Libmonster ID: VN-1240
Author(s) of the publication: Pham Quang HUANG
Educational Institution \ Organization: Hanoi Institute of Management and Business

Last year, in 2005, Vietnam celebrated the 60th anniversary of the declaration of national independence. For 30 years out of 60, Vietnam has fought many enemies, defending its independence and State sovereignty. And only the last 30 years have been spent healing the wounds and rebuilding the country. Despite the fact that the history of the Vietnamese was not given very much time for the construction and development of the state, significant results have been achieved. Among the most impressive, according to foreign experts, is the reduction of poverty, which our society has been particularly actively fighting over the past 15 years.

Vietnam's poverty rate (according to World Bank criteria) fell from 70% in 1990 to 29% in 2002, and in 2004 it was 18.1%. Thus, over 14 years, this indicator has decreased by almost 52 points. This is the result of an increase in per capita income and, as a result, an increase in the standard of living of the population.

The Government recently adopted a program to raise the subsistence minimum for the period from 2006 to 2010. According to this document, in 2010 the minimum amount will be 210 thousand VND per person per month for rural areas and 260 thousand VND per person per month for urban areas ($13 and $ 16). accordingly).

Urban and rural poverty rates differ significantly; they are also highly dependent on climatic and geographical conditions. In urban areas, the share of poor people was 10% in 2002 and 8.6% of the total urban population in 2004; in rural areas, it was 26.9% and 21.2%, respectively. The highest level of poverty is observed in the north-western part of Vietnam, and the lowest-in the south-eastern part. Urban poverty rates are falling faster than in rural areas. The fastest decline was observed in Tainguyen Province-from 43.7% in 2002 to 29.25% in 2004, i.e. by 14.45% in two years.


According to authoritative international organizations, Vietnam is one of the countries where the poverty rate is decreasing quite rapidly. In the final documents of the United Nations Development Program to Combat Poverty, it is noted that Vietnam, in a group of countries with similar socio-economic conditions and approximately the same level of GDP, has managed to use its resources more effectively to improve the standard of living, increase education and increase the life expectancy of the population, and achieve gender equality. According to the Human Development Index (HDI), Vietnam ranked 108th in 2005, ahead of such countries as Indonesia, Egypt, South Africa, India, and Pakistan.

The way to reduce the level of poverty in our country is through accelerating the development of the economy and creating additional jobs. Since 1992, Vietnam's GDP has grown at a fairly high rate-from 7 to 9% per year (with the exception of 1998-1999, when the Asian economic crisis caused GDP growth to fall to 5.76% and 4.77%, respectively). In 2002 - 2004, GDP growth was more than 7 percent per year.

In addition, the country's economy has undergone progressive structural changes in recent years. Thus, in the period from 1991 to 2004, the share of "second - tier" industries-agriculture, forestry and water - in GDP decreased from 40.49% to 21.7%, while the share of industry and construction in GDP increased from 23.79% to 40.09%. This allowed for the creation of an additional number of jobs, as a result of which the unemployment rate in urban areas decreased from 67.9% in 1998 to 5.8% in 2004.GDP per capita (taking into account purchasing power parity) has significantly increased. While in 1995 it was $ 1,236, in 2004 it reached $ 2,490 per person.

These successes were facilitated by the introduction of an effective macroeconomic management system. In addition, Vietnam's economy is characterized by low inflation (the lowest-0.6% - was in 2000, and the highest-9.5% - in 2004). The budget deficit and external debt are at an acceptable level and under strict control. For example, in 2004, the budget deficit was 1.6% of GDP, and the average for 2001-2004 was 2.2% of GDP. As of December 1, 2004, the national debt was 34.7% of GDP, including 31.5% of external debt. These figures are much lower than the limit set by the criteria of OECD or EU countries-the deficit is not more than 3%, the debt is not more than 60%.

Another important factor in ensuring high rates of economic development is that Vietnam has managed to gradually create and implement an economic mechanism that is suitable for its specific conditions. The country also managed to successfully implement a set of measures for economic reform, gradually update, supplement and improve the system of legislation, and prepare favorable conditions for all those who have a desire to do business in those sectors and spheres of the economy that are not prohibited by law.

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The economic policy reform has created opportunities for Vietnamese citizens to find a job they like, as well as improve the efficiency of their own work. Changes in agricultural policy have created conditions for millions of people to move from the agricultural sector with its excess labor resources to any other. The self-funded wage system introduced in rural areas in the 1980s, together with price liberalization, now gives the peasant a wide range of opportunities to choose the type of agricultural activity that suits him. Handicraft and handicraft activities also provide an opportunity for those working in this field to increase their personal income.

The system of state-owned enterprises was restructured. Over 15 years - from 1991 to 2005-the number of enterprises with 100% state capital decreased by almost 10 times - from more than 12 thousand to about 1.5 thousand. As part of the restructuring, unprofitable enterprises were liquidated, small firms were merged, a number of state-owned enterprises that are not covered by the state's right to own 100% of the authorized capital were corporatized, and a number of large state-owned enterprises were created as holding companies.


The policy of creating a multi-structured economy has led to the rapid development of individual entrepreneurship. The share of investments in the non-governmental sector in the total volume of capital investments increased from 23.8% in 2000 to 27% in 2004. Currently, in accordance with the Law "On Entrepreneurship", 150 thousand individual enterprises are registered in the country with a total capital of 182 trillion VND, which is approximately 11.5 billion US dollars. In 2004, the share of the private sector in GDP was 38.5%, which is 2.5 times more than the share of enterprises with foreign investment-15.17% - and approximately the same as the share of the public sector-39.22%. In industry, private enterprises have the highest growth rates. In 2004, output in the private sector increased by 22.8% (compared to only 7.5% in 1998), while in the public sector this growth did not exceed 11.4%. Private enterprises accounted for 27% of industrial output.

The development of the private sector of the economy contributed to solving the problem of employment. Between 1991 and 2001, 8 million new jobs were created. Of these, 0.05% - in the public sector, 92.5% - in the non-state sector (7.44 million) and in the sector of enterprises with foreign capital-about 7.5% (590 thousand jobs).

Another important "lever" for reducing poverty is that the Vietnamese state consistently implements a meaningful social policy, increasing investment primarily in those areas that are experiencing difficulties in social development and are characterized by a low standard of living of the population. Along with economic reform, the State implements many programs aimed at combating poverty. This includes reducing unemployment in every possible way; preparing and implementing medical programs specifically for poor people; providing free medical care for children under the age of 6; and paying full fees for those with disabilities.

page 49

those who have signed a health insurance contract. In addition, we need to add special programs for the development of the social sphere for individual provinces, for small nations, and for border areas.

Among the poverty eradication programs, the program of concessional lending to low-income citizens through the Bank for Agriculture and Agrarian Development, as well as through the Bank for the Poor or the Fund for Assistance to the Poor is of particular importance. All these structures have been operating in our country for several years. According to estimates of the Fund for Assistance to the Poor, the total amount of loans allocated by this fund (338 trillion VND) in 2004 was 30.35% more than in 2003. 55884 people are members of the Fund, including 27786 directly working people. It is expected that by the end of 2005, the number of members of the Fund will reach 65 thousand people, and 60% of them will be poor.


One of the ways to combat poverty among national minorities is to encourage them to move from a nomadic lifestyle to a sedentary one. Previously, because of backward farming methods, the life of many small ethnic groups in Vietnam was generally very difficult. Moreover, the number of poor families increased significantly as the grain harvest season approached, when food supplies ran out. Today, many programs have been adopted specifically designed to overcome poverty among small nations. These are programs to settle people in new territories, improve transport services, develop irrigation works, and provide free seeds of various crops,as well as livestock. As a result, the lives of many small peoples improved and they stopped wandering. As an example, Cam Ranh County, where more than 20 trillion VND was spent on all these purposes. In a short period of time, 587 homes for the poor were built here, more than 290 families received 62 thousand seedlings of mango and 114 thousand peach trees, as well as 140 cows and 300 calves.

In some parts of the country, poor families are given a special " poor family certificate "or"certificate for the right to medical care". Holders of such certificates can apply for free medical care in any state health care institution in the country. They also have the right to fully free (or partially paid) education, to receive preferential loans. Such "certificates" are issued to those families where the average income per person does not exceed 150 thousand VND per month for those living in urban areas, 100 thousand VND per month for those living in rural areas, and 80 thousand VND per month for those living in mountainous areas and remote settlements.

Although Vietnam has achieved impressive results in the fight against poverty, it should be noted that a number of serious problems arise in the course of solving this important task. Thus, as many families move out of poverty and even increase their own savings, problems related to social inequality arise and become more acute in society, especially in relation to urban and rural residents. If the average per capita income of a citizen in recent years is 622 thousand VND, then for a peasant this figure does not exceed 275 thousand VND per month. Moreover, the highest level of per capita income in the country is observed in the south-eastern regions of Nambo, and the lowest-in Taibak. The gap between them is 2.5 times.

According to a survey of living standards conducted by the State Statistics Committee of Vietnam in 2002, when comparing 10% of the richest and 10% of the poorest families, the gap reaches 13.9 times, while in 1995 it was 7 times. Currently, this gap has reached 15 times!

Vietnam's industrial and agricultural growth rates are generally quite high and relatively stable in the long run. However, due to the low starting base, the gap in the development of the country's economy in comparison with other Southeast Asian countries is not only not decreasing, but even growing. Vietnam's competitiveness in the region and in the world is very low.

The International Economic Forum (WEF) has been determining the competitiveness rating for Vietnam for almost 10 years. In 1997, Vietnam was ranked 49th out of 53 countries, which is 4 points higher than the lowest ranked country. In 2004. Vietnam was ranked 77th out of 104 countries, 27 points higher than the lowest ranked country. This year, 2005 Vietnam was ranked 81st. It is significant to compare the dynamics of the rating of two countries - Thailand and Vietnam. 2002: Thailand ranked 37th, Vietnam ranked 65th; 2003: Thailand ranked 32nd, Vietnam ranked 60th; finally, 2004: Thailand ranked 34th, and Vietnam ranked 77th. The comparison is clearly not in favor of Vietnam.

While Vietnam's GDP per capita in real (or comparable) prices has been growing significantly in recent years, in the Southeast Asian region, Vietnam is only ahead of Cambodia, Laos, and Myanmar. Per capita GDP of our country ($2,490) It is only 71.2% of Indonesia's per capita GDP, 55% in the Philippines, 32.8% in Thailand, and 9.6% in Singapore. And on average-59.4% of the per capita GDP of the countries of the region.

The changes taking place in the structure of the country's economy are clearly insufficient. It still has an unjustifiably large share of production, while the share of services is constantly decreasing (from 44% in 1995 to 38.15% in 2004). Moreover, in the production sector, most of the output is traditional products manufactured using backward, primitive technology. Mainly products and goods that have not undergone deep processing are exported. Vietnam produces and sells a lot of oil to other countries, but only crude oil is exported. The same can be said for textile products.

The uncontrolled increase in the birth rate in our country that has been observed in recent years may negatively affect the timing of achieving victory in the fight against poverty. It has been observed since 2002 and can lead to an aggravation of many old problems in such areas as employment, education, medicine, and the rule of law.

Thus, the Vietnamese society is still far from the final victory in the fight against poverty. But the progress is evident, and this inspires confidence that this acute problem will eventually be solved.



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