access to social services and secure safety nets, and give careful consideration to the livelihoods of poor people when developing urban management policies. The Ministry of Labour, Invalids and Social Affairs has said it is building a draft social welfare strategy that expands the welfare umbrella to include more people.

Summary

WHY ARE THEY POOR?

1. The incomes of many people living at subsistence or just above subsistence level have not kept pace with inflation; in fact they have had to work even harder to earn the same amount while getting less of the essential goods they need.

2. The increasing gap between the rich and the poor, a constant feature over the last two decades, has also been a factor in increasing urban poverty. As more people in rural areas lose their land and other sources of income, they are forced to hire their labour out in urban areas.

3. Policies that are ostensibly aimed at growth and poverty alleviation at the same time often achieve the former at the cost of making more families vulnerable.

4. Studies have found rising landlessness and indebtedness in rural areas as key poverty causing factors, but major land policy initiatives like the one that promotes large-scale farming in the interests of agricultural efficiency only exacerbate the problem, said one researcher who declined to be named.