More Vietnamese escaping poverty, but regional, ethnic gaps remain

HO CHI MINH CITY, NNA - More people in Vietnam have escaped poverty in recent years thanks to increasing wages amid strong job demand on economic growth.

Yet, much remains to be done to narrow a gap between rural and urban areas, as well as between ethnic minorities and the Kinh people, the majority, and Hoa (Chinese-Vietnamese) people.

According to a recent report by the U.N. Development Program, about 6 million people moved out of poverty in the socialist republic with a population of 94 million in four years through 2016.

The global poverty index adopted by the U.N. organ ranked Vietnam at 31 among 105 countries -- wealthier than Laos, Myanmar, Cambodia, India, the Philippines and Indonesia, but behind China (23rd) and Thailand (eighth) among Asian peers.

A World Bank report shows Vietnam’s poverty rate fell to 9.8 percent in 2016 from 17.2 percent in 2012. The global poverty line for the rate is $3.2 per capita consumption per day, adjusted for purchasing power in 2011.

Notably poverty among ethnic minorities in two years through 2016 declined by 13.2 percentage points, the largest drop for them in the past decade, the report said, though their poverty rate at 44.6 percent was still much higher than 3.1 percent for the Kinh and Hoa groups.

Vietnam has made remarkable achievements in reducing poverty but challenges remain in reducing disparities among regions and ethnic groups, both the UNDP and World Bank said in their reports.

The poverty rate in urban areas declined from 5.4 percent in 2012 to 1.6 percent in 2016 while in rural parts it fell from 22.1 percent to 13.6 percent, the World Bank report shows.

"My family farm corn and rice. Our daily spending is about 50,000 dong ($2.1) for three people," said Ngoc Thuy, a 24-year-old woman of the Hmong minority from the northernmost province of Ha Giang sharing a border with China.

"To earn more money, I needed to move out" of the remote area, she said. The woman earns 5 million dong per month by working at a South Korean textile factory in Binh Duong Province, north of Ho Chi Minh City.

According to the UNDP report released in October, the Hmong, who live in mountainous provinces near borders of China and Laos, are among the poorest ethnic groups in Vietnam.

The Kinh account for nearly 90 percent of the total population and the Hoa are relatively rich Chinese Vietnamese. More than 50 ethnic minorities reside in Vietnam.

"Wage growth was the most important driver of household income growth in both rural and urban areas, and for both ethnic minorities, and the Kinh and Hoa," the World Bank report said.

It said Vietnam pursued "an export-oriented model that successfully generated jobs" and "most households, both poor and non-poor, have a wage income" with rapid growth in wage employment in all sectors including agriculture.

Vietnam’s exports nearly tripled from 2010 to 2017, according to trade data.

Still, the poor are heavily concentrated in rural areas and among ethnic minorities. Of the 9.1 million poor people, 94.7 percent live in rural parts and 72.9 percent are minority groups, the report said.

As a shift from traditional crop cultivation has contributed to poverty reduction in rural areas and among ethnic minorities, the report suggested that farm households grow more profitable crops such as coffee, black pepper or rubber instead of less profitable rice or corn. But their access to finance should be improved at the same time.

Hoang Dia, a 28-year-old Hmong man from the northeastern province of Cao Bang neighboring China, said, "In our area, we survive by eating corn and rice, with limited income by selling leftovers."

"The average earning is about 100,000 dong per day (per family)," he said, adding that people around him have limited access to loans and very small amounts if any.

"Poor people just want to have small amounts of loans, without any value asset as collateral," said Tran Thi Ngoc Ha, head of the International Relations Department of TYM Microfinance Institution under the Vietnam Women’s Union, which supports financial and social services to poor and low-income women.

Beside income growth, one of the fastest growing economies in Southeast Asia has also seen progress in health and education.

In 2017, the average life expectancy at birth stood at 76.5 years, outperforming many of its neighbors.

The country’s average number of years of education received by people by the age of 25 was 8.2 years, higher than the average of East Asia and the Pacific at 7.9 years, according to the UNDP report.

Koji Sako, senior chief researcher at the Mizuho Research Institute of Japan, said he believes that socialist countries are more enthusiastic about educational investment than other countries.

The World Bank report said, "An average of 1.5 million Vietnamese joined the global middle class each year since 2014, confirming that households continue to climb the economic ladder after escaping poverty."

To advance poverty reduction, the World Bank suggests that Vietnam should welcome more foreign direct investment into higher-value agriculture, manufacturing and services while increasing infrastructure investment.

It also calls for education reforms to develop workforce skills and further agriculture structural transformation.

"It takes longer time to train office workers than factory workers," Sako said, adding that it is imperative to leverage manufacturing industries to sustain the trend of a growing middle class. (NNA/Kyodo)

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