(Tiểu luận) topic 8 analyze the situation of poverty and inequality in vietnam since 2010

` MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY GROUP ASSIGNMENT REPORT TOPIC 8: Analyze the situation of poverty and inequality in Vietnam since 2010 Nguyễn Hà Ph°¡ng ID: 11219284 Phan Anh Khôi ID : 11212902 Trần Hải Nam ID : 11219279 Vũ Trọng Mạnh ID : 11213752 Hoàng Anh Quân ID : 11214934 Class: DSEB 63 Guide lecturer: Nguyen Viet Hung Hanoi, 2022 Table of content Cover A Analyze the situation of poverty in Vietnam since 2010: I Poverty status in Vietnam by income threshold: II Poverty status in Vietnam according to the multidimensional poverty line: B The situation of inequality in Vietnam since 2010: I Inequality in wealth distribution among income groups: II Inequality between urban and rural areas: 11 III Gender inequality: 13 C Summary: 13 D Conclusion: 13 D References: 13 2|Page A Analyze the situation of poverty in Vietnam since 2010: I Poverty status in Vietnam by income threshold: Vietnam belongs to the group of low-middle-income countries, with a rapidly increasing per capita income According to the World Bank, in the period from 2010 to 2020, Vietnam's GDP per capita has doubled, from $1673.3, ranked 146th in the world in 2010 to $3526.27 in 2020, ranked 124th in the world the world by 2020 Vietnam's GDP per capita PPP also doubled, from $5327.2 in 2010 to $10904.5 in 2020 Vietnam has made remarkable progress in poverty reduction in the period 20102020, with the poverty rate falling from 16.8% to just 5% Growth over the past decade in Vietnam has been generally inclusive, and closely related to economic growth Out of poverty is uniform across most groups, and many families are lifted out of poverty within a generation 3|Page Source: NCIF According to the World Bank, household consumption has grown by about 5% per year The middle-class population in Vietnam is growing rapidly Looking at the population shift divided into groups alone, it shows that the proportion of the population in the economically safe group and above is increasing, while the proportion of the population in the remaining groups has a lower economic ladder such as extreme poverty, moderate poverty, and economic vulnerability are all in a decreasing trend The positive development of all groups according to the divided economic ladder contributes to reducing the possibility of economic groups falling back to the lower economic ladder The probability of returning to the poor group of the economically secure population in Vietnam in 2016 is very low, only about 0.5% and it is almost impossible for people of the middle class to fall back into the low economic groups than The NCIF believes that this is the result of the relatively high, continuous, and stable economic growth that Vietnam has achieved in recent years Source: WB (2018) 4|Page According to the Residential and Household Living Standards Survey, about 85% of households say their living conditions are better in 2020 than in 2016 On the other hand, the data in the Governance and Administration Performance Index UNDP's Provincial Public Service (PAPI) indicates that 63% of households feel their economic conditions are better in 2018 than they were five years ago However, poverty is still the issue that gets the most attention from the majority of the population Ethnic characteristics, agriculture, and location have long had a stable relationship with the high poverty rate in Vietnam The mountainous, remote, and remote areas, where many poor people are mainly ethnic minorities, are also groups with a much higher percentage of farming than the Kinh majority Those remote areas are located far from economic centers, and partly because of the unfavorable topography, agriculture there is also less productive Among those who are still poor in 2020, the above groups account for a very high proportion: 79% of the poor are ethnic minorities (15% of the population), and 66% are only employed in agriculture (16% of the population) population) The Central Highlands and the Northern Midlands & Mountains region account for 6% and 13% of the country's population, respectively, but are home to 21% and 42% of the poor (World Bank) II Poverty status in Vietnam according to the multidimensional poverty line: Realizing that people's quality of life is related to many aspects other than income and access to international poverty measurement methods, on September 15, 2015, the Prime Minister signed Decision No 1614 approved the master project "Transforming poverty measurement approach from single-dimensional to multidimensional applied for the period 2016 - 2020" Vietnam's poverty line for the period 2016 - 2020 is built in the following direction: using a combination of both income poverty lines and lack of access to basic social services With this step, Vietnam is among the leaders in the Asia-Pacific region in applying multidimensional poverty measures to reduce poverty in all dimensions, including income and non-monetary 5|Page dimensions such as housing, access to clean water and sanitation, educational services, health care, health insurance, and social insurance Accordingly, poverty measurement criteria are built based on: (1) Income criteria, including minimum standard of living in terms of income, poverty line in terms of income, and the average standard of living in terms of income (2) Degree of deficiency in access to basic social services, including access to health, education, housing, clean water and sanitation, and access to information Vietnam has achieved remarkable results in poverty reduction by applying multidimensional poverty lines According to the calculation results of multidimensional poverty 2016-2020 conducted by the General Statistics Office in collaboration with UNDP, the Government's intervention solutions have helped the rate of multi-dimensional poverty households in Vietnam decrease significantly, from 9% in 2016 decreased to 8.4% in 2017; 6.1% in 2018; 5.3% in 2019 and 4.8% in 2020 The rate of multidimensionally poor households in rural areas is 5.6%, much higher than 3.2% in urban areas, but considering the whole period In the period 2016-2020, 6|Page Document continues below Discover more from: Macroeconomics Đại học Kinh tế Quốc… 543 documents Go to course 11 Ôn tậpPremium môn Kinh tế Vĩ mô trường đại học Kinh tế… Macroeconomics 100% (12) Premiumvi mo - de thi Trac nghiem 16 kinh te vi mo Macroeconomics 100% (11) Premiumvi mo chuong Trac nghiem Macroeconomics 100% (6) Premium Chuong 27 Macroeconomics 100% (6) Premium Macroeconomics Lecture 17 Note Macroeconomics 100% (6) Premium Đề thi kinh tế vĩ mô FTU Macroeconomics this gap is gradually decreasing as the rate of multidimensionally poor households in rural areas sharply decreased According to the results of the General Statistics Office, the overall MPI of the country decreased from 0.035 in 2016 to 0.016 in 2020, showing that the multidimensional poverty situation in Vietnam has improved significantly This trend occurs in both urban and rural areas and economic regions According to the analysis, the improvement of multidimensional poverty in the period 2016-2020 is due to the rapid decrease in the poverty rate (the breadth of poverty), while the degree of deprivation (the depth of poverty) has not changed significantly Multidimensional poverty still has a relatively large gap between urban and rural areas, which is clearly shown by the MPI In 2020, the MPI of the rural area is 0.019, which is nearly times higher than that of the urban area, which is only 0.010 Due to difficult socio-economic conditions, the Central Highlands, Midlands, and Northern mountainous regions have high multidimensional poverty with MPI in 2020 of 0.031 and 0.027, respectively The Red River Delta is the region with the lowest multidimensional poverty, with an MPI of 0.001 7|Page 100% (6) According to the calculation results of the General Statistics Office, in the period 2016-2019, the percentage of households lacking basic social services tends to decrease over the years in most of the indicators This shows that Vietnamese households are getting better and better access to basic social services Particularly in 2020, due to the impact of the Covid-19 pandemic, this downward trend no longer continues in some indexes The index with the largest shortage is health insurance, but this is also the index with the fastest decline, from 40.6% in 2016 to 19.5% in 2020 Medical examination and treatment and education Child education is an indicator with a very low degree of deficiency The indicators with the level of deprivation that have not changed significantly over the years are the assets of access to information, medical examination and treatment, children's education, and adult education B The situation of inequality in Vietnam since 2010: I Inequality in wealth distribution among income groups: 8|Page Source: World Bank Inequality fell sharply in the first half and then rose slightly in the second half of the decade The Gini index peaked at the start of the decade, around the same time as the global financial crisis, but then reversed rapidly (Figure O.5) Inequality decreased as households in the lower welfare distribution experienced higher-than-average growth between 2010 and 2014 (Figure O.6) However, in the second half of the decade, consumption by rich households increased more than that of poor households, leading to negative disparities in shared prosperity that increased inequality Over the past decade, as the poorest households have increasingly focused on low-income agricultural activities, these groups are at risk of falling further behind and becoming more disconnected from areas of energy development of the economy (World Bank) According to GSO, in urban areas, the rich-poor divide between the lowest and highest income groups tends to decrease from 7.6 times in 2016 to 7.2 times in 2019 and only 5.3 times in 2020 due to the impact of the Covid-19 epidemic caused the high-income group to decrease while the low-income group still tended to increase Rural areas tend to be opposite to urban areas when the income gap between the two lowest and highest groups increases from 8.4 times in 2016 to 9.6 times in 2019, but in 2020 it will decrease only times due to the overall impact of the Covid-19 epidemic on the entire economy 9|Page Education completion rates vary according to household characteristics, especially ethnicity and economic status (measured by per capita household expenditure by quintile) Personal expenditure on education varies considerably by family background, even across levels of compulsory education in public schools In 2020, households in the richest quintile spend 5.6 times more on private tutoring for children in public primary and lower secondary schools than households in the poorest quintiles (Figure O.12) By the end of 2020, the health insurance coverage rate in Vietnam has reached an impressive 90.85% (Ministry of Health, 2021), contributing to reducing inequality between the rich and poor in health However, the average expenditure on medical examination and treatment and health care per person/month is about 96 thousand VND, accounting for about 5.4% of the total expenditure of the people In particular, for the richest group of households, the average expenditure is 2.8 times higher than that of the poorest group This means that the level of access to higher quality health services of the rich compared to the poor is still much higher (CPC) While the poor receive medical care in the public hospital system, which is often overloaded, those with high 10 | P a g e incomes can pay for services from private clinics and hospitals with much higher service quality II Inequality between urban and rural areas: The poverty rate in rural areas is usually 3-5 times higher than in urban areas In 2010, the poverty rate in urban areas was 4.4% while in rural areas it was 22.1% By the middle of the decade, although the poverty rate tended to decrease in both rural and urban areas, the gap (the number of times of difference) between rural and urban poverty rates increased This gap maintained a downward trend from the mid to late decade Poverty rate by urban and rural areas in the period 2010-2020 Source: World Bank The average income in urban areas in 2014 was nearly million VND/person/month, while in rural areas it was more than million VND/person/month The difference in real income will be many times larger when the population in rural areas is times higher than the population in urban areas In other words, urban areas account for only one-third of the population, but more than 50% of the high-income group This disparity remained until the end of the decade and was only reduced due to the impact of the COVID-19 11 | P a g e pandemic In terms of income, while rural areas still have many characteristics of agricultural production activities (about 50% of rural households surveyed have income from agriculture, this proportion of urban residents currently accounts for only 30%), the proportion of urban residents with income from pensions/subsistence allowances in urban areas is twice as high as in the agricultural sector In terms of spending, although income is twice as low as in urban areas, spending in rural areas tends to be close to that in urban areas This clearly shows many changes in household expenditure in rural areas when there are changes in livelihood For health expenditure, the spending level of people in urban areas is 1.2 times higher than that of people in rural areas, and urban households also spend twice as much as the average expenditure on education compared to households in rural areas In terms of quality of life, the proportion of urban residents living in high-rise apartments accounts for 31.4%, approximately 7% higher than in rural areas The difference in the rate of living on flat roofs between urban and rural areas is also over 15% In addition, thatched houses/bamboo/cots are very rare in urban areas (0.6%) but still, up to 1/10 (10.6%) of surveyed rural households are currently pregnant live in these houses The percentage of households using tap water as a source of drinking water in urban areas reached 92.6% Meanwhile, in rural areas, this rate is only 60.6% (32 points difference) Regarding the location of medical examination and treatment, the popular choice of urban residents is the provincial and city hospitals (accounting for about 44.6% of the choices) Meanwhile, rural people mainly go to district/district hospitals (accounting for 42.6 surveyed households) The results show that urban people have 12 | P a g e more opportunities to access high-level health services III Gender inequality: In Viet Nam, just like in the developing world in general, women continue to form a large majority of the working poor, earn less income, and are more often affected by under- and unemployment and precarious working conditions than men Women in Viet Nam are principally found in lower-paid occupational sectors or vulnerable employment Many women work as unpaid family workers in largely "invisible" areas of informal employment as migrant domestic workers, homeworkers, street vendors, and in the entertainment industry C Summary: The decade 2010-2020 is a period witnessing a strong transformation of the Vietnamese economy Following the achievements of Doi Moi, as well as being dynamic and actively anticipating the trend of globalization in the world economy, Vietnam has maintained a high growth rate as well as achieved impressive achievements in the world economy poverty reduction In addition to significant progress in increasing incomes and living standards for most population groups, inequality remains between the rich and the poor, between urban and rural areas, and between men and women D Conclusion: Vietnam's achievements in poverty reduction are impressive, by any poverty line Growth has resulted in marked improvements in incomes and quality of life across most income groups However, there are no clear signals of a corresponding increase in human capital, posing a major challenge to the goal of sustainable poverty reduction A long agricultural tradition as well as the unequal distribution of networks of technical facilities and social services place many groups of people in economic precariousness and more vulnerable than other groups other In the context that the world economy is recovering from the COVID-19 pandemic as well as the complicated international situation, Vietnam needs to maintain macroeconomic stability, increase social welfare, and take measures to support the economy appropriate job transition support to achieve the goal of sustaining growth, reducing poverty sustainably, and avoiding the middle-income trap D References: 13 | P a g e World Bank, 2022 From the Last Mile to the Next Mile – 2022 Vietnam Poverty & Equity Assessment NCIF, 2021, Tình hình phát triển tầng lớp trung lưu Việt Nam giai đoạn 2011-2020 GSO, 2021, Result of the Vietnam household living standards survey 2020, Nxb Thống kê GSO, 2021 Báo cáo điều tra lao động việc làm năm 2020, Nxb Thống kê Tạp chí Con số kiện, 2021, Kết giảm nghèo đa chiều Việt Nam: Nhìn lại chặng đường Thơng cáo báo chí Nghèo đa chiều VN 2016-2020 GSO, The trend of inequality in income distribution in Vietnam 2016-2020 period: https://www.gso.gov.vn/en/data-and-statistics/2021/06/the-trend-of-inequality-in-incomedistribution-in-vietnam-2016-2020-period/ HĐLLT¯, 2019, Quản lý phát triển xã hội bất bình đẳng, phân tầng xã hội nước ta điều kiện phát triển kinh tế thị trường, xây dựng nhà nước pháp quyền hội nhập quốc tế Ministry of Health, 2021, Hết năm 2020, có 87,96 triệu người tham gia BHYT, bao phủ 90,85% dân số 10 GSO, Bình đẳng giới lao động tiếp cận việc làm quản lý doanh nghiệp 11 Vietnam Briefing, Gender Equality and Prevailing Challenges in the Workplace in Vietnam 14 | P a g e