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Vietnam’s poverty reduction efforts set model example

Updated on 3/20/2007 at 10:22

The United Nations Development Programme has described Vietnam’s hunger and
poverty reduction achievements as very impressive to compare with other countries’
efforts. Currently, about 18 percent of households are living under the poverty line,
with 340,000 new households escaping poverty annually.

During the past five years of implementing the national programme on hunger and
poverty reduction, as many as 4,354,000 households have gained access to preferential
credits, more than two million poor people have trained to escape poverty, more than
1,000 basic infrastructure projects have been built in 997 poor communes, and more than
11 million poor people have been provided with free medical insurance cards.

In regard to education, 15 million students of poor families and ethnic minority groups
have enjoyed school fee reductions and 2.5 million students have been provided with
textbooks and notebooks.

Under the programme, 432,700 houses of the poor have been built and repaired, and 21
cities and provinces have completed the removal of dilapidated houses.

The programme has brought a facelift to poor and disadvantaged communes. Many
infrastructure projects such as schools, medical stations, small-scaled irrigation networks
and road systems have been built, helping improve the well being of people in poor
communes, particularly those living in mountainous areas.

According to the Ministry of Labour, Invalids and Social Affairs, the average per capita
income of the poorest 20 percent of the population which was estimated at
VND107,000/month in 2001 increased by 8-9 percent in the 2002-2005 period and 1.45
times in 2005. As a result, the number of poor households in Vietnam in 2005 dropped to
22 percent (according to the new criteria).

In 2006 alone, 1,566,000 poor households gained access to preferential credits and
12,000 training courses on the transfer of technology were held. Thanks to these efforts,
the number of poor households was reduced to 18 percent. Accordingly, the north-
western region achieved the highest rate of 37.36 percent, followed by the north-eastern
region (28.33 percent) and former zone No4 (27.51 percent). The United Nations
Development Programmes described these figures as impressive on a world scale.

UN coordinator in Vietnam John Hendra acknowledged Vietnam’s rapid changes, but said
that the biggest challenge for the country in 2007 is to make full use of interests and
minimise risks from the rapid socio-economic development.

Based on the impressive achievements of the programme in the 2001-2005 period, the
Prime Minister approved the second phase of the programme from 2006-2010.

The new phase aims to accelerate the poverty reduction rate, reduce relapses and create
favourable conditions for those who escaped poverty to improve their well-being and
production in poor and disadvantaged communes.

It also aims to narrow the widening gap in living conditions between urban and rural
areas, lowlands and highlands, and groups of rich and poor households.

By 2010, Vietnam strives to reduce the number of poor households to 10-11 percent, and
50 percent of communes along coastal areas and on islands will be pulled out of the
specially disadvantaged commune status.

According to Minister of Labour, Invalids and Social Affairs Nguyen Thi Hang, in the
2006-2010 period, the programme will link poverty reduction to economic growth
through agricultural and rural development programmes, regional economic development
programmes, vocational training and job generation.

Priority will be given to female house owners, poor ethnic households and poor
households of social policy beneficiaries such as the elderly, people with disabilities and
disadvantaged children.

To create breakthroughs in the second phase, the government adopted several new
policies and projects including a legal assistance policy, a project on vocational training
for the poor and a project on intensive investment in basic infrastructure facilities in
disadvantaged communes along coastal areas and on islands.

In addition to the State budget (VND12.47 trillion), localities were requested to spend at
least 1 percent of their annual budget allocations to ensure the success of the second

In this phase, the Government will provide direct assistance to the poor by exempting or
reducing training fees for learners or vocational training centres and granting medical
insurance cards to the poor.

The phase will also continue to receive financial support from international organisations
in Vietnam. UNDP highly valued negotiations between donors and the Vietnamese
Government, during which donors pledged to grant nearly US$300 million to the national
programme on socio-economic development in disadvantaged communes (known as
programme 135).

UNDP coordinator Hendra said such financial support showed the international
community’s acknowledgement of the importance of the programme in Vietnam. He said
it is a typical example of Vietnam’s self-reliance and donor commitments to national

MOLISA Minister Hang expressed her belief that the second phase of the programme
will achieve greater results than expected, given the achievements in 2006, new
opportunities from WTO membership and support from the international community.