In addition, over and above their immediate implications for patterns and levels of employment, a number of policy changes—such as the shift from collective to family- based farming, the[r]
(1)Chapter 1: The Development Agenda 1.1 National development strategy
In little more than a decade, Viet Nam has undergone dramatic economic and social transformation The main agent of change has been the Communist Party’s adoption in 1986 of doi moi—a policy for comprehensive renovation of Viet Nam’s society and economy based on three fundamentals:
1) the shift from a centrally planned to a market-oriented economy with State management;
2) the “democratisation of social life”, with the aim of developing the rule of law in a State of the people, by the people and for the people; and
3) the implementation of an open door policy and the promotion of co-operation and relations for peace, independence and development with all countries
These key principles have guided and influenced the Government’s national priorities and development goals for more than a decade
The Government’s long-term objectives centre around the goal of modernisation and industrialisation of the country The Government’s development strategy is significantly broader, however, and rests on four specific pillars:
• sustainable economic growth, as the force for deepening macroeconomic reforms, overcoming poverty and fostering industrialisation;
• stability, political, social and economic;
• equity, ensuring a decent minimum standard of living and equal opportunities for all;
• people-centred development, a cross-cutting imperative to create a development process that is implemented by the people, for the people
The Government perceives these four pillars as constituting the basic enabling environment for the implementation of specific development initiatives In this context, an even balance between the four pillars is essential to achieving a sustainable development process
With these broad development objectives as the foundation, the Government formulates national Five-Year Plans The current Five-Year Plan will run to end-2000, and preparations are now under way to formulate the next Five-Year Plan (2001-05) In addition to these medium-term strategies, each year the Government issues a set of specific national priorities for the coming year The priorities set for 1999 closely reflect those of the current Five-Year Plan and read as follows (SRV 1999b):
• maintain socio-economic stability
• concentrate development in advantaged sectors and products • increase the effectiveness and competitiveness of the economy • create the basis for the future development of the country
In pursuit of these objectives, the following eight tasks were prescribed at end-1998:
1) Develop agriculture and the rural economy—considered the basis for stable socio-economic development—through increasing investment and the development of rural infrastructure Rural industrialisation and the development of agricultural services to be given priority Sectors that respond to domestic demand and have export potential to be supported and expanded
(2)3) Mobilise private and foreign investments and make more effective use of both to support production, and improve the effectiveness of State investment
4) Improve State finances, through increasing savings, implementing a revised tax system and modernising the banking system and capital market, with the perspective to establish a stock market
5) Intensify reforms of the State economic sector, through the equitisation of small and medium State-owned enterprises (SOEs), the better management of large SOEs and the strong encouragement of household and farm economy, co-operatives, private companies and foreign investors
6) Address economic and social problems, through the promotion of vocational training programmes, job creation, the implementation of poverty alleviation, education, health and cultural programmes, and a crackdown on social evils
7) Reform public administration, through enhancing the quality and efficiency of governance and simplifying administrative procedures
8) Maintain political stability
Having set Viet Nam on the path towards a more open economy, the rule of law and the pursuit of equitable development, the Government is likely to retain most of its current priorities and development orientation when formulating its next five-year and longer-term development plans
1.2 Some key quantitative targets
A number of key quantitative targets were agreed upon at the last Party Congress in 1996 These targets underpinned the Government’s longer term strategic vision and formed the basis for the ongoing five-year socio-economic plan covering 1996-2000 Real income was to grow eight- to ten-fold by 2020 relative to 1990, implying an average growth rate of real GDP in the order of 7% to 8% per annum over the 30-year period Poverty, as measured by Government criteria, was to be reduced from somewhere in the order of 20% in 1996 to 10% by the year 2000, and eliminated by 2010 Hunger, which plagued some 5% of the population in 1996 according to Government measures, was to be eliminated by 2000
The main vehicle for this planned economic and social progress was to be “modernisation and industrialisation” Since mid-1997, greater Government emphasis has been placed on agricultural and rural development, following concerns that rural areas may not be benefiting sufficiently from the development process The outbreak of the regional crisis in the latter half of 1997 resulted in a revision downward of the short-term GDP growth targets to somewhere in the order of 5% to 6% per annum during the 1998-2000 period, more in line with actual growth performance according to official data Many of these targets will be reviewed in the ongoing preparation process for the new ten-year socio-economic development strategy covering the period 2001-2010, and the related five-year plans, in the run-up to the next Party Congress in mid-2001
1.3 Follow-up to World Conferences
In addition to the Government’s own national development targets outlined above, Viet Nam has committed to a range of specific development goals in the fields of child development, environment, population, social development, education, women and food security at the world conferences sponsored by the United Nations over the past decade (see box)
(3)Major world conferences of the 1990s • 1990 World Summit for Children (New York)
• 1990 World Conference on Education For All (Jomtien, Thailand)
• 1992 United Nations Conference on Environment and Development (Rio de Janeiro) • 1994 International Conference on Population and Development (Cairo)
• 1995 Fourth World Conference on Women (Beijing) • 1995 World Summit for Social Development (Copenhagen) • 1996 World Food Summit (Rome)
Viet Nam has been an active partner in all of these conferences and it has taken many positive steps towards fulfilment of its commitments In fact, Viet Nam’s Government has been one of the most vigilant worldwide in drawing up national plans of action to follow up on these conferences and other international conventions For example, recommendations drawn up at the World Summit for Children have been translated into a National Programme of Action for Children (1991-2000), as well as local plans of action for children Viet Nam was also the first country in Asia to ratify the Convention on the Rights of the Child Viet Nam’s follow-up to the Fourth World Conference on Women is unique; it is the only country known to have developed a National Plan of Action for the Advancement of Women as well as plans of action for every ministry and province Viet Nam is also set to meet most of the education targets contained in its National Plan of Action, which was devised following the World Conference on Education for All In terms of social development, the Government’s current Five-Year Plan (1996-2000) closely reflects the pledges made at the World Summit for Social Development, which are further operationalised through the Government’s two national poverty alleviation programmes Viet Nam developed its own National Plan for Environment and Sustainable Development for 1991-2000, which is compatible with Agenda 21 that came out of the Conference on Environment and Development Significant progress has been made in integrating environmental issues into the Government’s agenda The national plan led to the adoption in 1993 of a National Law on Environmental Protection and the establishment of a National Environmental Agency in the same year
The Government has named food security as a top priority, and has followed up on the World Food Summit by establishing a national fund for food security as well as a National Committee for Food Security which is currently drawing up a National Programme for Food Security to 2010 Other follow-up activities include a National Programme on Integrated Pest Management, the Five Million Hectare Reforestation programme and the establishment of a Disaster Management Unit
The issues and goals arising from the 1994 International Conference on Population and Development were divided into 12 different categories The Vietnamese Government has devised several specific plans of action to address these issues, among them a Programme of Action for the Youth Union and a National Plan of Action to prevent HIV/AIDS In 1999, in recognition of its success in implementing these various plans of action, Viet Nam was awarded the United Nations Population Award (Refer to Annex I for a more detailed description of Government follow-up to commitments made at each of the World Conferences.)
(4)such as environmental preservation and gender equality—will necessarily take some time, but should nevertheless remain Government priorities
1.4 Public expenditure for development
State spending has been increasing slightly as a proportion of GDP throughout the 1990s, up from around 20% of GDP in 1990 to 23% in 1999 Due to an improving taxation system, State revenues have been growing over the same period at a faster pace than expenditure, leading to a steady reduction in the budget deficit
Spending on social services
Historically, social services have been highly valued in Viet Nam and social expenditure has therefore always represented a large share of Government spending The fruits of this policy are evident from the impressive social achievements of a country with such a low level of national income
State spending on education increased steadily between 1990 and 1997 (the last year for which spending figures are available), up from 12% to 15% of total State spending Over the same period, spending on education as a percentage of GDP more than doubled Basic education programmes, consisting of pre-primary, primary and adult literacy programmes, have consistently received the highest proportion of State spending on education (over 40% of the total throughout the 1990s), in line with the national goal of achieving universal literacy by 2000 Between 1990 and 1997 State spending on health remained fairly constant, and accounted for 5.6% of total State spending and around 1.3% of GDP in 1997 The relatively low share of State spending on health in part reflects the rapid development of the private health services market since the late 1980s During the 1990s the Government has adjusted the distribution of its health spending, increasing the share of spending going to basic health services to 40% of total public health spending by 1997
The third component of social spending is social security and safety nets Between 1990 and 1997 the State devoted between 12% and 14% of its total spending to social security and safety nets, accounting for 3.2% of GDP in 1997 The largest share of expenditure is devoted to national priority target groups, the poor and the war affected (UNDP 1999)
The 1999 budget
In mid-1999 the Government made the State budget public for the first time—a reflection of the Government’s move towards increased transparency and information sharing The budget provides a broad guide to expenditure provisions for 1999
The budget is divided into three expenditure groups Recurrent expenditure makes up more than half of the total Education and training is projected to account for the biggest slice of recurrent expenditure at 12.4% of total State expenditure
The second largest budget allocation goes to investment in development projects As part of the 1996-2000 Public Investment Programme the Government has committed to substantially increase its investment in favour of agriculture and rural development, with priority given to the improvement of rural infrastructure In 1998 the second largest share of Government investment was devoted to irrigation, agriculture, forestry and fisheries The largest share of Government investment went to transport and communication projects, with development of the rural transport system a priority
(5)of 15.7%, according to the poverty line used by the Ministry of Labour, Invalids and Social Affairs (see Chapter 3, sections and 2) The programme initially focuses on remote and mountainous areas and directs investments to infrastructure, resettlement support, education, health, technology transfer and credit assistance
Spending on basic social services
In 1997 Viet Nam committed to follow the “20/20 Initiative” adopted during the World Summit for Social Development The initiative proposes that, on average, 20% of Government budgetary expenditure and 20% of official development assistance (ODA) should be allocated to basic social services According to the UN definition, basic social services refer to basic education, primary health care and nutrition, family planning services and low-cost water and sanitation Viet Nam has added other social services to its definition of basic social services, to also include welfare for the poor, cash transfers for specially targeted groups, and services for disadvantaged groups Based on the international definition, in 1997 Viet Nam allocated 8.5% of its State budget to basic social services, up from 6.1% in 1990 Following the national definition this share rose from 12.7% in 1990 to 17.2% in 1997 Projected figures for 1998 are similar The 20% target has not yet been reached, but the increase in basic social services spending between 1990 and 1997 is a sign of the Government’s commitment to respond to the 20/20 Initiative’s ambitious target (SRV 1998a) In contrast, it is worth emphasising that, according to the international definition, in 1997 only up to 10% of ODA for Viet Nam went to basic social services—down sharply from 18.6% in 1993—underlining how far short of its 20/20 commitment the international donor community is falling (UNDP 1999)
1.5 Key issues
Reliable and useful baseline data, analysis and research
Useful and reliable data and information is essential for accurately assessing current situations, and as a basis for strategic direction, planning and reform The recent population census, the second Viet Nam Living Standards Survey (VLSS II), recent and planned audits of banks and SOEs, and other such exercises are all contributing to essential baseline information for strategic planning
While the quality and reliability of information in Viet Nam continues to improve, still underdeveloped surveying, accounting and auditing practices result in gaps and uncertainty about the reliability of data in some key areas such as: the financial health of domestic banks and their State-owned enterprise clients; the amounts, composition and maturity structure of foreign debt; the allocation and efficiency of public expenditures; trade and financial flows in the foreign balance-of-payments accounts; quantity and quality of valued-added reported in GDP accounts; and others
Participation
The strategic planning process in Viet Nam remains largely an internal State exercise Broadening participation, particularly by allowing for effective participation of the private sector, would considerably enrich the strategies and related plans, and create more generalised support for follow-up implementation
Financial sustainability
(6)Inadequate analysis has been given to the quality of the proposed investments, much of which is directed at State-owned enterprises according to the five-year Public Investment Programme (PIP) covering 1996-2000 While some attention has been paid to planning for Government counterpart funding for the rapidly growing number of ODA projects, little attention has yet been given to the future sources of financing needed to sustain the operations and maintenance costs of related infrastructure, related future debt servicing, and other such recurrent costs Hard currency foreign debt alone has already reached significant levels, approaching 50% of GDP, and the domestic savings rate remains low at around 17-18% of GDP In short, a strategy is urgently needed on the financing of development in Viet Nam, and ensuring a much safer balance between domestic savings and foreign debt
Fundamental reforms
Past development strategies and plans in Viet Nam have not explicitly built in a schedule of some of the broad fundamental reforms needed to ensure the sustainability of the development process Partly as a result, the pace of debt financing in a wide variety of development projects has run far ahead of the pace of fundamental reforms of the overall investment environment in recent years As a consequence, for example, substantial investment has gone into inward-looking, capital-intensive and protected import substitution industries that risk not being able to generate a sufficient future rate of return for the country to meet the related financial obligations and avoid serious setbacks This is true of many investments in recent years in State-owned enterprises, but also many foreign direct investments These highly risky investments in turn also have implications for the country’s future financial capacity to sustain many of the debt-financed public infrastructure investments
Explicitly outlining at least a broad schedule of some of the fundamental reforms, would better enable the Government to ensure a more rational balance between the pace of debt financing and the pace of reform of the overall investment environment, better enable all development partners to prepare for the needed changes, minimise related risks and capitalise on the new opportunities, and better ensure the sustainability of Viet Nam’s development process
Decentralisation
Further decentralisation of development planning and finance in selected areas such as rural infrastructure and poverty reduction would be facilitated by increased human resource and institutional capacity development at the provincial and sub-provincial levels in such areas as financial planning and management, information systems, accounting and auditing, and others
The Public Investment Programme (PIP)
The Public Investment Programme covering 1996-2000 was initially planned at US$15.6 billion for the five-year period, including US$7.5 billion from ODA The programme document clearly states on page one that that the two main objectives of the programme are first, “to develop social and economic infrastructure…” and secondly, “to develop State-owned enterprises…in some key sectors where others are unwilling or unable to make investments” The financial breakdown in the PIP document does not clearly specify how much of the related planned funding has been earmarked for State-owned enterprises in commercial areas such as cement, steel, fertilisers, sugar and oil refining, as compared with State-owned enterprises that produce traditional public goods and services Nevertheless, in light of the now well-known financial risks of investing too much development finance in SOEs in commercial sectors, particularly when financial accounting and auditing practices are still very weak, the public investment programme should be carefully reviewed to further improve the allocations of Government and ODA investment expenditures with the aim of minimising the related investment risks and ensuring the sustainability of Viet Nam’s development process
1.6 Recommendations for action
(7)Further develop surveying, accounting and auditing systems to international standards
Better integrate research on international and regional development experiences, and lessons learned from the successes and failures of other countries, into development strategies and plans in order to increase the likelihood of success and minimise the risks of failure
Widen participation in the strategic planning and reform process, especially to include effective representation of the private business sector, which will need to develop to generate the employment, income, taxes and savings to underwrite and sustain the development process
Prepare an effective and safe strategy on the financing of development including a careful analysis of the amounts, sources and types of financing needed for development under different scenarios in order to preserve sustainability, stability and sovereignty
Build in the reforms and incentives needed to generate high domestic savings in order to maximise reliance on domestic savings to finance the development strategy and minimise reliance on foreign debt in order to avoid excessive debt and aid dependency that has trapped so many developing countries in poverty Review the planned allocations in the public investment programme, particularly amounts earmarked for SOEs in commercial areas, with the aim of increasing the effectiveness of planned investments and minimising the related risks
Further develop the system of public expenditure reviews as a basis for further improving the allocation and efficiency of public expenditures
(8)Chapter 2: Modernisation and Industrialisation 2.1 The transition process
After the reunification of North and South Viet Nam in 1975, the country faced two major challenges: recovering from war and economic reunification In the years that followed, the central planning model, which already applied in the North, was extended to the whole economy, with the advice and support of the former Soviet Union and other countries of the former Council for Mutual Economic Assistance (CMEA)
By the mid-1980s, the weaknesses of the central planning model had become apparent The country entered a period of socio-economic crisis and the situation was exacerbated by the drying up of aid from the former CMEA In response to the crisis, in 1986 the Sixth National Congress of the Communist Party set Viet Nam on a path of renovation, or doi moi, aimed at reforming the centrally planned economy and decentralising Government
Economically, the two major thrusts of the reform process were: 1) to introduce a considerable degree of market liberalisation; and
2) to implement an open-door policy for trade, foreign direct investment (FDI) and official development assistance (ODA)
Thirteen years on from the advent of doi moi, the stimulation of the economy catalysed by the country’s market-oriented reforms has enabled Viet Nam to weather the shock following the withdrawal the CMEA’s support and helped to transform a serious economic crisis in the 1980s into rapid economic growth in the 1990s For Viet Nam’s population, the modernisation and resultant growth and industrialisation of the economy has resulted in an overall improvement in welfare Most notably, poverty has been reduced from an estimated 70% in the mid-1980s, to 58% in 1993 and around 37% in 1998, as measured using the World Bank’s internationally comparable poverty line Nevertheless, Viet Nam remains one of the poorest countries in the world, with a 1998 average GDP per capita of just US$352 The disparity between urban and rural welfare is widening and mountainous and isolated regions inhabited by ethnic minorities have only benefited marginally from the development process 2.2 Macroeconomic policies and performance
The macroeconomic reform drive to facilitate the doi moi open-door policy to develop a “socialist-oriented market economy under State management” gained momentum from 1989 At the external level, the key reforms initiated since then include a considerable liberalisation of external trade, devaluation and unification of exchange rates and a new law encouraging FDI
Domestically, the agricultural sector has undergone a major shift from collective to family-based farming Key financial and fiscal reforms include the liberalisation of most prices, the development of a two-tier banking system, the implementation of positive interest rates to encourage domestic savings, the rationalisation of State-owned enterprises (SOEs), and the reduction of State subsidies and the State budget deficit In the legal field, important gaps have been filled, for example by the introduction of a land law, a labour code, a domestic investment law, and by the creation of a modern tax system
Economic growth has been high throughout most of the 1990s with real GDP per capita growth averaging more than 6% annually over the decade At the same time, the budget deficit and the inflation rate have been moderated to tolerable levels Growth has been strongly supported by booming investment, expanding external trade and sizeable inflows of FDI and ODA Agricultural production has been transformed, and Viet Nam has graduated from being a rice importer to the world’s second largest rice exporter Reforms, and the accompanying growth, have generated employment, higher incomes and a better quality of life for most people
(9)foundation for the new economic system and to facilitate the growth of the private sector The Government continues to develop its strategy for Viet Nam’s transition to a more market-oriented economy
Moreover, concern about the sustainability of the country’s economic growth was triggered following faltering FDI inflows from 1996 These concerns were escalated in the wake of Asia’s economic crisis Viet Nam largely avoided the direct impact of the crisis—protected by its lack of dependence on liquid foreign capital, the non-convertibility of the dong and regulations on trade and foreign investment But the indirect effects of the crisis have been felt keenly enough Lower investment, reduced demand for Vietnamese export products and a loss of competitiveness vis-à-vis its Asian rivals have combined with some hesitation regarding the direction and pace of the reform process to significantly slow Viet Nam’s economic growth (Figure 1)
Figure 1: FDI and growth of exports and GDP
Source: General Statistical Office
Continued internal structural weaknesses, which had been masked by the high growth rates of recent years, are likely to be increasingly exposed as growth slows Together with reduced availability of “easy money” from foreign lenders and investors after the regional crisis, these seemingly negative trends could engender long-term benefits They highlight both the need to invest scarce resources more carefully and the need for further reform in order to ensure sustainable economic growth and insure the gains already made in human development In particular, slower growth further highlights the need for reform of the banking and finance sector This is essential to avoid a dangerous build-up of non-performing loans, improve capital allocation, support the development of the private sector, and enable a further, gradual opening to international financial flows Reliable audits of both SOEs and domestic banks are essential to objectively assess the quality of existing investments and related loans, and to determine capital adequacy and provisioning for bad loans (UNDP 1998)
Public finance reform is also needed to ensure that the tax system does not undermine the incentive environment for enterprise development and investment, whilst ensuring that taxation provides sufficient State revenue 2.3 Globalisation and integration
Currently, considerable attention is being focused on Viet Nam’s efforts to further integrate into the world economy through participation in bilateral, regional and multilateral trade agreements Already a member of the Association of South-East Asian Nations (ASEAN) since 1995, and of the Asia Pacific Co-operation (APEC) forum since 1998, Viet Nam is now in the process of finalising a bilateral trade agreement with the US and making preparations for accession to the World Trade Organisation (WTO) The negotiation and signing of
0 10 15 20 25 30 35 40
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%
-500 1,000 1,500 2,000 2,500 3,000
US$ m
(10)these latter two agreements would be a continuation of the extensive, unilateral trade and investment reforms that Viet Nam has carried out over the past decade
Trade law and the documents guiding the implementation of this law have significantly contributed to the liberalisation of trade Among the steps that have been taken are a reduction of non-tariff barriers, elimination of the case-by-case import/export licence regime, expansion of the rights of enterprises to import and export, and the application of a united custom tariff code system
These reforms have led to rapid growth in Viet Nam’s trade The ratio of exports to GDP rose from 29.4% in 1990 to 33.8%in 1998—an indication of Viet Nam’s increasingly open economy Over the same period, the value of imports as a share of GDP rose from 33.7% to 41.5% (Figure 2)
Figure 2: Trade/GDP, 1990-1998
Source: General Statistical Office
Although the reforms have been far-reaching, trade and investment policies still lack sufficient transparency and continue to provide significant protection to certain sectors Whilst some protection is considered necessary to enable infant industries to develop and to allow time to improve the competitiveness of Vietnamese enterprises, it is clear that current and prospective memberships of multilateral, regional and bilateral agreements will require accelerated and deepened trade and investment liberalisation Viet Nam will need to eliminate trade management mechanisms that are not congruent with trade agreements it has signed Most pressing, Viet Nam’s obligations as a member of the ASEAN Free Trade Area (AFTA) will have to be met by 2006
Important steps towards accelerated reform will be the formulation of a clear international economic integration strategy and the publicising and understanding of the potential benefits and impacts of the proposed policy changes needed to prepare the economy for further integration Without this there is a risk of delay and lack of support for the process of integration And without a clear strategy for further economic reforms, there is a risk that the scope and orientation of policy changes may not serve to maximise the benefits obtainable from economic integration
Lessons learned from the experience of other countries in the region indicate that integration can bring not only the direct benefits of increased trade, but also improved access to trade finance, long-term foreign equity investment, technology and information transfer, as well as knowledge and skills (UNDP 1998) However, not every country has benefited equally and integration also introduces new risks With a clear strategy, decision-makers can better determine the pace and sequencing of change, and assess the impact of specific initiatives against a clear set of domestic priorities and objectives
Trade and industry policy reform will be a central part of the Government’s overall development and international integration strategy More open trade policies will be important to increase competition and ensure more efficient
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(11)allocation of resources This, together with the disciplining of enterprise investment and production decisions, which more competition can encourage, is necessary if Viet Nam is to maximise its benefits from integration The recent economic crisis in Asia has highlighted some of the risks associated with fast growth and poorly managed economic opening In particular, it demonstrated the importance of careful debt management based on reliable information, monitoring and auditing in order to mitigate the risk of over-investment in financially unsound ventures and to limit the scope for corruption This experience offers some lessons for Viet Nam In the past, SOEs’ preferential access to lending from State-owned banks and State guarantees has secured them well over half the available formal credit, despite estimates that 60% of SOEs were loss-making or only marginally profitable in 1997 (IMF 1999)
Other lessons on debt management arising from the crisis include the importance to both the State and enterprises of managing their debt maturity profiles to avoid a liquidity crisis, diversifying their sources of finance—in particular to avoid over-reliance on more mobile foreign funds—and to avoid the temptation of over-borrowing from supply-driven lenders Viet Nam’s foreign debt levels are already significant and there is a need to move toward greater utilisation of domestic savings, long-term foreign equity and other non-debt sources
2.4 Industrial development and competitiveness
Viet Nam remains a predominantly agrarian economy, but the role of industry has been at the core of the country’s economic planning efforts dating back to the First Five-Year Plan (1961-66) The Eighth Five-Year Plan (1996-2000) heralded “modernisation and industrialisation” as the backbone of Viet Nam’s efforts to advance socio-economic development and improve the welfare of the Vietnamese people
Industry now accounts for around one-third of the economy, up from 22.4% in 1990 (Figure 3) From a small base, the industrial sector has consistently registered annual growth in excess of 10% since 1991
Figure 3: GDP by sector, 1990-1998
Source: General Statistical Office
Nevertheless, major reforms are still needed if industry is to weather this period of slower economic growth and prepare itself for exposure to greater international competition in the future The Government’s role needs to shift from directing industrial development to promoting an enabling environment that will foster industrial competitiveness
Currently, Viet Nam’s industrial exports primarily comprise low value-added raw materials and semi-processed goods, which are relatively vulnerable to price fluctuations Processing industries generally lack competitiveness on the international market due to relatively small production quantities, low quality products, poor management and high production costs Exceptions include the garment, leather and footwear industries
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(12)Industry is still dominated by SOEs Fully State-owned enterprises accounted for an estimated 45% of output in 1998 SOEs are also joint-venture partners in about 70% of foreign-invested enterprises (FIEs), which produced 32% of industrial output in the same year (Figure 4)
Source: General Statistical Office
SOE performance clearly varies, but with a significant proportion of SOEs estimated to be loss-making, it is evident that the sector as a whole is in need of urgent restructuring in order to ease the pressure on State finances, improve Viet Nam’s productive capacity and competitiveness, and better ensure the financial sustainability of Viet Nam’s development process To this end, some SOEs have been merged or dissolved Others are being equitised or are linking up with foreign companies to form joint ventures
Joint ventures with foreign partners can potentially provide SOEs with much needed access to capital, better technology and know-how, management and marketing skills, and valuable distribution channels In the successful cases, this creates higher efficiency and products of better quality that are more competitive, both domestically and abroad Lessons from other countries suggest that technology transfer from foreign joint-venture partners can be encouraged by training the domestic labour force in order to increase an enterprise’s ability to absorb more advanced technologies, and by the creation of a policy environment which helps to ensure that foreign affiliates operate in a competitive environment that encourages foreign firms to introduce competitive practices and technology (UNIDO 1999b)
Equitisation as a measure to restructure SOEs had a slow start, but the efforts have gained new momentum after a cautious period of testing the potential costs and benefits of equitisation A significant step forward was the issuance of Decree 44 in mid-1998 to speed up enterprise restructuring Whilst only 17 SOEs were equitised between 1992 and 1997, the number had increased to around 280 by October 1999 Government plans are to equitise up to 1,400 of Viet Nam’s roughly 6,000 SOEs over the next two years The renewed impetus has largely derived from positive experiences with early equitisations in terms of higher efficiency and increased revenues (and tax payments) In many cases management has become more responsive, and equitised firms in which employees have become shareholders have generally benefited from an improvement in the work ethic The mobilisation of additional capital has also made it possible to renew technology and thereby increase competitiveness (Duc 1999)
However, despite these early successes, so far equitisation has focused primarily on smaller loss-making enterprises The prospects for further speeding up the reform process and equitising larger SOEs will remain limited due to the resistance of certain interest groups, the difficulties of valuation of SOEs and their generally high levels of debt Inadequate funds for compensation of retrenched labour, limitations on the ownership share of individual companies, the absence of a stock market and a general lack of familiarity with portfolio investment are further complicating factors
Figure 4: Industrial output by ownership, 1998
SOEs 45%
Collective 1% Private
2% M ixed
6% Households
14% Foreign- invested sector
(13)In parallel with the ongoing restructuring of SOEs, the last decade has seen a cautious encouragement of private industry (see also Chapter 4, section 2) Since the introduction of the Law on Private Companies in 1991, the number of registered private enterprises has grown rapidly Including both individually owned companies and limited liability and joint-stock companies (the “private” and “mixed” categories in Figure 4), the number has grown from 6,808 enterprises in 1993 to an estimated 26,021 in 1998 (MPDF 1999) The rapid growth of the registered private sector has taken place in spite of complex business establishment procedures and the resultant flourishing of the informal business sector Simpler business registration procedures and the introduction of a stronger, more unified, legal framework since the adoption of the Enterprise Law in June 1999 is therefore expected to further boost the growth of registered enterprises, and hence strengthen the formal business sector New policy measures have also been introduced to promote small and medium-sized enterprises (SMEs) as part of Viet Nam’s industrialisation effort SMEs—defined as having less than 200 employees and registered capital of less than VND5 billion—have been targeted as vehicles of development as these enterprises are often based on technology that does not require large up-front investment Two of the related benefits of SMEs are that they tend to take less time to recover their capital outlay and that they create a large number of jobs per unit of capital Whilst the Government has made significant contributions to SME development, further reforms are still needed, for example to ensure simpler and fairer taxation, enable better access to international markets, credit and technology, and to simplify company establishment procedures through implementation of the Enterprise Law (UNIDO & DSI 1999a)
After some years of experimentation with Export Processing Zones (EPZs), the Industrial Zone (IZ) programme was launched in 1994 By mid-1999 a total of 732 licences had been issued to enterprises to operate in 66 zones Of these, 510 were FIEs with total registered capital of US$5.8 billion Industrial output from the zones in the first half of 1999 accounted for 20% of total industrial output Much remains to be done to improve the performance of the zones and make best use of the IZ programme as a vehicle of industrialisation By mid-1999, as many as 20 zones still lay empty and occupancy in many of the other zones was low (UNIDO 1999) This is due in part to zone-specific issues, but it is also clear that investors seek predictable environments in which to business, making the introduction of standard operating procedures for all zones an urgent priority
The imperatives of employment generation (see Chapter 6, section 2) and more regionally balanced economic development have led the Government to emphasise rural industrialisation (see Chapter 9, section 6) and provide greater support to household businesses
2.5 Key issues
Strategic development planning
Over the past decade Viet Nam has benefited economically and socially from its open door policy and the resultant increase in trade and foreign direct investment The more open economy has offered many opportunities, but it has also become clear that building an internationally competitive economy is a complex challenge Looking ahead, it will be vital to carefully consider and specify the country’s development priorities and formulate a strategy for how best to face the challenges of integration and benefit from the opportunities it offers The strategy formulation process should consider (i) the practical issues of how to implement and sequence reforms; (ii) how to ensure sustainability, both economic and environmental; and (iii) how to best prepare the people and the economy for the challenges of integration
Policies to promote domestic industry
(14)Private sector development
Current efforts to overcome a number of structural and legal constraints related to enterprise development are welcomed These efforts now need to be consolidated in order to maximise their potential to promote employment creation and a new generation of entrepreneurship Further levelling of the playing field for State-owned and private enterprises will be important in this respect
Factor markets
There is still considerable scope for developing more efficient markets for land, labour and capital The country’s infrastructure also remains relatively underdeveloped, which hampers distribution and efficient allocation of resources
Structural reform
The Government has already taken significant steps to reform the SOE and banking sectors However, the slowdown in growth and the weakening financial position of SOEs have severely impacted the banking sector, highlighting the need for ongoing efforts to strengthen bank regulation and supervision and upgrade the enabling environment for a comprehensive restructuring of the banking sector
Information
Without reliable and timely information and data, it is difficult to make rational, effective and strategic policy decisions Likewise, without transparent and accepted accounting and auditing practices for banks, it is difficult for them to gain the confidence of depositors Similarly, enterprises without such accounting standards are likely to have difficulties in obtaining bank loans or attracting investors This is true for every country, and in Viet Nam there is still a need to improve the availability, timeliness and quality of information There is also a general need for better dissemination of information on policies and laws
2.6 Recommendations for action Globalisation and integration
Formulate and implement a strategy for international socio-economic integration for the coming decade based on Viet Nam’s development priorities, its specific development context and lessons learned from other countries The strategy for integration should assess the country’s strengths and weaknesses, and the opportunities and threats facing Viet Nam in the integration process, especially in the context of the new WTO negotiation round, the development of electronic commerce and the impact of the regional economic and financial crisis
Adjust existing laws and pass new ones to provide a comprehensive and enabling legal framework for integration
Work towards making subsidies and tariffs explicit (tariffication) in order to enhance transparency and facilitate rational decision-making
Formulate and publicise a time schedule with intermediate goals for the integration process Initiate an information campaign and public debate on the impact and requirements of integration Policies to promote domestic industry
Formulate and implement a strategy aimed at improving the competitiveness of industry Include measures for strengthening the primary vehicles of industrialisation, such as private sector promotion—including SME support—foreign investment promotion, further SOE reform and equitisation, and improvement of industrial zone development and management
Further develop national strategies for export development and promotion, and promote the growth of economic sectors with sustained demand for workers
(15)Private enterprise development
Streamline and simplify enterprise and company establishment procedures through implementation of the Enterprise Law
Create a centralised database of registered enterprises and company information and make it available to the public
Improve access to finance/credit by making all borrowers subject to the same rules and by establishing a legal framework that makes it easier to make use of collateral and mortgages
Improve access to foreign exchange to facilitate foreign investment and trade
Simplify income and corporate tax, and VAT Introduce equal tax treatment for all types of enterprises Facilitate increased international trade by lowering tariffs and simplifying customs procedures
Assess the current problems facing industrial zones and formulate a national strategy to more effectively utilise the zones as vehicles of industrialisation
Factor markets
Establish a level playing field for all enterprises, private and public, by ensuring equal access to land, capital, credit, imports, technology and training
Support further infrastructure development to improve distribution and resource allocation
Strengthen technical education to enhance capacity to absorb know-how and technology, including information and training on new technologies and negotiation of technology transfer contracts
Improve data collection, analysis and dissemination as a basis for sound business decisions and to facilitate strategic planning based on accurate information
Upgrading the legal framework
Develop the capacity of relevant authorities to devise, implement and enforce strategies, policies and laws Strengthen and implement bankruptcy, competition, and contract and enterprise laws
Establish a fair and transparent economic dispute resolution mechanism Financial sector reform
Develop and adopt a banking sector strategy aimed at restructuring banks and strengthening the regulatory and supervisory framework
Support the development of a banking system based on commercial lending principles of credit assessment, selection and monitoring of borrowers, by initiating training courses in credit assessment and risk management Undertake reliable, independent audits of SOEs and domestic banks to assess the quality of existing investments and related loans, and to determine capital adequacy and provisioning for bad loans
Based on the above assessment, prescribe appropriate action for rehabilitation, restructuring, mergers or closures
(16)Poverty line definition
Agency Category of poor Poverty threshold,
VND/month Rice poverty line: the poverty line is set at
the income equivalent to buy 13kg, 15kg, 20kg or 25kg of rice per month (1995 prices)
Food poverty line: based on the level of expenditure needed to buy food (rice and non-rice) to provide 2,100 calories per person per day
General poverty line: combines the above food poverty line (equivalent to 70% of expenditure) with a non-food component to allow for basic non-food expenditure (30%)
Human Poverty Index: measures poverty as deprivation in dimensions of life: longevity, knowledge and a decent standard of living The index is composed of indicators: illiteracy, life expectancy, underweight children and access to health services and safe water
MOLISA Hungry
Poor (rural mountainous) Poor (rural plains) Poor (urban) Foof poor
Poor
Human poor
45,000 (13kg rice) 55,000 (15kg rice)
70,000 (20kg rice) 90,000 (25kg rice) 66,500 (1992/93 World Bank only) 107,000 (1997/98 World Bank/GSO) 97,000 (1992/93) 149,000 (1997/98)
Composite index with no monetary equivalent World Bank/ GSO World Bank UNDP
Chapter 3: Poverty
3.1 Poverty in the Vietnamese context
Since 1986, when Viet Nam launched its policy of doi moi, or renovation, economic and social conditions have improved considerably The strong economic growth over the past ten years, combined with a relatively equitable underlying distribution of assets and services—such as land, health, education and family planning—among the population, have contributed to an improvement in the welfare of most Vietnamese households Per capita GDP has risen from less than VND1 million in 1990 to more than VND4.1 million in 1997 (up 57% in real terms) This considerable increase has contributed to an impressive reduction in the incidence of poverty
Defining and measuring poverty
Poverty has many dimensions, but the essence of the concept refers to the lack of a minimum level of physical or human resources to lead a decent life Absolute income poverty measures the share of the population disposing of a level of income or expenditure below a threshold considered necessary to satisfy basic human needs (the threshold is often expressed as a calorie equivalent) The concept of human poverty conveys a broader picture of deprivation, by encompassing elements other than income or expenditure It refers to the lack of essential human capabilities, such as the lack of access to education, health, food, water and infrastructure, and an inability to participate in national life—economically and politically While the concept of human poverty gives a more complete picture of deprivation in a country, income or expenditure poverty is a more practical and quantifiable tool to describe the state of poverty and to analyse changes in poverty over time A number of poverty lines are used in Viet Nam (Table 1)
Table 1: Poverty lines in Viet Nam
(17)But these great achievements should not hide the fact that Viet Nam remains a poor country As many as 12.5 million people (15.7%) live in poverty and 1.5 million people face regular hunger (MOLISA 1999) According to a broader definition of poverty used by the World Bank, no less than 28 million people (37.4%) continue to lack the minimum income necessary to provide a decent standard of living (GSO 1999a) Today, 57% of the population still lacks access to clean water, only one household in five has access to sanitation—posing severe health problems—and 39% of children are underweight
In addition, although the rapid economic development of the past decade has been a major catalyst helping the bulk of the population to exit from poverty, some concerns have been raised about the equality of this development process Many households continue to face difficulties in raising themselves above the poverty line for reasons of lack of access to markets, lack of employment or education opportunities, poor health, a difficult living environment, or lack of information and participation Consequently, the welfare gaps between rural and urban, between different regions, and between rich and poor are widening; in particular, poverty remains prevalent and persistent among ethnic minority people In addition, while the poverty status of most girls has improved over the past five years—less so for ethnic minority girls—inequalities still commonly persist between men and women within households in terms of the quality of life, decision-making power and access to land and services 3.2 Poverty trends
All existing measures of poverty indicate a clear and impressive decrease in the incidence of poverty in Viet Nam over the past five years (Table 2) Such a rapid and sizeable reduction in poverty is quite extraordinary for a country with a very low average income per capita and at a relatively early stage of its development process In fact, the rate of decline in poverty in Viet Nam is one of the fastest recorded anywhere
Table 2: Poverty incidence in Viet Nam, %
1 World Bank figure only; 2 World Bank/GSO figure; 1997 index using data from various years. Sources: MOLISA 1999; GSO 1994, 1999; UNDP 1999a; UNDP 1999b
This reduction in the incidence of poverty has been accompanied by a reduction in other measures of poverty, according to two Viet Nam Living Standards Surveys (VLSS) conducted in 1992/93 and 1997/98 In terms of the intensity of poverty, of those households that fall below the poverty line, more are now nearing the poverty threshold than five years earlier In terms of the severity of poverty, there has also been a significant reduction in the gap between the expenditure of poor and very poor households
The improvement in the lives of so many Vietnamese people is explained by the rapid growth resulting from the implementation of reforms since the end of the 1980s More specifically, it is attributable to improvements in economic and living conditions in rural areas The agricultural growth and rising agricultural productivity that have accompanied price liberalisation and revised land policies have contributed substantially to falling poverty Crop intensification and diversification from paddy to cash crops and livestock—for which income is usually higher—are also explanatory factors
It should be borne in mind, however, that a large proportion of those who have grown out of poverty in the five years to 1998 now live just above the poverty line, and therefore remain extremely vulnerable to a number of shocks at the macro and household level that could quickly push them back into poverty In order to reflect this vulnerability, it may be more useful to define the scope of poverty using a range of 30-45%
Agency Poverty lines 1992/93 1997/98
Hungry 5.0 2.0
MOLISA
Total poor 30.0 15.7
World Bank/GSO Food poor 24.91 15.02
World Bank Poor 58.1 37.4
(18)3.3 Inequality trends
Compared to other developing countries, Viet Nam’s population is relatively equal in terms of distribution of expenditure between households The VLSS figures indicate that in 1997/98 Viet Nam had a Gini coefficient of inequality of 0.35, up from 0.33 in 1992/93 (GSO 1999a) Nevertheless, this reflects significantly lower inequality than in other developing countries in Asia The latest World Development Report presents comparable Gini coefficient indices of 0.36 for Viet Nam, 0.43 for the Philippines and 0.46 for Thailand (World Bank 1999) (The Gini coefficient measures the inequality in expenditure distribution among the population, with inequality increasing the nearer the figure to one.)
One explanation for the relatively low inequality in Viet Nam is the Government’s traditional concern for equity and the policies of a Socialist State, which have contributed to the widespread availability and use of health services—including family planning—and basic education, the redistribution of land and a return to family-based farming The Government’s priorities have also ensured considerable investment in rural areas, where most of the poor live
Although rapid economic growth is almost invariably accompanied by some reduction in the incidence of poverty, it does not go systematically hand-in-hand with a decrease in inequality The critical factor is whether reforms and the related growth reach all households, or if some are left out of the development process History has shown that countries undergoing the transition from a socialist to a more market-oriented economy often suffer from some increase in inequality Viet Nam is no different in this respect Although the level of inequality remains relatively low, it is increasing, if only at a modest pace
Expenditure inequality
In 1992/93 Viet Nam’s poorest families spent on average VND854,000 per capita a year, compared to the average VND3.9 million spent by the richest families By 1997/98 the relative expenditure of the poorest and the richest was VND1.1 million and VND6.1 million respectively These figures testify to the widening gap between rich and poor in Viet Nam In 1992/93, the richest 20% of households were spending on average 4.6 times as much as the poorest 20% By 1997/98, this figure had risen to 5.5 times (GSO 1999a)
Rural/urban inequality
Poverty remains a predominantly rural problem in Viet Nam—notwithstanding the fact that the rural poverty rate decreased substantially, by 21 percentage points, from 66.4% in 1992/93 to 44.9% in 1997/98, according to the World Bank’s definition (GSO 1999a) The urban poverty rate has reduced dramatically to 9% in 1997/98 from 25% in 1992/93 (Table 3) However, the 1997/98 figure significantly underestimates the true extent of urban poverty, since it does not include urban migrants, an estimated 25-50% of whom are poor
Table 3: Rural-urban inequalities
Source: GSO 1994, 1999a; GSO 1999b *1998 comparative prices
The poor in rural areas are much poorer than the poor in urban areas, as their expenditure levels are much further below the poverty line The rise in inequality between rural and urban areas is also confirmed by the increase in the difference between average urban and rural expenditure levels In 1992/93 the average annual per capita expenditure was 1.8 times higher in urban areas than in rural areas; by 1997/98 it was 2.2 times higher
1992/1993 1997/1998
Urban poverty incidence, % 25.1 9.0
Rural poverty incidence, % 66.4 44.9
(19)A snapshot of rural and urban poverty
Poor rural families typically suffer from geographic isolation, since many live in mountainous or remote areas, which become inaccessible during the rainy season or which are not linked to markets and towns by road These families also tend to have access only to small plots of land, or land with poor soil, which limits their potential to generate income Under these conditions it can be disastrous if any working member of the family is struck by illness, livestock are hit by disease, a harvest fails or is destroyed, or the household is hit by natural disaster Another common problem across poor rural households is the shortage of capital, which compels families to borrow money to acquire land or materials or to cover the costs of health and education services The consequence is often heavy debt, which keeps families in the poverty trap by forcing them to sell their crops, or lease or sell their land
In Viet Nam’s cities, poverty has a different face Both Ha Noi and Ho Chi Minh City have seen a huge influx of migrants from rural areas over the past few years Although many migrants have managed to obtain jobs in the formal or informal sectors, urban life involves many hardships Not least are those associated with the illegal status of provincial inhabitants who migrate to the cities, such as difficulties in accessing Government-funded education, health, housing and other services Moreover, the regional crisis has translated into growing levels of unemployed and underemployed in Viet Nam, which have hit the urban poor—and especially migrants— hardest
Children most visibly manifest the face of urban poverty A growing number of street children not attend school and are forced to beg in the streets or sell small items or food to earn their living Such children are potential victims of a variety of problems and situations, including child prostitution and subsequently the risk of HIV/AIDS infection, child trafficking, drug abuse, child labour, homelessness and conflicts with the law Whilst there are a number of factors that put children into these difficult circumstances—including the negative impacts of a more market-oriented economy, rapid social and economic change, disparities in the distribution of wealth, migration, urbanisation and disintegration of households—many of these find their roots in poverty
Regional inequality
The incidence of poverty also varies by region (Table 4) In 1997/98 the three regions with the highest rate of poverty were the Northern Mountainous, the Central Highlands and the North Central regions—the same three poorest regions as five years ago The remote Northern Mountainous region is by far the poorest region, with over half of its population (58.6%) living in poverty in 1997/98 By far the wealthiest region is the South-east, the country’s major industrial region—including large commercial centres such as Ho Chi Minh City—with only 8% of its population recorded as poor
Table 4: Poverty incidence by region, %
Source: GSO 1994, 1999a; MOLISA 1999
Regional inequality partly mirrors the rural/urban divide, since households living in the poorest four regions derive the majority of their income from agricultural activities In the three richest regions the sources of income are more diversified, the most important being non-farm self-employment, and wages in the South-east In 1997/98 people in the South-east were spending on average 2.6 times more than in the Northern Mountainous region, and
Region VLSS I
92/93 VLSS II97/98 MOLISA1992 MOLISA1998
Average per capita expenditure, 1992/93-1997/98 growth rate, % Northern
Mountainous 78.6 58.6 35.5 22.4 33
Red River Delta 62.9 28.7 20.6 8.4 57
North Central 74.5 48.1 44.0 24.6 48
Central Coast 49.6 35.2 35.7 17.8 30
Central Highlands 70.0 52.4 48.0 25.7 26
South-east 32.7 7.6 20.0 4.8 80
(20)between 1992/93 and 1997/98 expenditure levels in the South-east grew by 80%—up to three times as fast as in the poorest regions In addition to households in the poorest regions deriving a large portion of their income from agriculture, the vulnerability of some of these regions to natural disasters also helps to explain the regional poverty divide For example, in the Mekong Delta floods regularly destroy crops and in the North Central region frequent typhoons deepen poverty by destroying houses, infrastructure and crops
Ethnic minorities
Comparison between the VLSS of 1992/93 and 1997/98 shows that poverty remains prevalent and persistent among Viet Nam’s ethnic minority population, and that inequality is increasing between ethnic minorities and the Kinh majority At 75%, the poverty rate among ethnic minorities in 1998 was double the national average of 37% (GSO 1999a) A much lower poverty reduction rate among ethnic minority people—falling 11 percentage points between 1992/93 and 1997/98, compared to the national average reduction of 21 percentage points—has resulted in their increased share of the poor in Viet Nam (Table 5)
Table 5: Poverty among ethnic minorities
Source: World Bank estimates based on VLSS II
Many ethnic minority populations suffer from greater isolation than the Kinh majority, essentially because of their remote location, poor infrastructure and linguistic differences In some remote areas the education system is very poorly developed, with a shortage of teachers and classrooms School enrolment and literacy are low, particularly among ethnic minority girls Food security is often not guaranteed, as ethnic minorities commonly live in mountainous areas where the weather is unpredictable and crop yields vary considerably from one season to another Due to few alternative means of income generation, opium poppy cultivation is viewed by some ethnic minority groups in North Viet Nam as an alternative way of generating cash income Environmental sustainability is also a concern in these areas, with population growth putting pressure on already over-exploited forests and land
3.4 Characteristics of the poor
Several factors are closely related to poverty, either because they influence the level of welfare of households, or because they are a direct consequence of poverty These factors include employment, education, health, gender, household size (Table 6), ethnicity, age, land and geographic location
Employment
The main source of income for poor households continues to be agricultural activities In 1997/98 almost 80% of the poor worked in agriculture More than half of the income of the poorest 60% of households comes from agricultural activities, mostly in the form of self-employment The seasonal and sometimes unreliable nature of this income, combined with a deficit of off-farm jobs, makes rural underemployment a major cause of poverty In urban areas the situation is better, as the vast majority of job opportunities with Government institutions, State-owned enterprises and the private sector, including informal activities, are concentrated there Nevertheless, migrants to the cities and poor urban dwellers are feeling the effects of an increasingly crowded labour market in the cities, as State-owned enterprises scale down and streamline their businesses and since growth in Viet Nam’s once-booming city economies has slowed
Health
The correlation of poor health to household income illustrates well the greater vulnerability and exposure of poor people to poor health and malnutrition Poor women and children tend to be disproportionately afflicted In rural areas limited access to clean water, lack of immunisation, insufficient food and an unbalanced diet have the
(21)most negative consequences on the health of newborn babies, children and mothers Malnutrition—leading to iron deficiency anaemia for women—and the lack of access to prenatal care affect both poor mothers’ health and the weight of the newly born Lack of food and clean water has a vital impact on children’s physical and mental development and puts them at greater risk of poor health later in life, making them less productive and thus more prone to poverty In households containing one or more drug addicts, a significant proportion of expenditure is diverted to buying drugs, leading to a strong correlation between illicit drug use and poverty Table 6: Human development among Viet Nam’s poorest and richest people, 1997/98
Source: GSO 1999a
Education
Level of education is also closely related to poverty The average number of years of education of the poorest 20% of households remains half that of the richest 20% of households In rural and remote areas in particular, the relatively high cost of schooling and long distances to schools often keep children away from school and contribute to dropouts In 1998 40% of the people who had never attended school came from the poorest 20% of households, while only 9% of them were from the richest 20% Only 10% of the people who had finished upper secondary school were from the poorest 20% of households, compared to 37% from the richest 20% The literacy gap between the poorest and richest also remains significant, although it should be borne in mind that the literacy rate for the whole population of most developing countries is much lower than the literacy rate for the poorest section of the population in Viet Nam Female literacy is lower than for males at all levels of household income, though the gap is biggest for older people and ethnic minority populations Fewer ethnic minority girls have access to and complete secondary school than any other sector of the population A recent participatory poverty assessment conducted in two remote communes with predominately minority populations in Lao Cai province found that there were no adult women who were literate (SRV et al 1999)
Age
Households headed by young people are poorer than households headed by the middle-aged and elderly Almost 40% of households headed by 25- to 30-year-olds are in the poorest 20% of households, with this share declining with the increase in age of the household’s head In addition, young, poor, newly formed households have less land and often of worse quality, due to difficulties in transfer of land after marriage or leaving the parents’ house Only 14% of households headed by 50- to 60-year-olds are in the poorest 20% of households, with 25% in the richest 20% As many as half of the households headed by 65-year-olds or above are in the richest 40% of households, with only 15% in the poorest 20% Average per capita expenditure of households headed by 50- to 70-year-olds is around 1.5 times higher than the expenditure of households headed by under 30-year-olds Gender
Even within the same household, poverty status can differ between male and female members Viet Nam has a strong differentiation of labour tasks Women tend to work significantly longer hours than men (OXFAM GB et al 1999) and their average monthly earnings are 22% less than men’s (GSO 1999a) Viet Nam scores impressively in terms of access for children of both sexes to education and health levels, for which there is little or no gender gap (GSO 1999a) However, adult women—particularly those from ethnic minority groups—do fare worse in
Social indicators 20% poorest 20% richest
Fertility rate (number of children) 3.5 2.1
Household size 5.6 4.1
Pregnant women receiving prenatal care, % 50 83
Underweight children with moderate malnutrition, % 43 18 Underweight children with severe malnutrition, %
Children with low birth weight, % 11
Sick people unable to usual work in past month, % 56 38
Average number of years of education 4.4 8.2
Literacy rate, % 78 95
(22)terms of education, literacy and adequate access to health services Women also have lower nutrition status, partly because it is customary to feed men and boys more and better food, which discriminates against the health of women and girls Women and girls are also more disadvantaged by the increased cost of public welfare facilities—such as kindergartens, schools and health care—since this tends to increase the burden on women and girls to raise and care for family members at home Men tend to monopolise decision-making power, and women also lack control and access to essential resources such as land, which is usually registered in the male’s name Without any land to offer as collateral it makes it more difficult for women to access credit
Household size
It is a common correlation worldwide that better-off families are somewhat smaller than poorer families This also holds true for Viet Nam The correlation is partly explained by the fact that wealth quintiles (grouping the population into 20% segments from poorest to richest) are determined using per capita expenditure, so that members of larger households are automatically poorer But there are other factors behind the relationship between household size and welfare Poor households are usually larger because they depend on a greater number of children to support the household financially They also choose to have more children to compensate for the fact that a greater number of poor children die in early childhood than children from richer households Irrespective of their choice about family size, poor couples often lack information on, access to and the means to afford contraceptive methods, meaning they have less control over the number of children they have Larger households are also particularly vulnerable to changes in health and education costs
Geographic location
Poverty remains a predominantly rural phenomenon Isolation from markets, health and education facilities, and sources of information, is a major factor accounting for the high incidence of poverty in rural areas This isolation often goes hand-in-hand with poorly developed, even non-existent, infrastructure, and lack of means of transport Lack of access to productive resources in some rural areas further reinforces the poverty trap The shortage of capital and sufficient quantity and quality of land, coupled with the shortage of knowledge and skills, prevent households from developing productive and sustainable sources of income These shortages also deprive households of tools to help them better manage risk and uncertainty The unpredictability of the rural environment and climate makes households that depend on agricultural outputs to survive very vulnerable This extreme vulnerability to natural catastrophes as well as to the loss of a family breadwinner (through migration as well as death or illness), crops or livestock is a typical characteristic of poor rural households, and goes a long way to account for the rural-urban poverty gap
3.5 National responses
Aware of the challenges of alleviating poverty, and following a tradition of concern for equity, the Government has put social development and poverty reduction at the forefront of its development agenda At 8.5% of total 1997 State resources, spending on basic social services still fell some way short of the 20% committed in 1995 at the World Summit for Social Development (WSSD), according to the international definition of social services (using the national definition, social spending in 1997 had reached 17.2% of total State expenditure) Nevertheless, spending on basic social services is increasing steadily, and is up from 6.1% and 12.7% in 1990 according to the international and national definitions respectively (SRV 1998)
(23)One of the major activities of the HEPR-related programmes is the provision of subsidised credit About 30% of the budget of the National Target Programme for HEPR and more than 90% of the budget for the National Target Programme for Employment are used for the provision of credit through the Viet Nam Bank for Agriculture and Rural Development and the Viet Nam Bank for the Poor (VBP) The latter has set a target to provide up to VND2.5 million per household (with a repayment term of up to three years and without requirements for collateral) to 90-95% of poor households by 2000 Currently, the VBP estimates that 60% of poor households have been given loans (UNDP 1999b) However, in 1997/1998 credit provided by the VBP and the HEPR programme to the poorest 40% of households made up only 20% of total loans, while nearly 30% of the total credit sources were given to the richest 40% of households (GSO 1999a) Overall, women received less than 10% of VBP loans These figures clearly indicate the need to direct more funds to the poorest and to women However, repayment ability remains a constraint on the allocation of credit Around 10% of responding households in VLSS II stated that they could not repay their loans, whilst another 14% could only repay with difficulty (see Chapter 9, section for more on credit).
Also in 1998 the 1,715 Poor Communes Programme was launched to target communes faced with extreme difficulties in mountainous and remote areas, where ethnic minorities make up the majority of the population With a planned budget of VND410 billion in 1999, the programme will first concentrate on assisting the 1,000 communes in most need of support In 2000, further budget provision will be made available to assist an increased number of communes
Both of the Government’s poverty alleviation programmes encourage the greater decentralisation and delegation of implementation authority to the provincial and sub-provincial levels, and promote community participation as important measures to improve the effectiveness and targeting of poverty reduction investments
Aware of the need to develop formal social safety nets to protect vulnerable groups, the Government spends around 14% of its budget on social transfers, and has been developing a number of social insurance schemes and relief funds However, most of the social allowances are provided to special priority groups, such as those recognised for their contribution to the country during war time Currently, only 11% of Viet Nam’s labour force (mainly from the Government sector or urban areas) have social insurance, and no unemployment scheme is yet in place The benefits of the Social Guarantee Fund for Regular Relief reach only a minority of those qualified to receive assistance Due to the poor definition of who is eligible for the fund, even the low shares of 24% of orphans, 15% of disabled and 46% of solitary elderly receiving assistance in 1998 are likely to be overestimated The Contingency Funds for Pre-Harvest Starvation and Disaster Relief designed to aid poor faced with disasters such as typhoons, floods and crop failures similarly only reach a small proportion of those in need, and the level of relief is often too low to significantly aid the recipients (GSO 1999a; UNDP 1999b)
To address the needs of poor and at-risk children the Government launched a National Programme of Action for the Protection of Children in Special Circumstances in mid-1999 The Ministry of Public Security is responsible for implementing the programme, which includes measures to help street children and protect children from labour abuse, trafficking and prostitution, juvenile delinquency and drug abuse Viet Nam was the first country in Asia to ratify the International Convention on the Rights of the Child
3.6 Key issues Effective targeting
(24)There are still distinct groups of people that remain relatively disadvantaged with regards to poverty: ethnic minorities (including current and former opium-producing communities), households in geographically remote areas, women and children These groups require specific consideration and targeting in order both to decrease inequality and eradicate extreme poverty
Another targeting issue relates to the effectiveness of social safety nets Currently, the percentage of the eligible population receiving formal social safety net services and benefits is low and the assistance provided—such as small cash and food transfers—has insufficient impact on improving the welfare of recipients
Sustaining growth and funding
A large portion of the population just escaping poverty is extremely vulnerable to small shocks or crises at the macroeconomic or household level Strong and sustained economic growth in the next five to ten years is needed to consolidate past achievements in poverty alleviation and prevent a significant section of the population from falling back into poverty For the same reasons, the recent economic downturn can not be allowed to threaten Government spending on basic social services and poverty alleviation programmes
Poverty alleviation programmes
The funding level of the National Target Programme for HEPR and of the 1,715 Poor Communes Programme is low in light of the targets set The funding situation is made more serious given the lack of a long-term funding strategy and plan, and in view of the fact that only 38% of the total funding for the National Target Programme for HEPR is expected to come from the central Government
Both poverty alleviation programmes still suffer from an unclear organisational structure and distribution of responsibility and accountability among stakeholders at all levels They are also handicapped by limited management, implementation, co-ordination, and monitoring and evaluation capacity, as well as an inadequate number of qualified staff—especially at the commune and district levels These weaknesses contribute to the slowdown in the implementation of the programmes and their limited capacity to absorb more funding For example, by end-August 1999, only about 20% of the 1999 plan of the 1,715 Poor Communes Programme had been implemented, even though 70% of the funding for the programme had already been transferred to local State Treasury accounts
Furthermore, although the two programmes promote greater decentralisation and participation by local communities and people at the implementation stage, there is still inadequate participation of local people in identifying their own problems, needs and solutions and in making decisions related to planning, management, implementation, monitoring and maintenance of the projects that affect their lives This, together with the above mentioned organisational and capacity problems, may result in low efficiency, inappropriate targeting, limited impact and sustainability of the two programmes
The HEPR-related programmes also lack sufficiently clear targeting strategies and differentiated approaches in dealing with specific groups of poor, particularly ethnic minorities This leads to the risk of the programmes being unable to reach some groups of the poor, which sometimes not even have access to information about the programme benefits available to them Some groups of the poor—especially the poorest—still have limited access to formal credit provided by the programmes Reasons for this include cumbersome procedures, poor targeting, the inflexibility of credit terms, the inability of the poorest to use the credit to accumulate assets, untrained and poorly resourced banking staff, and the requirements for collateral Another concern is the financial sustainability of the credit components of the HEPR-related programmes in view of their highly subsidised interest rates which, even so, are still failing to ensure access to loans for the poor, and the inability of the formal banking system to provide savings facilities to poor households
Methodology
(25)3.7 Recommendations for action
As the Government reform process proceeds, particular attention should be paid to those reforms that directly affect the rural poor involved in agriculture—such as gender-equitable land policy (to ensure the landless have access to agricultural and forest land), pricing reforms, regulations regarding agricultural exports, and adjustments in taxes, fees and other contributions
Increase the proportion of the Government’s and donors’ resources spent on basic social services from 8.5% and 10% respectively in 1997 (using the UN’s definition) to the 20/20 targets by 2004 Both in addition to and as part of this target, funding as well as efficient management of funds for poverty alleviation programmes should be increased, in order to achieve the Government’s goals for hunger eradication and poverty reduction in the early years of the next millennium
Institutionalise gender-sensitive participatory approaches in HEPR-related projects and programmes Develop appropriate strategies to apply the Government Decree on Grassroots Democracy, in order to promote greater decentralisation and participation by local communities and individual men and women in identifying their own problems, needs and solutions, and in making decisions related to planning, management, implementation, monitoring and maintenance of the projects that affect their lives Related to this, ensure the building of local knowledge and capacity to preserve and manage local heritage and indigenous cultural practices
Based on the existing 1,715 Poor Communes programme and the National Target Programme for HEPR, develop a specially targeted, gender sensitive, integrated rural development programme to tackle persistent poverty—especially among ethnic minorities—with a clear and strong organisational and management structure, and sufficient and qualified staff, particularly at the local levels Such a programme should build on indigenous knowledge and target the most needy regions, such as the Northern Mountainous region and the Central Highlands Poverty alleviation programmes in disaster-prone regions should include a disaster preparedness/ mitigation of impact component and ensure a sustainable use of local resources, especially in upland areas
Actual provincial expenditure figures on the HEPR and 1,715 Poor Communes programmes should be fed back to the central Government—and not only to the Ministry of Finance—in order to assist planning for future programme phases
Use the Partnership to Assist the Poorest Communes (PAC) mechanism to develop a comprehensive multi-donor/Government project to support the national poverty alleviation programmes and to practise partnership, as well as to learn from and build on each other’s experience
Improve co-ordination among the Government line ministries and agencies, and Women’s Unions at various levels, as well as between central and local authorities involved in HEPR
Create a unified national poverty line and poverty assessment methodology suitable for Viet Nam Establish a workable poverty monitoring system along with mechanisms to monitor and evaluate HEPR-related programmes and projects
Develop a formal banking system for the poor and rural areas that is:
• financially sustainable (based on average market interest rates, with sound savings services and efficient and effective management);
• user friendly and easily accessible, especially for poor ethnic minority women (with simplified procedures, clear targeting criteria and flexible credit terms); and
• widely publicised
(26)Improve formal social safety nets by:
• separating Pre-Harvest Starvation and associated supplementary assistance from the Disaster Relief Fund (DRF), in order to ensure accumulation of the DRF in years of few/no disasters, and transferring the former to the Social Guarantee Fund for Regular Relief The Disaster Relief Fund should become a central fund financed by general contributions from provinces in proportion to their resources, by the central Government and external aid
• creating better targeting criteria and mechanisms and strengthening the capacity of the above mentioned Funds in management and service delivery, with the twin objectives of improving access for poor and needy people to the services of the social assistance funds, and enhancing the effectiveness of the funds’ assistance and its impact on target groups
• expanding the coverage of the existing insurance schemes to rural areas and the informal sector • improving the targeting strategies and implementation of policies on (i) exemptions for children from
poor households from school fees and contributions, and (ii) providing free health insurance cards to ensure equality of access to health services to all family members of poor households
(27)Chapter 4: Governance
Governance is the exercise of economic, political and administrative authority to manage a country’s affairs at all levels Good governance should involve three key participants—the State, the private sector and civil society— as equally represented and valued partners in governing the affairs of a country (Figure 5)
Figure 5: The three key players in governance
Good governance rests on four pillars:
• Participation: where all men and women have a voice in decision-making, including the poorest, those living in remote areas as well as the most vulnerable members of society
• Rule of law: where legal frameworks are fair and impartially enforced
• Transparency: which relies on the free flow of relevant and understandable information • Accountability: where decision-makers from all three key sectors are answerable to the public
The capacity of the three key partners in administering the country’s affairs is critical to human development The State creates a conducive political, economic and legal enabling environment The private sector generates jobs and income, and civil society facilitates political and social interaction The effective functioning of each participant, and a constructive partnership between all three, are also crucial in order to balance the strengths and weaknesses of each
The launch of doi moi in Viet Nam marked the beginning of a transition from a centrally planned to a more market-oriented economy and the adoption of the rule of law Having embraced a programme of renovation (doi moi) in the political, economic, legal and public sectors, Viet Nam has become a more open society However, there is still some uncertainty from the Government regarding which point on the sliding scale between a market-oriented and centrally planned system Viet Nam should opt for, which has important implications both for the role of the private sector in the economy, as well as for the efficacy of the governance system Much also remains to be done to improve the efficiency of governance structures and processes, and enhance participation in governance for the benefit of Viet Nam
4.1 The State
The political framework
Viet Nam’s political framework has undergone considerable change in support of the rule of law and to increase representation and accountability Formally, Viet Nam has a unitary State structure, with all political power concentrated in the National Assembly and one-party political system As stated in the 1992 Constitution, “the Communist Party of Viet Nam is the force leading the State and society” (Article 4) The 1992 Constitution made the National Assembly the highest body representing the people It is also the highest legislative body and exercises “supreme control” over all activities of the State All of the institutions of the State, including the Executive Government, the Supreme People’s Court and the Supreme People’s Procuracy, report to and derive their legitimacy from the National Assembly The Government is the executive body of the National Assembly and the highest administrative body of the State
State Civil
Society
(28)“Democratic centralism” continues to be the principle governing the organisation and functions of all State organs, according to which decisions are made centrally, although views of concerned agencies and individuals are also taken into consideration The prerogatives of national sovereignty and stability are afforded the highest priority and play a key role in shaping political decisions
Significant challenges remain on the road to a more market-oriented system, both in terms of establishing a clear consensus on the direction and pace of reform, and the capacity of Government institutions and personnel to effectively implement reform The Government is still trying to define how to balance the socialist ideology notion of equity for all, which encourages a more interventionist role of the State as caretaker of the people, and the pragmatic requirements of a market-oriented economy, in which market forces to a large extent regulate the economy, while the State tends to concentrate much more on policy framework, global strategies, enabling legal framework development and monitoring Currently, there is no clear demarcation between the “steering” (policy intervention) and “rowing” (direct intervention) role of the State However, if the country’s productive forces are to be better mobilised and the allocation of resources rationalised, it is essential that the State’s direct role in the economy be further reduced, and its enabling role as policy-maker and legal framework provider further strengthened Although there has been steady progress in revising old laws and devising new ones, Viet Nam is still in need of a more comprehensive, clear and enabling legal framework to provide the basis for the emergence and development of a healthy and stronger private sector and civil society with which the Government can finally, in all confidence, share the responsibility for the country’s development
The challenge of transition from one system to the other is not confined to shifting mindsets and rallying the political will It is also a question of capacity Limitations in terms of the effectiveness and efficiency of the current system result in gaps between the requirements of change and the responsiveness of the system in terms of institutional and human resources New market institutions need to be set up and existing institutions streamlined The capacity and experience needed to implement these changes—particularly with regard to management skills—is still limited
The issues of corruption, abuse of power and respect for citizens’ rights have been recognised by the Party and the Government and need to be comprehensively addressed as part of the reform process The former issue at least partly results from an insufficiently performance-based wage and job allocation system—a problem which the Government has begun to address Additional challenges include improving transparency as well as enhancing public awareness of, and participation in, the political process
The rule of law and transparency
(29)However, some important obstacles remain to a genuine separation of powers of the different arms of Government According to the judicial structure, only the Supreme People’s Court is independent from the administrative control of the Government The lower courts are still administered both by the Ministry of Justice as well as by the local authorities within their jurisdiction The presence of the Procuracy, with its role of “supervising” court decisions, draws the independent decision-making of the courts further into question
The Procuracy is already in principle unified and institutionally independent at the central and provincial levels from the administrative control of the Government The key task with respect to this institution is to ensure that it is able to perform both its prosecutorial and supervisory roles in a well-informed, positive and transparent manner
In addition to structural issues, the existing procedural rules for civil, economic and administrative cases also weaken judicial independence because of the lack of clarity regarding the potential remedies afforded the judiciary While the revision of the Civil Procedure Code may strengthen the courts in this respect, it is unlikely that this alone will lead to a strong, independent judiciary The development of a judiciary with the independence and authority to resolve disputes under the law remains an urgent priority
In terms of the content of the law, the legislative process would benefit from strengthening the capacity for policy analysis Increasing the meaningful participation in law analysis and policy debates of Deputies and other entities eligible to take legislative initiatives, will enable a greater concentration on national policy issues with respect to the law rather than unstructured debates over technical matters The aim should be to draft laws that are more focused, designed to achieve clearly defined goals and allow for improved implementation As such, increasing the ability of the National Assembly to make informed policy decisions—perhaps through the establishment of a law-drafting and policy-analysis service within the Office of the National Assembly—would help Viet Nam to build up a more harmonised legal system with laws drafted in congruence with national policy and according to a professional drafting procedure
While many new laws have been passed, effective and consistent implementation remains limited in many cases Problems occur both at the stage of drawing up implementation codes for laws, and in the actual implementation and enforcement of laws Encouraging more outside consultation with concerned parties in the law- and policy-analysis process would improve the transparency of the process as well as make it more participatory Thereby, it would also increase the likelihood of effective implementation of and compliance with these laws, once enacted
In the interests of bolstering the transparency and accessibility of the law, the Government has shown a desire to better publicise and advocate the legal system and encourage the participation of the general public To this end, legislative sessions are now televised, two directives on legal dissemination and a Law on Petitions and Denunciations were issued in 1998, and community outreach programmes have been set up However, there remains a need to reinforce information networks and legal information dissemination structures and ensure that they extend to the most remote areas
(30)Local government and intra-governmental relations
Viet Nam’s local administration system is divided into three levels: provinces (61 units), districts (600 units) and communes (10,330 units) Each locality at all of these levels has a representative organ (People’s Council) and an executive organ (People’s Committee), which roughly correspond to the National Assembly and the Government at the central level
Local authorities can not carry out any public administration functions unless explicitly assigned such responsibilities by national legislation In this regard, following stipulations in the 1992 Constitution, the Law on Organisation of the People’s Council and the People’s Committee (1994) and the Ordinance on the Concrete Tasks and Powers of the People’s Council and People’s Committee at Each Level (1996) were promulgated, in order to provide the basic legal framework for local government organisation and operation The Budget Law (1996, 1998) formalised the fiscal arrangements between different levels of Government, assigning important budget responsibilities to local authorities, especially at the provincial level
The 1992 Constitution stipulates that the popularly elected People’s Council is “the local organ of State power”, which in turn elects the People’s Committee as its executive organ But in practice, there are a number of obstacles for People’s Councils to carry out this function effectively While the tasks of People’s Councils are increasing in importance as well as volume, they are poorly equipped in term of basic resources, skills and infrastructure People’s Councils normally meet in two four-day sessions a year, which typically take place after the two sessions of the National Assembly, that gives the impression that contribution of People’s Councils to policy discussions of the nations not substantial
Relations between different levels of Government are complicated in many ways First, the People’sCouncils at all levels are supervised and guided both by the Standing Committee of the National Assembly and the Government Second, the People’s Committees are accountable both to the People’s Councils at the same level, as well as to the next highest executive body (either a People’s Committee or the Government, depending on the level) Third, some central ministries have branch offices in each locality, which are administratively placed under the People’s Committees but which functionally report to the higher authorities along the line of command within each ministry Fourth, most tax revenues belong to the central Government, with local administrations in theory receiving revenue allocations according to centrally dictated norms In practice, however, revenue allocations and expenditures at local level are not strictly and totally controlled by the central authorities, and tend to be determined following a series of negotiations between different levels of Government
While decentralisation of management to local administrations has been an achievement of public administration reform, the above mentioned complicated arrangements suggest that a strategy for a more effective devolution of power and decision-making authority still needs to be developed A further issue that needs to be addressed is that current funding available for localities, especially at lower levels, often does not meet the public service responsibilities of these bodies
The problem on the part of the central Government over decentralisation may be at least partly due to the fact that there is not yet enough capacity within local authorities in order to make them efficient public service providers Problems with efficiency and accountability can be traced to the generally low morale of underpaid local officials and a lack of training, as well as the absence of proper structure of local government
Public administration reform
(31)PAR: “The priority task of PAR is to centralise all regulation-making tasks and decentralise economic and social decision-making for local authorities” (GCOP 1998) PAR has been put at the top of the Government reform agenda and PAR committees established in all ministries and provinces At end-1998 a Government PAR Steering Committee, chaired by the Prime Minister, was set up to guide and monitor PAR activities The Government Committee for Organisation and Personnel (GCOP) is a standing member of the committee and has been assigned as the Government focal point for PAR The Seventh Plenum of the Communist Party Central Committee in August 1999 concluded that there was an urgent need to “examine and readjust the functions, responsibilities and structure of Government organisation and provincial departments”. Noteworthy progress on PAR has already been made Many laws and ordinances have been passed by the National Assembly and put into operation Legal documentation has been reviewed and adjusted to ensure simplicity and consistency Administrative procedures have been streamlined, simplified and publicised, and a system of “one door, one stamp” is already in place in several cities and provinces Recommendations from the public and the business community have been sought on further administrative improvements An Administrative Court has been established In 1995 the number of ministries was reduced from 27 to 22, and a further reduction is planned The streamlining process has been mirrored at the local level In addition, new general corporations have been created which have largely taken over the task of managing key SOEs from the line ministries, allowing the ministries to concentrate on their policy management function—although the potential monopoly power and inefficiencies manifested by such corporations create their own problems A Civil Servant Statute has been promulgated, information technology in Government institutions is being modernised and capacity building training activities conducted
Whilst there has been significant progress in certain areas of PAR, one of the main obstacles to the full implementation of the reforms is the current lack of a comprehensive PAR vision and strategy clearly identifying the steps towards the changed role of the Government in a more market-oriented economy As a consequence, there is still a gap between PAR policy formulation and implementation, which is further exacerbated by a lack of implementation capacity The absence of a clear PAR strategy has also resulted in low consensus on and commitment to this reform and has provided fertile ground for informal mechanisms to operate in parallel with formal ones, undermining the objectives of the reform
Another difficulty is that in many cases civil servants lack sufficient knowledge, skills and attitude to enable effective implementation of PAR Motivation and productivity are also problems, as is the absence of a service culture These problems and lack of proper implementation of policies can be linked in part to low income and benefits Performance-based remuneration is recognised by the Government as a potentially good management tool, however its insertion in a human resources management plan will be part of the new round of discussions that the Government is launching, following the Seventh Plenum, on the salary structure and policy of civil servants
Last, but not least, in every society reform involves an evolution of the status quo that affects power relations among various groups Resistance to PAR may therefore arise among groups that feel at risk of losing influence and power as a result of reform
4.2 The private sector
(32)uncertainty related to the overall investment environment Policy and institutional changes since the formal launching of doi moi in 1986, and the strong growth of the economy and incomes during the 1990s, are gradually improving the scope for the development of the private sector in higher value-added export sectors (seealso Chapter 2, section 4) The private sector already accounts for 98% of value added in agriculture, and some 70% of value added in the service sector (excluding public administration, health and education services) While the State sector continues to dominate industrial production, accounting for about half of industrial sector value added, the domestic private sector plays an important role in a number of rapidly growing light industries Moreover, foreign-invested companies already account for the largest share of value added in some sectors such as oil, gas and automobile assembly
More recent reforms reflect the Government’s increasing commitment to developing the domestic private sector The new Enterprise Law, approved in May 1999 by the National Assembly, is an important step towards levelling the playing field for all enterprises It largely replaces separate legislation governing different types of businesses and also allows, for example, for partnerships and for 100% State-owned enterprises to be incorporated as companies The new law sends an important message to the private sector that the Government positively encourages private sector investment Effective implementation of the law will be critical For the time being, SOEs—several of them loss-making—still dominate the economic scene, slowing down the reform process If the Government wants to effectively move towards a more market-oriented economy, even though SOEs may keep the lead in certain sectors, the legal framework will need to be much further enhanced to allow the private sector to take on its responsibilities and become the engine of growth of the country A thriving private sector could also become an outlet for, and a way to reintegrate, redundant civil servants into the economic cycle, thereby also facilitating the PAR process and Government structure streamlining The transfer to the private sector of a number of functions currently carried out at great expense by the Government would not only provide new impetus to the private sector, but also allow for savings and much more efficient use of public funds A key challenge for the Government in promoting the private sector is to ensure equal treatment for the private and public sectors Having now enshrined this principle in the legal framework, it is very important that equal treatment is enforced in practice, for example regarding access to credit
While recent growth in private sector activity is evidence that private property rights, including contract enforcement, are improving, it is also clear that many market institutions have not been functioning efficiently, such as the registration system for enterprises, thereby hampering the efficient mobilisation and allocation of resources Encouragement of domestic investment—particularly by the private sector—is also crucial for sustainable growth This is a challenging task in an environment in which elements of central planning are retained alongside attempts to move towards a market-based allocation of resources
4.3 Civil society
Promoting empowerment and participation
(33)The Communist Party has been leading both Vietnamese culture and society for many decades The Party exercises leadership by assigning its senior members to key positions in the Government, the State machinery and socio-political organisations at every level Mass or socio-political organisations, such as the Viet Nam Farmers Association (VFA), the Viet Nam Union for Science and Technology Association (VUSTA) and the Viet Nam Women’s Union (VWU), are not strictly part of civil society and still have more the characteristics of State organisations This said, the widespread network of some of these organisations from the central to the local level, and their large membership—for example the VWU has over 11 million members and the Youth Union around four million members—allow them to play an important role in improving communication between the Party and State and the grassroots level These organisations are becoming increasingly responsive to the needs of their members Nevertheless, there remains significant scope for increased participation of the broader society in decision-making
Viet Nam’s open door policy and a number of important recent changes are contributing to the creation of a more enabling environment for the emergence of a civil society These changes include:
a) the development of a system of rule of law, in particular a civil code;
b) the move towards a more accountable, transparent and participatory Government; c) the reform of SOEs, which makes workers and managers stakeholders in the system; d) the emergence of an information society;
e) international economic integration; and f) the move to enhance grassroots democracy
The result of these developments has been significant growth in the number of State groups or quasi non-Governmental organisations (Vietnamese NGOs), which form a central pillar of civil society in Viet Nam Most of these groups were established after 1990, fostered by the renovation process However, the majority were founded by intellectuals in urban areas, despite the fact that it is in rural and disadvantaged areas that there tend to be more social groups of people with common interests and needs Although there are still few local NGOs in rural areas, savings groups and new co-operatives—which have emerged as a result of the 1997 Law on Co-operatives—serve some of the same purposes, by grouping together people with common needs and interests The emergence of many Vietnamese NGOs is encouraging, but these organisations are still young and restricted by historical, economic and social conditions, and by the lack of an enabling legal environment As such, they have not yet been able to develop their full potential to actively contribute to the development of the country The sustainable development of Viet Nam depends on active and constructive interaction between the State, the private sector and civil society Vietnamese civil society will only genuinely develop if the Government sees it as an important partner in the development process, and creates an enabling environment in which it can flourish Gender in governance
(34)Table 7: Representation of women in politics
Source: Viet Nam Country Report to the Fourth World Conference for Women
In addition to addressing gender imbalances in governance structures, attention also needs to be paid to gender issues relating to governance processes National development programmes need to be made gender sensitive through better design and targeting, and in terms of specific project activities, delivery mechanisms and institutional arrangements These programmes should also encourage the full participation of women in planning, design, implementation, monitoring and evaluation
4.4 Key issues
Clarify the role of the State
It is crucial during a transition period as fundamental as the one Viet Nam has embarked on, that the role and organisation of the State is adjusted in tandem to match the new operating environment The transition necessitates an important shift in the role of the State from Government to governance (from direct intervention to policy and regulatory framework provider) and the further development of a practical, comprehensive and articulate legal framework in support of a more market-oriented economy
Strengthen the rule of law and transparency
In continuation of the above, the principle of the rule of law (as promoted by the 1992 Constitution) needs to be further advanced, which will involve strengthening the independence and capacity of the judicial system, strengthening implementation of laws and improving the dissemination of legal information As advocated by the Government and the Party, corruption needs to be tackled effectively at all levels, and openness and transparency made guiding principles of governance in order to increase efficiency, equity and accountability to the public Decentralise Government and increase local government capacity and accountability
Local governments must be empowered and the capacity of local administrations needs to be improved to effectively carry out increased tasks arising from decentralisation There is a need to strengthen the representative system at local levels to incorporate the wishes of local people in deciding public resource allocation and ensuring accountability in public spending
Reinvigorate public administration reform (PAR)
There remains a need to develop a comprehensive PAR strategy, taking into account the changed role of the State in a more market-oriented economy and the relationship between PAR and the process of economic reform Responsibility for PAR should be effectively devolved to local levels, with effective monitoring and evaluation by the central Government It is possible to promote popular participation in the PAR process by raising public awareness and encouraging feedback from the public on the quality and adequacy of public service delivery, and by increased “socialisation” of public services through more involvement of the private sector and civil society organisations in public service delivery Accountability in the management of public finances is also essential
Developing an enabling environment for the private sector and civil society
Developing the private sector and civil society in Viet Nam takes an enabling environment For this to exist, the Government needs to ensure that the public and private sectors are treated as equals, as well as strengthen the effectiveness and efficiency of market institutions, and invest in entrepreneurial and management skills development The important and positive role to be played by Vietnamese NGOs should also be further recognised Promoting the participation of all sections of society in governance needs to be supplemented by specific efforts at promoting participation of women, ethnic minorities and other disadvantaged or excluded groups in the decision-making process and in management positions at all levels, and through national policies and development programmes sensitive to the needs, interests and participation of these sectors of society
Political body % of women members, 1994-99
(35)4.5 Recommendations for action
Further define the role of the State in a more market-oriented economy, reinforcing the guidance, policy-making and monitoring (“steering”) role of the State and reallocating the implementation (“rowing”) role away from the State, in order to provide clearer guidance for the reform process
Foster greater policy dialogue between all pillars of the governance system to allow the various actors to understand their role in a more market-oriented economy and take active responsibility for the development and growth of the country
Enhance the capacity of the various actors to fulfil their societal obligations a) The State:
• Formulate and implement a comprehensive Public Administration Reform strategy to further restructure, streamline and enhance the efficiency and transparency of the Government apparatus, with special emphasis on thorough institutional diagnosis, cost efficiency, decentralisation and quality of public service delivery at central and local levels
• Advance decentralisation by delegating decision-making authority, together with the required resources to implement the decisions, to appropriate levels of Government, simplifying reporting mechanisms, and enhancing the capacity of local government personnel
• Enhance the quality of policy analysis, policy-making and planning at central and local levels b) The private sector:
• Provide clear official endorsement and recognition of the critical importance of the private sector to future employment, incomes, domestic savings and the sustainability of the overall development process needed to eliminate the uncertainty and perceived risks facing potential entrepreneurs
• Reform and develop an effective market-based banking system to ensure that credit is allocated to sustainable and profitable employment-generating enterprises
• Further reform SOEs, particularly by limiting State-directed bank credit to SOEs, in order to free up capital, land, and skilled workers for the private sector
• Substantially increase investments in business education and related practical training
• Through further policy support and lawmaking and implementation, create a favourable environment for private domestic and foreign investment and promote the role of the private sector as the engine of economic growth and employment generation
• Enhance the capacity of private sector organisations, such as effective chambers of commerce, and provide further opportunities for them to participate actively in policy debate
• Promote partnerships between the Government and private sector organisations c) Civil society:
• Enhance the role and capacity of civil society institutions, such as NGOs, professional organisations, trade unions and research institutes and universities
• Promote partnership dialogue and agreements between the State and civil society, in particular in the area of socialisation of basic social services
• Invest in media and communication at the local level, for example through support for community-based media and local language newspapers, in order to promote community participation in governance • Institutionalise structures to ensure that women and men from all levels (from commune to national) and
from all backgrounds—including ethnic minorities, disabled and the very poor—are involved in the design and implementation of decentralisation and governance activities
Further strengthen the rule of law by:
• Enhancing the capacity of the legislature (National Assembly) and judiciary (Court and Procuracy) • Improving the quality of the law-making process, in particular by creating direct linkages with the process
of policy analysis through external consultation, and by enhancing appraisal and review processes • Reducing the scope for discretionary interpretation of the law by State authorities through more explicit
(36)• Improving legal information dissemination, and encouraging abidance by, and strengthening implementation of, the law
(37)Chapter 5: Population
Viet Nam is the twelfth most populous country in the world, with 76.3 million people, and is the second most populous nation in South-east Asia, after Indonesia The population is concentrated mainly in two large river deltas The Mekong River Delta is the most populous region, with a population of 16.1 million, or 21% of the total The second is the Red River Delta, including Ha Noi, with a population of 14.8 million, or 19% of the total The overall population density for the country is not particularly high, at 231 people/km2, but it is very high in the
two main river deltas, where the density rises to an average of 1,180 people/km2.
The country has undergone dramatic demographic changes over the past ten years The population growth rate has fallen rapidly, and fertility and mortality rates have decreased to levels comparable with more developed South-east Asian countries These changes are affecting traditional Vietnamese household structures as families grow smaller and the population grows older In addition, rapid economic development has stimulated population mobility, and sped up the process of urbanisation Viet Nam’s economic transition, coupled with an increase in the number of people entering the workforce, is also creating new and increased employment challenges (see Chapter for more on labour issues)
The ramifications of these changes are far-reaching Key population issues need to be addressed to take advantage of new opportunities and meet the emerging challenges
5.1 Population levels and trends
Although Viet Nam’s population continues to grow, its population growth rate, fertility rate and mortality rate have all substantially declined over the past decade After the Government failed to attain its population growth rate targets during the 1980s, it strongly intensified its efforts to support family planning programmes aimed at reducing fertility rates in the 1990s Since that time, the population growth rate has dramatically declined, as has the total fertility rate In contrast to its South-east Asian neighbours, Viet Nam has achieved these results quite rapidly, and with a relatively low level of economic development
Over the past decade, Viet Nam’s population grew from 64.4 million in 1989 to 76.3 million, according to the 1999 census (Figure 6)
While this population increase is substantial, the average annual growth rate during this period actually declined to 1.7% from the 2.1% average annual growth rate of the previous decade Over the next 25 years, the population growth rate is expected to continue its decline (Table 8)
Figure 6: Population of Viet Nam 1954-1999, millions
0 10 20 30 40 50 60 70 80 90
1954 1959 1964 1969 1974 1979 1984 1989 1994 1999
millions
(38)Table 8: Projected population and growth rate, 1994-2024
Source: General Statistical Office
The Government’s goal of replacement-level fertility should be reached within the next six years, and the total fertility rate is projected to fall to 1.7 by 2024 (Figure 7)
Source: General Statistical Office
Viet Nam has a low mortality rate relative to its level of economic development Infant and under-five mortality estimates for 1996 are equivalent to those of a more developed country like Thailand, and have been in decline over the past decade (Figure 8)
Source: General Statistical Office
Over the next ten years, life expectancy is expected to increase from its current level of 64.9 years for men and 69.6 years for women, to 65.8 years and 71.7 years respectively
5.2 Ramifications of current population trends
Shifting migration patterns and accelerating urbanisation
Following reunification in 1975, the Vietnamese Government instituted policies resulting in the internal migration Average annual growth rate, %
1.63 (1994-1999) 1.31 (1999-2004) 1.23 (2004-2009) 1.11 (2009-2014) 0.95 (2014-2019) 0.77 (2019-2024) Population, millions
70.8 76.8 82.0 87.2 92.2 96.7 100.5 Year
1994 1999 2004 2009 2014 2019 2024
Figure 7: Total fertilty rate (TFR), 1987 to 1992-96
2 2.5 3.5 4.5
1987 1988-89 1989-93 1992-96
TFR
TFR
Replacement fertility
Figure 8: Infant and child mortality, 1979-83 to 1992-96
0 20 40 60 80 100
1979-83 1984-88 1989-93 1992-96
Mortality rate per 1,000
(39)of almost five million people The majority of these people were moved from areas with high population density, such as the Red River Delta, to more sparsely populated areas in the Central Highlands and Mekong River Delta While this resettlement programme remains in effect, the number of persons being moved under this scheme is declining In fact, the Government is now acting to curb migration to certain rural areas due to negative effects on the environment
Migration from rural to urban areas has emerged as the dominant trend in the 1990s In 1989 the urban population accounted for just 19.4% of the total—approximately the same level as 20 years earlier By 1999 the rate of urbanisation had accelerated to 23.5% (GSO 1989, 1999) Since many migrants not register their residency with the Government, the true rate of urbanisation is likely to be even higher It is estimated that between 70,000 to 100,000 migrants move to Ho Chi Minh City each year, and approximately 40% of Ha Noi’s current growth is attributed to migration (UNDP 1998) Large numbers of temporary migrants who flow into Viet Nam’s cities each year further swell the urban population Government estimates indicate that the rate of urbanisation will continue to increase to 45% by 2020
Rural-urban migration is especially pronounced among young adults A survey undertaken in Ho Chi Minh City found that over two-thirds of migrants are between 15 and 29 years of age, and most are women (ibid) As the number of people in this age group rises and the difficulty of securing a job in rural areas increases, urban centres will continue to grow as young adults migrate to cities in search of employment
The rapid growth of cities, fuelled in large part by migration, is placing increased pressure on the urban living environment and infrastructure Since existing sanitary and service structures are inadequate to cope with current population levels, pollution levels will continue to rise Rapid urbanisation also threatens to have a negative impact on urban poverty, overcrowding and unemployment, which in turn may exacerbate crime, drug abuse and sexual exploitation, and generally undermine social stability
Ageing population
As fertility rates continue to decline, the population will become progressively older, with the average age increasing from its 1994 level of 21.5 years to 33.3 years in 2024 While the proportion of the over-60 population is not expected to change dramatically over the next 15 years, it is expected to increase to 12.7% of the population by 2024, as compared to 7.6% in 1994 (Figure 9)
Figure 9: Population age pyramids for Viet Nam, 1994 and 2024
1994
8 2
0 to 10 to 14 20 to 24 30 to 34 40 to 44 50 to 54 60 to 64 70 to 74 80 +
Age
% Male
(40)2024
8 2
0 to 10 to 14 20 to 24 30 to 34 40 to 44 50 to 54 60 to 64 70 to 74 80 +
Age
% Male
Female
Source: General Statistical Office
Given the growing gap in life expectancy between men and women, the increase in the number of single elderly women will be especially pronounced
Fewer school-aged children
As Viet Nam’s population ages, the percentage of its under-15 population will decline This provides the Government with an opportunity to increase its investment in improving the education of younger children and expand education opportunities at higher levels of education in light of the rapidly increasing number of adolescents in the population It is estimated that by 2014 Viet Nam will have four million less children to educate than 20 years earlier (Figure 10)
Source: General Statistical Office
Over 90% of children enrol in primary school, and the majority of children receive some secondary education (see chapter for further details) The growing number of people of university age in the next five years may temporarily hamper efforts to provide a greater proportion of adolescents with access to higher education However, this trend will be reversed by 2005, and by 2014 this section of the population will significantly decline Changing household structures
New population trends and rapidly changing household structures are transforming the traditional Vietnamese Figure 10: Population by age, %
0 10 20 30 40 50 60 70
1994 2004 2014 2024
%
(41)institution of the family Average household size is decreasing due to declining fertility rates, and increasing mobility of the young is separating family members and decreasing parental control over the life choices of their children Women are waiting longer to marry, and when they there is a growing trend away from traditional extended family structures in favour of the modern nuclear family model As the size of households shrinks, and the number of children living away from home grows, the probability of parents eventually living by themselves increases
5.4 Key issues
As Viet Nam progresses toward lower population growth, fertility and mortality rates, it must focus on the new problems and opportunities this transition presents, and the additional challenges that remain
Population policy
There is an immediate need to revisit and revise the 1993 national population policy in light of the emerging population issues highlighted above, and to further promote the implementation of the International Conference on Population and Development (ICPD) Programme of Action and the National Plan of Action for the Advancement of Women (see Annex I for summary of ICPD and Fourth World Conference on Women commitments and follow-up)
Changing family patterns
While the family remains a strong and important institution in Viet Nam, current demographic, economic and social forces necessitate that support be provided to assist families in maintaining their cohesiveness and sustaining their traditions
Urban planning and management of migration
Urbanisation of Viet Nam’s population has begun to accelerate over the past decade, and will speed up further as the economy industrialises The effective management of this process will require careful planning Systems of gathering and incorporating migration data into population and development models are needed In particular, care must be taken to ensure that migration does not place undue pressure on sensitive environments and communities, and urban planning needs to be further strengthened to ensure that cities are equipped to cope with the forecast population influx
Promote gender equality
Policies need to be reviewed to better address women’s concerns, especially to increase opportunities for employment and higher levels of education for women Investment in the education of women is required to empower them to make reproductive and other life choices
Planning for an older population
The rapid demographic changes under way in Viet Nam imply a significant increase in the number of elderly in the coming decades Mechanisms need to be developed to provide better care for the growing number of elderly in the future Assistance will be needed to help families care for their older members and, where necessary, to provide the elderly with alternative, non-familial sources of support
5.5 Recommendations for action
Complete the review and development of new population policies, and ensure widespread policy dissemination Establish a monitoring system for policy implementation throughout the country
Strengthen national awareness on population and development issues, through intense involvement of mass media and Government institutions, targeting in particular elected officials at the national, provincial and districts levels and key national training institutions
Continue to strengthen national capacity to integrate population variables into development planning Gather and incorporate migration and urbanisation data into population and development strategies
(42)urbanisation on urban infrastructure, such as transport, housing and sanitation Strengthen the capacity to minimise the negative effects of urbanisation, such as rising poverty and crime levels, drug abuse, sexual exploitation, overcrowded housing, unemployment and social instability
Ensure the provision of adequate resources for processing, analysing and disseminating data from the 1999 census Increase awareness of, and data availability on, key population issues by disseminating 1999 census findings to all levels of Government, donors and relevant agencies
(43)Agriculture 66% (71%)
Services 21% (17%)
Industry 13% (12%)
Chapter 6: Labour
Over the past decade, reforms instituted in pursuit of doi moi have inevitably impacted on the labour field, reshaping the structure of employment and incomes, and directing attention to the need to address social and labour issues in tandem with economic reform In addition, over and above their immediate implications for patterns and levels of employment, a number of policy changes—such as the shift from collective to family-based farming, the emphasis on industrialisation as the lynchpin of economic development, the rationalisation and equitisation of State-owned enterprises (SOEs) and the concomitant encouragement of the private sector and foreign investment—have revealed the shortcomings of existing labour market institutions in supporting the new policy direction and in creating the appropriate enabling environment for employment generation The need to review and renovate these institutions is now an essential part of the policy agenda
6.1 The employment profile
Employment in Viet Nam has to be seen within the context of the predominantly family-oriented nature of the economy In rural areas, where the vast majority of the labour force is still to be found, paid employees comprise only one-tenth of the labour force, the rest being family workers (Jamal & Jansen 1998) Even in urban areas, paid employees comprise under 50% of the labour force Notwithstanding this high proportion of unpaid labour, urban unemployment was officially recorded at 7.4% in 1999 and rural unemployment at 2.5% in 1998—both up significantly from 1996 Underemployment affected 29% of the rural labour force in 1998, up from 24% in 1996 While both unemployment and underemployment were reported to be slightly lower for women than for men in 1998, the latest MOLISA statistics suggest that this may be changing Results of a recent study in five cities indicates that the urban unemployment rate throughout the country is now 7.4% for men, and 8.3% for women Viet Nam’s labour force was estimated by MOLISA to be 42.5 million in 1999—with three-quarters in rural areas—and given current population trends it is expected to increase substantially over the next decade, pointing to the need for sustained employment creation policies
Figure 11: Sectoral share of employment, 1998 (1993 figure in brackets)
Source: General Statistical Office 1999
(44)Figure 12: Job creation by sector, 1993-98 (average 1993-98 growth rate per annum in brackets)
Source: World Bank estimates based on VLSS I & II
6.2 Employment generation
Open unemployment is now a feature of the Vietnamese economy and is set to grow in both urban and rural areas as the State sector sheds labour and the momentum of growth slows The fact that a significant proportion of the nominally “employed” are actually underemployed—with more than a quarter of total employment time estimated as surplus—is equally disturbing (Jamal & Jensen 1998) So too is the often related persistence of poverty, particularly in rural areas Acknowledgement of the link between poverty and underemployment is implicit in the employment creation components of the Government’s ongoing programmes for poverty alleviation and hunger eradication
At present, more than one million jobs would have to be created annually to absorb new entrants into the labour force, and a further 100,000 jobs are needed each year up to 2010 to clear the current unemployment backlog of one million workers Government targets for employment by 2010 include reducing the proportion of the labour force in rural areas to 60% from the current 80%, and reducing the corresponding proportion employed in agriculture to 40% (ILO/MOLISA 1999) The employment targets for industry and services require employment in these sectors to grow at 7-8% a year—a much higher rate than has been achieved in the recent past Even with the greater role assigned to non-agricultural employment, the rural sector will still need to create 70% of the new jobs Employment and income growth in agriculture, off-farm enterprises and services in rural areas will also continue to be critical for rapid poverty reduction in the future Several micro-level programmes exist for job creation, but the first imperative would be to put in place an enabling environment at the macro level that embraces all the major sectors of the economy, and accommodates and encourages the growth of the more labour-intensive sectors by removing the existing biases against them Such a framework should include: (i) a clearly defined set of policies and laws to consolidate and support the household-based economy; (ii) increased Government investment in infrastructure and social services in rural areas; and (iii) increased availability of micro-credit for farmers, rural non-farm enterprises and small-scale urban units
A major tool at the Government’s disposal in its efforts to address unemployment is the country’s system of 143 Centres for Employment Services (CES) run by MOLISA and other organisations, including the Viet Nam General Confederation of Labour (VGCL) and the Viet Nam Women’s Union These centres, which have their origin in the renovation policies of the late 1980s, should serve as important institutions for the more efficient operation of labour markets They are intended to provide a range of services, including labour market and occupational information, guidance and counselling services, training and retraining, self-employment promotion and the matching of job seekers with employers’ specifications They should also provide an important link between the country’s vocational training system and the labour market However, although the idea of such centres is widely accepted in Viet Nam and they are supported by policy guidelines and underpinned by legislation, they are not yet operationally strong institutions and serve a relatively small proportion of the unemployed Strengthening and developing these centres would make a useful contribution to the country’s employment programme, with resultant benefits for income generation and poverty alleviation
Industry 27% (4% pa)
Agriculture 17% (0.4% pa)
(45)6.3 The emergence of the private sector
The growth of the private sector has been significant, and the sector now comprises an estimated 24,000 registered private enterprises (which include private, limited liability and joint stock companies) and over two million household enterprises (Lamotte 1999) However, regulatory requirements and problems of access to capital, technology and markets have limited the potential of the formal private sector (Dao Quang Vinh 1999), and its overall contribution to employment growth is small in comparison with other Asian countries Nonetheless, the private sector’s contribution to Viet Nam’s economy (including agriculture, services and industry) is significant, at about 60% of GDP and 91% of total employment, as against the State sector’s 40% share of GDP and 9% share of employment In terms of sheer numbers and employment contribution, the household sector dominates the private sector, accounting for 89% of total employment (about 66% in farming and 34% in non-farming enterprises) and 33% of GDP (Lamotte 1999)
With a viable small-enterprise sector widely regarded as a potential source of productive and sustainable employment, the promotion of this sector is likely to loom large in the country’s plans to generate employment This is reflected in the 1998 National Target Programme on Employment (NTPE), which recognises that 80% of new employment opportunities must come from the non-State sector and places special emphasis on the development of small enterprises and self-employment, with the support of the National Fund for Employment Assistance While no direct impact assessment of the NTPE is available, 350,000 jobs are reportedly created annually by this programme (Thompson 1999)
6.4 Working women
Women comprise slightly more than half of the total labour force in Viet Nam, constituting around 51% of all workers in agriculture, 49% in services and 48% in industry and construction (SRV 1999) Changes in the labour market consequent upon the adoption of doi moi have significantly influenced women’s access to employment On the one hand, retrenchments due to the equitisation or closure of SOEs have affected more women than men, with estimates of women’s share of redundancies varying from 60% to 75% More positively, women have benefited from the new job opportunities being opened up by the development of the industrial zones and the growth of private-sector enterprises (Research Centre for Women Workers 1998a) It is also estimated that 27% of micro-enterprises or family-run businesses are headed by women (Pham Chi Lan 1996), with a 50/50 sex ratio of family members employed in these firms (Research Centre for Women Workers 1998a) However, in industrial enterprises with more than ten employees, this ratio drops to 43% of female to 57% of male workers, and only four in ten technically trained workers are women (Research Centre for Women Workers 1998b)
As in many other developing countries, women’s labour tends to be highly concentrated in industries such as textiles, garments and leather, and food processing in which, for the most part, women comprise the majority of unskilled workers Wage differentials also follow patterns common elsewhere A 1997/98 survey by the Ministry of Labour, Invalids and Social Affairs (MOLISA) found that women’s average income amounted to only 88% of the average income of men of the same skill level (Research Centre for Women Workers 1999a)
Nevertheless, Viet Nam has a strong commitment to gender equality and has ratified the ILO Conventions on Equal Remuneration 1951 (No 100) and Discrimination (Employment and Occupation) 1958 (No 111), both of which are reflected in the Labour Code promulgated in 1994 Measures to reinforce the practical application of these legal provisions have been written prominently into Viet Nam’s National Plan of Action for the Advancement of Women
6.5 Child labour
(46)Social Affairs (ILSSA) suggests that the problem may be increasing in the fast-growing informal sector, where children work as employees or trainees, or as seasonal migrants, doing any available jobs—in small businesses, serving in small restaurants and polishing shoes, for example (ILSSA 1999) Of greater concern is the possibility that they could be drawn into prostitution and cross-border trafficking
Poverty and disparities in economic development between different parts of the country are the main underlying reasons for parents to trade the long-term interests of their children for families’ short-term needs for survival Poor families are obliged to mobilise children to improve family subsistence and to reduce spending on education and training (ibid), and the high dropout rate of children in primary and lower secondary school could be an indicator of the existence and extent of child labour in the country Other push factors include disrupted family patterns and continued, though slowing, population growth—especially in rural areas Pull factors include the fact that children make docile, compliant and cheap workers, who can be easily hired, dismissed and rehired Among employers there is only a limited awareness of the problem of child labour, which occurs mostly in areas beyond the direct reach of labour law This is compounded by the shortage of labour inspectors and of inspection facilities to ensure that legislation is enforced While economic growth with equity will contribute to the gradual eradication of child labour, action-oriented research, an increase in public awareness and closer co-operation among relevant Government bodies and non-Governmental organisations (including workers’ and employers’ organisations) are more immediate measures that could contribute significantly to its reduction—particularly in its more excessive forms
Accurate analysis of the situation has been difficult, and up-to-date statistical information is urgently needed to determine the extent of the problem Existing labour force surveys will need to be adjusted if the child labour situation is to be adequately captured Gathering data on child prostitution, pornography and the sale and trafficking of women and children—which are serious criminal offences in Viet Nam and hidden from view—would require innovative research methodologies and interventions
As a signatory to the Convention on the Rights of the Child, Viet Nam has voiced its commitment to addressing the issue of child labour The Government is alert to the emergence of a child labour problem in the country, and wishes to eradicate it A Decree calling on MOLISA to develop a plan of action to combat child labour was issued in March 1997, and MOLISA has expressed its intention of following up on this In view of the importance of the issue, an action plan has also been developed with Viet Nam’s trade union movement
6.6 Vocational training
(47)6.7 Working conditions
According to surveys carried out by MOLISA, working conditions in Viet Nam require major improvements (MOLISA 1997a, 1999a) The majority of workers are exposed to a range of safety and health hazards including dust, toxic chemicals, noise, heat, vibration, outdated technology, poor lighting and ergonomics, and biological hazards Long working hours are also not uncommon—particularly in domestic private enterprises The most hazardous occupations are found in agriculture, construction, mining, fishing, and in the textile industry The number of fatal industrial accidents rose from 264 in 1995 to 362 in 1998 According to MOLISA, Ho Chi Minh City, Quang Ninh, Ha Noi and Dong Nai provinces accounted for a disproportionately large share of these fatalities and of the 2,914 other work-related injuries recorded that year Given that current reporting and notification mechanisms are inadequate, it is probable that these figures are much higher in reality In 1997, the Ministry of Health reported close to 630,000 cases of work-related diseases, the most serious of which is silicosis, with 9,000 cases recorded between 1978 and 1997 The Ministry estimated that 260,000 workers in more than 300 enterprises are exposed to high silica dust levels Serious efforts are being made to address this problem with donor support
Enforcement of occupational safety and health legislation is often limited to large SOEs and joint ventures Workers in domestic private enterprises and the informal sector are normally outside the compass of safety and health programmes, making awareness-raising among employers and workers through information and training activities and the strengthening of safety inspection services essential activities for the future
6.8 Pay reform
For SOEs, as well as for the public sector at large, the Government faces the looming challenge of pay reform In the trade-off between jobs and wages, Viet Nam has clearly favoured the former, with the consequence of low pay and resultant problems of low motivation, absenteeism, moonlighting and corruption Although a complicated allowance system has developed over the years as a means of addressing low pay, this has brought its own problems Pay is not related to performance in a transparent way, and is also not always obviously matched with the qualifications required for the job In addition, as allowances are not included in the calculation of pensions, the shift from employment to retirement brings with it a substantial decline in income The Government has recognised the urgent need to address these issues and a first step in reforming public-sector pay was announced at the recent seventh Party Plenum
6.9. Social safety nets
In Viet Nam, the term “social safety nets” is generally understood to mean a system built around social security, social protection, poverty alleviation and employment creation measures Both the Government’s priorities for the further implementation of doi moi reforms outlined in September 1997 and the National Report for the Ha Noi Meeting on the 20/20 Initiative (which sets the goal for 20% of both Government and ODA spending to be allocated to basic social services) identified the upgrading of various components of the system as an important goal
(48)The development or further strengthening of non-contributory schemes is an equally important objective, and crucial to addressing the needs of especially vulnerable groups that fall outside the scope of the social insurance system Viet Nam is already addressing this issue through follow-up activities to achieve the objectives outlined in its report to the World Summit for Social Development (see Annex I on Viet Nam’s follow-up to the World Conferences), and has undertaken major structural changes to its system of poverty reduction through the formulation and establishment of the Viet Nam Bank for the Poor in 1995, and its two national poverty alleviation programmes Other key components of the system of social safety nets include a Social Guarantee Fund for Regular Relief—which addresses the needs of groups incapable of self support and lacking family care—and the Contingency Fund for Pre-Harvest Starvation and Disaster Relief, which is also of crucial importance in natural disaster-prone Viet Nam (see Chapter 3, section for further details) In view of the breadth of these schemes and the potential for gaps in coverage, as well as areas of overlap, the support of the international community has been sought in assessing their functioning and impact on the intended target groups
6.10 Institutional capacity building
The transition from a centrally planned to a more market-oriented economy has seen Viet Nam’s private sector assume a larger role in economic growth and employment creation, and is bringing about fundamental changes in employment relations This, in turn, requires a rethinking of the respective roles and functions of the principal actors in the labour field—namely the State, employers and workers, and their respective organisations—and of the relationships between them However, while the Government has adopted a new approach to industrial relations that encourages greater responsibility on the part of employers and workers in the establishment of terms and conditions of work and in dispute resolution, a formal system of collective bargaining, supported by access to conciliation and arbitration, still lies in the future
Similarly, an institutional framework for tripartite dialogue between the Government (represented by MOLISA) and the workers’ and employers’ organisations has yet to be developed In view of the contribution that the workers’ and employers’ organisations—as important groups in society in terms of wealth creation—could make to the building of resilient labour market institutions, this is a fruitful area for future action In addition, as a tool for effective governance, social dialogue requires social partners that have the capacity and will to engage in the process responsibly, and the strength and flexibility to adjust to new demands and opportunities (ILO 1999) Strengthening the capacity of the three principal parties—MOLISA, the VGCL and the VCCI—in a wide spectrum of labour market issues would be a necessary condition for active and constructive engagement, as would an enabling environment in which the contributions of the social partners was solicited and valued 6.11 Key issues
Employment generation
Whether Viet Nam can meet the challenge of ensuring enough jobs for a growing labour force will depend on action on several fronts In the first instance, it will require the development of sound macroeconomic policies that promote both high economic growth and sustained demand for workers Currently, insufficient emphasis is being placed on providing conducive conditions that will encourage the types of enterprise with the greatest employment generation potential—namely rural non-farm enterprises, small-scale urban enterprises and self-employment Constraints to employment expansion, particularly in the private (industrial) sector, are recognised, but need to be addressed in a systematic way Labour market institutions, including the Centres for Employment Services, are still not sufficiently supportive of the needs of a market economy, and need to be overhauled or upgraded They possess insufficient capacity and resources to effectively match job-seekers with appropriate vacancies, and to link vocational training to labour market needs
Human resources development
(49)and greater attention needs to be paid to the longer-term employability of workers, as well as to the provision of immediately marketable skills In this context, there is insufficient appreciation at the policy level of the potential contribution employers and their organisations could make, in view of their knowledge of likely labour market developments and future skill requirements
Gender inequality in employment
Women still lack the equal employment and training opportunities that would empower them to attain a greater level of independence and make an optimum contribution to society Equal opportunity legislation is insufficiently enforced, particularly with regard to equal access to training, jobs and opportunities for career development and to equal pay for work of equal value In view of the predominance of the household economy, and women’s roles within it, greater attention to improving women’s access to key resources, micro-entrepreneurship training and credit programmes would pay dividends
Child labour
There appears to be some uncertainty concerning the extent of child labour in Viet Nam While a 1997 Decree calling for an action plan to address the issue and preliminary national research findings suggest that the problem is surfacing in the country, further analysis and statistical data are necessary to determine its gravity and to identify the sectors in which children are working Such data collection could form part of the above mentioned action plan, which should be aimed at increasing public and employers’ awareness of the issue Close co-operation between the relevant Government bodies and non-Governmental organisations would be necessary to ensure the successful implementation of the action plan
Social protection and social safety nets
While the adaptation of the social protection regime to the needs of a market economy has been under way for some time, this remains an area in which more work needs to be done in the context of the planned Social Security Act Training—particularly on social insurance principles and governance—and awareness-raising at the policy-making level are immediate priorities Social safety nets—which are crucial to addressing the needs of especially vulnerable groups that fall outside the scope of the formal system—have already been set up, but the efficiency with which they function and their ability to reach those most in need of these services need to be evaluated with a view to identifying and addressing their gaps and weaknesses
Working conditions and occupational safety and health
In view of the growing importance of the domestic private sector and more particularly of the informal parts of this sector, it will be necessary to pay more attention to monitoring working conditions and occupational safety and health within it While the extension of best practice to this sector is an imperative, and might be achieved in part through awareness-raising among employers and workers, the concomitant strengthening of the safety inspection services may be more difficult to achieve, and is an issue that would benefit from the assistance of the donor community
Institutional weaknesses
The transition to a more market-oriented economy implies a corresponding transition in the roles of the State and the social partners in the labour field, and a fundamental shift in their relationships with one another It also requires the creation of, and familiarity with, the institutions and legal framework within which industrial relations take place, and the capacity to use the system to their mutual advantage The smooth functioning of the labour market is contingent upon these conditions being met, and the institutional weaknesses of the three actors— MOLISA, the Viet Nam General Confederation of Labour and the Viet Nam Chamber of Commerce—need to be identified and addressed if they are to be successful in confronting the challenges of a market-based economy Inadequate labour statistics
(50)• improve communication between users and producers of statistics, thereby promoting the more informed use of statistics and improved awareness of statistical needs;
• introduce separate surveys (or modules attached to the Labour Force Surveys) to measure the activities of children and youth, and detailed measurement of the informal sector;
• introduce a programme of regular establishment-based surveys of employment, wages and related labour statistics (for example vacancies and labour turnover); and
• improve the statistics derived from labour records and the administrative systems from which these records are drawn Possible data sources to be considered in this regard include the system of labour inspections, the social security system and the system of employment service centres
6.12 Recommendations
Devise a macro-level labour and employment generation strategy encompassing the following: • a clearly defined, coherent set of policies and laws to support the household-based economy; • increased investment in infrastructure and social services;
• strengthening of micro-credit and training for farmers, rural non-farm enterprises, small-scale urban enterprises and the self-employed;
• promotion of private sector organisations (including associations of micro-entrepreneurs), enabling them to play a greater role in designing and delivering the requisite support programmes for small enterprise development;
• improvement of human resources development strategies which engender both immediately marketable skills and the knowledge and adaptability to ensure longer-term employability; and
• promotion of economic sectors with employment generation potential
Improve the functioning of the labour market by improving information flows needed to match job seekers with employers, modernising the Centres for Employment Services and improving their service to employers and job-seekers Greater co-ordination between the sub-systems of centres (run by different Government and non-Governmental bodies) would facilitate the achievement of the objectives in the National Target Programme for Employment Generation
Improve and expand the vocational training system Employers’ and workers’ organisations should be involved in the identification of national and regional training needs to ensure coherence between employment and training policies and labour market needs
Upgrade occupational health and safety standards, especially in the domestic private sector, through the extension of best practice and awareness-raising among employers and workers, and by strengthening the safety inspection services Greater co-ordination of the three existing inspectorates (safety, health and general inspection) should also be a priority
Extend social protection for workers in the formal and informal sectors Improve the effectiveness of the existing social safety nets by:
• better integration of the constituent programmes; • improved monitoring and evaluation;
• strengthening of early warning systems to identify areas that require special targeting; • greater programme flexibility; and
• systematic guidelines on the identification of target groups
Improve the position of working women by enforcing equal opportunity legislation, improving women’s access to and control over the allocation of key resources, and targeting them for micro-entrepreneurship training and credit programmes Create associations of women entrepreneurs to encourage mutual self-help and facilitate advocacy to promote gender-sensitised policies and programmes
(51)Strengthen the institutional capacity of MOLISA, the Viet Nam General Confederation of Labour, and the Viet Nam Chamber of Commerce, to enable these bodies to meet the challenges and opportunities of a market-based economy For MOLISA this should include strengthening its labour administration functions and its capacity to perform its roles in advisory services, inspection, enforcement and conciliation, and dispute settlement Employers’ and workers’ organisations must further develop their capacity to contribute to economic policy formulation, widen the range of services provided to their membership and develop their capacity in the area of collective bargaining and social dialogue
(52)Chapter 7: Health and Nutrition
Viet Nam’s vital health indicators are good compared with countries at a comparable level of income Life expectancy, for instance, is 11 years longer for Vietnamese people than would be expected given the country’s level of economic development (Dahlgren 1999)
However, a number of serious health problems persist in Viet Nam, and some health indicators are still poor Malnutrition is extremely high—particularly for children, 39% of whom are malnourished (NIN & MOH 1998a) Viet Nam’s infant and maternal mortality rates, though comparable with other countries in the region, are also still high The former is around 37/1,000 live births and the latter is officially 100/100,000 live births, although WHO estimates a significantly higher maternal mortality rate of 160/100,000 live births (UNICEF 1999) Viet Nam’s abortion rate is also one of the highest in the world; in 1998 one in three pregnancies ended in abortion (MOH 1999) Furthermore, despite the Government’s emphasis on equality and a nominally impressive coverage of health care services, considerable disparities in health status still exist between different geographical regions The Central Highlands and the Northern Mountainous region have an infant mortality rate of 56/1,000 and the latter region has a maternal mortality rate four times higher than in the lowlands In general, health indicators in the Mekong River Delta, the Central Highlands and the Northern Mountainous region are considerably worse than in the rest of the country These regions have large ethnic minority populations and are also characterised by a significantly lower level of economic development, less formal education, and poorer nutrition than the other regions, with some areas experiencing food shortages for up to four months a year
7.1 Major causes of morbidity and mortality
Viet Nam is currently facing a double disease burden While infectious, vector-borne and communicable diseases still account for a large (though falling) percentage of morbidity and mortality—especially among children—the incidence of non-communicable diseases is also rising quickly Regarding the former, of particular concern are a number of new and re-emerging diseases such as tuberculosis, HIV/AIDS, dengue fever and Japanese encephalitis Malaria remains a serious public health problem in mountainous and ethnic minority areas, exacerbated by increased drug and insecticide resistance
Source: Ministry of Health 1998a
As Viet Nam continues its efforts to control infectious diseases, non-communicable diseases—such as cancer and cardiovascular disease—are steadily increasing, and such diseases have now become the leading cause of morbidity and mortality in Viet Nam Largely as a result of the increase in traffic density and poor respect for the traffic code, accidents are also set to overtake infectious diseases as the second most common cause of mortality— accounting for 21.6% of total mortality in 1997, up from just 2.2% in 1976 (Figure 13)
Child health
Peri-natal conditions, such as birth asphyxia, birth trauma, neo-natal tetanus, pneumonia and congenital diseases Figure 13: Causes of mortality, 1976-97
0% 10% 20% 30% 40% 50% 60%
1976 1986 1997
Accidents
(53)account for the largest share of under-five mortality, closely followed by acute respiratory infections Malaria is still an important cause of child morbidity and mortality in mountainous and remote areas
Although disease and poor hygiene are important contributing factors to child mortality, malnutrition remains a major underlying cause Notwithstanding a gradual improvement over the past ten years, all nutrition indicators show that malnutrition is still a serious health concern—despite Viet Nam being a major rice exporter The main causes of malnutrition are, above all, poor feeding practices and, in remote areas, household food insecurity and seasonal hunger, with poverty as a main underlying cause The implications of low calorie, protein and micro-nutrient intake are severe In 1998 39% of children under five were underweight and 34% were stunted (NIN & MOH 1998a) The figure for stunting as a result of malnutrition rises to as high as 47% of children in rural areas—nearly three times the percentage in Viet Nam’s cities (NIN & MOH 1998a) Micro-nutrient deficiencies (vitamin A, iron and iodine) contribute to poor child nutrition and high levels of childhood anaemia, and also have a negative impact on physical growth as well as cognitive development
Adolescent health
Adolescents are at high risk of unwanted pregnancy, maternal morbidity and mortality, sexually transmitted infections (STIs) including HIV/AIDS, accidents and other health-related problems, such as illicit drug and alcohol abuse Young people have very limited access to information and services on sexual and reproductive health, including family planning Nationally, about 15% of all births are by women aged less than 19 (MOH 1998b) and it is estimated that unmarried women (most of whom are adolescents) account for 30% of total abortions (NCPFP 1997) By August 1999 around 50% of all new HIV infections were occurring among those under 30 (up from 45% at end-1998), and almost 8% of reported cases involved those under 20 (MOH) Drug abuse is another growing health concern, particularly among young adults The total number of registered drug abusers increased by 28% between 1998 and 1999, with 76,000 registered in the former year and 97,000 in the latter The vast majority (70%) of those registered as drug addicts in 1999 are under 30, including 4,000 students and school children
7.2 Reproductive health
Viet Nam has reasonable coverage of family planning services However, availability and accessibility of maternal health care services ranges from as low as 20% in remote areas to more than 90% in urban areas (MOH 1998b) Other reproductive health services are virtually non-existent at the local level, the overall utilisation of reproductive health services is low and the service quality is well below optimum The fact that MOH’s current health strategy does not contain any reference to reproductive health, nor any reproductive health-related indicators in its list of basic health indicators, is a matter of concern
Contraceptive use in Viet Nam is nominally high at 75%, and has been on the rise for the last ten years However, promotion of contraceptive use is oriented primarily towards married women, and around 20% of those using family planning methods still rely on traditional and less reliable methods (NCFPF 1997) Providers have a preference for intra-uterine devices (IUDs) and there is still limited choice of other methods Despite the apparently extensive use of contraceptives, as many as one-third of pregnancies ended in abortion in 1998 (MOH 1999)
As mentioned earlier, estimates of Viet Nam’s maternal mortality rate vary considerably, up to a high 160/ 100,000 live births The major underlying causes of maternal mortality are related to poor nutrition, infection and abortion, with the principal immediate causes of maternal death highlighted in Figure 14 High maternal mortality during birth also reflects poor maternal health care
(54)Figure 14: Main causes of maternal mortality, 1997
13%
13% 14%
14%
46%
Eclampsia Rupture of uterus Haemorrhage Sepsis Others
7.3 Environmental health
Official surveys suggest that only 47% of the urban population and 42% of the rural population have access to safe water supply, and only 43% and 15% respectively to means of safe excreta disposal (TBMC 1996) A number of water and sanitation campaigns have been launched by the Government over the past few decades, leading to the construction of millions of latrines, bathrooms and shallow wells Rural water supply projects under the Ministry of Agriculture and Rural Development have also led to the construction of nearly 190,000 water supply facilities serving about 24 million rural inhabitants In many cases, however, although water and sanitation facilities may exist they are not necessarily used hygienically Continued high morbidity from water-borne and diarrhoeal diseases underlines the urgent need to improve both access to safe drinking water and sanitation facilities, and to educate people on hygienic use of these facilities
Food safety is also a problem Food safety regulation has been developed but is not yet widely implemented Health inspection services are available but require strengthening Of particular concern is food sold by street vendors Recent developments in environmental health have focused on social mobilisation and the development of integrated programmes in line with the concepts of “Healthy Cities” and “Healthy Markets”
7.4 Future trends
There have been significant lifestyle changes in Viet Nam over the last decade, including a greater reliance on motor vehicles, increased use of tobacco, alcohol and illicit drugs, and a growing number of imported foods leading to a rise in dietary fat and salt intake The resultant increase in unhealthy practices and conditions such as alcohol and drug abuse, obesity, hypertension, lack of exercise, dietary changes and smoking—WHO estimates that 73% of men and 4% of women smoke—together with the growth of environmental health hazards, such as pollution, have led to a significant rise in non-communicable diseases such as cardiovascular disease, chronic pulmonary disease, cancer and diabetes This trend is set to continue
Predicted demographic changes will also have an impact on health status and the demand for health services in the future The population over 40 years old is predicted to grow by 27.6% by 2009, and the under-five population will also remain high for some time This both suggests that non-communicable diseases will place an increasing burden on the health system, and that child malnutrition, and morbidity and mortality resulting from infectious diseases will continue to be high
The growth of the sex industry and intravenous drug use has resulted in a large increase in HIV infections As mentioned, the number of officially reported cases by mid-1999 was 14,800 (UNAIDS 1999), and HIV infections have been reported in all 61 provinces However, reported figures significantly understate the scale of the problem, and by end-2000 the Vietnamese authorities estimate that 160,000 people will be infected with HIV Currently 65% of HIV infections reported are associated with intravenous drug use, but heterosexual transmission among young people is increasing There is no data on the incidence of hepatitis B or C among drug users, but
(55)the incidence of hepatitis B at least is likely to be high There is a reserved attitude toward harm-reduction activities and a suppressive approach in response to the increase in drug abuse and prostitution This approach threatens to drive at-risk groups to set up underground operations, thereby increasing the risk of continued unsafe practices which transmit HIV, STIs and hepatitis
Mental health is another growing concern in Viet Nam Currently most mental health services are hospital-based, and focused on treatment of the severely ill With the recent influx of amphetamine-type substances into Viet Nam, a substantial additional burden on mental health services of treating the psychiatric/psychological effect of abuse of these drugs is to be expected However, hospital-based services are inappropriate to deal with many mental illnesses, such as depression leading to suicide There is a need to expand the number and quality of community-based mental health centres offering psychosocial rehabilitation services
7.5 Health policy
Over the past two decades a vast volume of literature points to weak health policy development The Strategic Orientation for People’s Health Care and Protection (1996-2000) and Viet Nam’s National Drug Policy, which is the primary policy document for health sector development, does not provide a clear description of purpose nor clear measures to address issues of inequity, quality, funding and other issues identified as problems Consequently, efforts to address these issues have not been particularly effective
Existing health information systems also need considerable improvement in order to provide the necessary range and quality of data to develop appropriate health strategies and policies Data that are already available need to be fed much more systematically into health plans at the central and local levels However, the reliability of even routine data continues to be questionable For instance, the 1998 Extended Programme on Immunisation (EPI) survey highlighted a significant discrepancy between reported and surveyed data on EPI coverage This was particularly the case for disadvantaged areas where the percentage of fully immunised children was officially reported at 95%, but a survey of one province revealed only 57% coverage (MOH 1998c) As well as highlighting problems with official data collection, such discrepancies suggest that in disadvantaged provinces at least the coverage of preventive health programmes is not as high as reported
The Government is currently undertaking a comprehensive health sector review in collaboration with the donor community This review provides an opportunity for intentions to be translated into clear policies through a review of the national strategic orientation and the formulation of an investment plan for the sector
7.6 National health programmes
In order to address key health problems, Viet Nam has developed a number of vertical health programmes and projects, often with donor funding These programmes have structures running from the central to the district level, are often led by a strong National Institute and receive substantial financial support The programmes and projects cover the following health issues:
HIV/AIDS Malaria
Goitre Leprosy
Tuberculosis Expanded Programme on Immunisation (EPI) Prevention and Control of Malnutrition Child Malnutrition Control
Dengue fever Mental health
Nutrition Micro-nutrient control (Vit.A/iron/iodine deficiency) Acute Respiratory Infection (ARI) Control of Diarrhoeal Diseases (CDD)
(56)Some vertical programmes have been successful in reducing morbidity and mortality from disease For example, between 1995 and 1997, morbidity resulting from malaria decreased from 900 to 580 per 100,000 people, and mortality from 0.5 to 0.2 per 100,000 people (MOH 1998a)
In addition, the coverage of some child preventive health programmes is relatively high Almost all children under one year are reported to be fully immunised against the six EPI target diseases (poliomyelitis, tuberculosis, tetanus, measles, diphtheria and pertussis), and have received at least two doses of Vitamin A before 36 months (MOH 1998c) By 1998 the Child Malnutrition Control programme was being implemented in 30% of communes The performance of these preventive programmes has resulted in a decrease in the malnutrition rate and the incidence of EPI diseases, such as poliomyelitis (zero cases in 1998) and measles (down from 82,231 cases in 1985 to 11,690 cases in 1998) (ibid) However, the coverage of many other programmes is low It is estimated, for instance, that although acute respiratory infection (ARI) is the leading single cause of under-five mortality in Viet Nam, only 19% of suspected ARI cases reach the health system at commune level (MOH 1998d) (Table 9) Table 9: Performance of child health services
Sources: a MOH 1998c; b NIN & MOH 1998a; c GSO 1997; d MOH 1998d
Although some of the strong, vertical structures developed to manage national health programmes have produced results, a number of problems associated with these vertical programmes include:
• High cost. The national malaria programme, for example, accounts for 2% of the health budget
• Weak co-ordination between different departments in charge of these programmes leads to frequent duplication and overlapping of activities, particularly in training, supervision and monitoring And although many programmes have related components, there is minimal integration between programmes when it comes to implementation There is even direct competition between some of the programmes, to the clear detriment of the intended beneficiaries
• Centralisation Vertical national programmes are centrally managed, with little involvement of local levels in decision-making Communities are not adequately involved in planning, implementation, monitoring and evaluation of basic health services The non-involvement of local levels in planning also raises concerns about the cost-effectiveness of the programmes
• Low utilisation Despite the potentially wide coverage of vertically implemented programmes, the utilisation, and consequently the coverage, of some programmes is very low
• Lack of flexibility Vertical programmes can be inflexible and unresponsive to emerging needs For example, the incidence of dengue fever is rising, with morbidity increasing from 56/100,000 in 1990 to 301/100,000 in 1998 (MOH 1999), but the national programme to combat dengue fever is not developing in proportion to the rising impact of dengue fever on health
• Unsustainable funding sources. Many vertical health programmes are over-dependent on ODA resources, which raises questions about their financial sustainability
To improve the efficiency and effectiveness of national health programmes, there is a clear need for a more integrated approach to health programming as well as decentralisation of programme development and management One potentially integrated programme—the Integrated Management of Child Illness—already exists, but a concerted effort is required to implement a transition from vertical health programmes to programmes which are integrated into the mainstream health service A number of integrated approaches for providing
Programme Indicator Score, %
(57)quality care at affordable cost, and with active community participation, are currently being piloted at the district and commune level Such innovative interventions should be carefully evaluated and, if considered useful, be expanded as national policy
7.7 Structure of the health care system
Viet Nam has a well-developed public sector health infrastructure, and private sector services have grown rapidly in recent years
Public-sector health services
At the central level, the Ministry of Health (MOH) formulates health policies and issues instructions on technical questions of implementation It directly manages a number of specialised institutes that provide tertiary and referral services in various specialities, as well as national medical, pharmaceutical and public health schools The MOH is also responsible for the management of all central hospitals, national drug and medical equipment producers
The provincial-level service is accountable to the MOH and is managed by a health service bureau responsible for preventive medicine centres, provincial-level medical training schools, local production of medical supplies and provincial hospitals Each of the 61 provincial health service bureaus covers an average population of around 1.2 million, and includes between and 12 districts
The district-level service manages primary and first-level referral curative services, preventive services including preventive medicine brigades, district hospitals and inter-communal polyclinics The role of polyclinics is to provide supervision, technical and referral services and training to the commune health stations Each district covers a population of around 100,000-150,000 and includes between 10 and 20 communes
The commune-level service consists ofcommune health centres Each centre covers an average population of 6,000 and is in charge of providing primary health care services, including maternal health care
Traditional medicine is part of the State system managed by the MOH, and is accepted as an alternative means of treatment Official statistics put the number of traditional medical practitioners at 2,967, although this figure is likely to be underestimated as many practitioners are not officially registered
Private-sector health services
The number of private health providers has almost doubled since 1996 This growth is less visible in terms of health clinics than in the number of private pharmacies, which grew from an estimated 2,000 in 1990 to around 7,500 by end-1996
The development of private health services has taken place in the absence of clear policy guidelines or regulation There are no referral guidelines for patients from the private to public sector, nor any integration of the private sector into the national health service Private providers have also yet to establish contracts to access funding through health insurance
Private health services generally make use of public-sector health facilities, and while private practices contribute considerably to the private income of health professionals, the use of public facilities for this purpose offers no financial return for the public health system The rapid, unregulated expansion of the private sector has also resulted in reports of a compromise of the medical ethics of some practitioners
7.8 Health care access and utilisation
(58)under-represented in health insurance schemes, have more difficulties in accessing public health services, access poorer quality health services and find these services less acceptable to their needs and values than richer groups Over the past five years the rich have captured a disproportionately high share of Government subsidies to health care in hospitals
There is also evidence of general under-utilisation of community health services Although official statistics state that in 1998 all but 545 communes (5% of the total) had community health centres (MOH 1999), in 12 districts implementing community-based monitoring, the utilisation of curative services in 1998 was only 40% (MOH & UNICEF 1999) Availability and accessibility of maternal health care services is as low as 20% in some remote areas Nation-wide only 56% of pregnant women registered for prenatal care in 1997, and antenatal check-ups averaged just 1.6 per pregnancy (MOH 1998b) Even where health care services are available, those with the most health needs—ethnic minorities, those living in remote areas and the poor—either lack access to or are making insufficient use of them
There remains insufficient investment in, access to and quality of primary health care services These services are important for health promotion, early detection of health problems, early treatment, community awareness of health issues, environmental health and safety, and community participation in health services
7.9 Quality of health care services
Literature on the quality of health services focuses on the need to modernise equipment, overcrowding in hospitals, poor staffing levels and medical ethics, and insufficient or inadequate hospitals and equipment There is clearly a need for modernising the health infrastructure, but it needs to be carefully planned to ensure the fair and rational geographical distribution of facilities A system of technical assessment needs to be developed to prevent the costly proliferation of high-tech and inappropriate equipment
The quality of health service delivery also needs to be reviewed There is little data available, but in terms of maternal health care services, for example, findings from 12 districts implementing community-based safe motherhood activities show that only 23% of women had a “safe delivery”, including adequate ante-natal care, assisted delivery and post-natal care (MOH & UNICEF 1999) Moreover, the fact that infection continues to be a major cause of maternal mortality raises serious concerns regarding the technical skills and quality of delivery care being offered by health personnel
7.10 Essential drugs
Essential drugs are available through both the public and private sector Viet Nam has laid the foundation for its pharmaceutical sector by establishing pharmaceutical factories in almost every province Most of the drugs Viet Nam requires, and 58% of all EPI vaccines, are locally produced
A Revolving Drug Fund programme has been implemented in more than 40% of communes Almost 90% of communes implementing the programme are able to recover the cost of drugs through user fees (Narula 1997) However, there is mixed evidence on the extent to which these revolving funds have improved drug availability In addition, the availability of trained staff for drug management at the commune level is very low; at present, only 7.3% of all pharmacists are stationed in communes (ibid)
Self-medication is very common in Viet Nam, although knowledge of safe drug use is limited There is a tendency for poor people to self-treat with drugs, rather than visit a health worker Self-medication is frequently associated with inappropriate drug use, and data on antibiotic abuse reveals a high rate of antibiotic resistance
7.11 Human resources
(59)reference to the overall training system There are no national standards for professional practice, and no system to assure the public of the scope and quality of service they can expect from health professionals The ratio of doctors to nurses is 1:2—one of the highest in the region—and suggests an inappropriate use of the health workforce A well-trained nurse is estimated to be able to effectively provide for up to 80% of the health needs presented in health facilities, and at less cost Consideration needs to be given to the cost effectiveness of maintaining this ratio of doctors to nurses: strengthening the nursing workforce to meet future needs may be an effective and efficient option for Viet Nam Another matter for concern is the decline in the number of doctors, midwives and nurses at the commune level since doi moi reforms were introduced, resulting in a shortfall of health workers—particularly preventive health workers—in rural areas
The health system continues to be managed centrally, even though Government policy is to decentralise management Most managers are medical doctors, and few have had adequate training in general management Decentralisation needs to be linked with improved management at all levels
7.12 Health care finance
Financing for the health sector comes from central and local revenues, private payment for medicine and services, ODA and compulsory contributions by employers and employees to mandatory health insurance
Public spending on health has increased in real terms since 1991 in terms of per capita spending, share of total Government expenditure, and as a percentage of GDP In 1997 the health budget was 5.6% of the total budget, and represented 1.2% of GDP However, with a growing population and the increased demand for health services that has accompanied economic growth, there is scope for an increase in public funding To reach the World Bank’s recommendation for low-income countries for financing an essential package of health services, a further VND660 billion is required annually
Although the Government is the major provider of health services, it is not the dominant funder (Figure 15) The bulk of local government health expenditure (70%) is spent on hospital services, and funding from health insurance and user charges is also spent on curative services This means that although the share of central Government expenditure on curative care has declined sharply in recent years, from more than 80% in 1993 to 33% in 1997, the ratio of public spending on curative interventions to that on preventive activities is still high, at 5.2:1 in 1997 This is much higher than the ratio of 2:1 recommended by the World Bank An ageing population and the increase in non-communicable diseases and lifestyle-related health issues also suggest that there is a need to shift some public expenditure away from curative (hospital) care towards preventive and primary health care
Figure 15: Funding sources for health expenditure
Funding sources for Funding sources for Government’s health services, 1997 share of health expenditure, 1997
Source: Deolalikar 1999
Public (tax-based) funding tends to be allocated to better-off income groups and provinces The current system of allocating funds to districts (according to bed numbers) further perpetuates the historical inequity between
1%
19% 80%
Donors Government Households
28%
55% 7%
10%
(60)districts in terms of health care facilities A formula to ensure a fair allocation of Government funds, which takes into account population and health needs, has yet to be developed
To maintain equitable access to health care, but faced with the problem of erosion of public funds for health, the Government has introduced mandatory and voluntary insurance schemes In 1992 the Council of Ministers approved a Decree on Health Insurance, which required all Government administrative workers and industrial, salaried workers to take part in compulsory health insurance programmes Since then, efforts have been made to gradually expand enrolment By 1998 the number of insured persons reached almost 10 million (MOH 1999) In addition, other groups are covered by voluntary insurance programmes However, the schemes are facing a number of challenges, including difficulties in expanding coverage, cost escalation and lack of redistribution of revenues to poorer provinces User charges were institutionalised in the public sector in 1989, and implementation has been variable across the country In addition there are various informal health care payments made by the population, the scale of which is unknown Out-of-pocket expenditures in the private sector go primarily to drugs
The vast majority of ODA to basic social services (71%) goes to health care (SRV 1998) ODA funding to the health sector is focusing increasingly on developing policy and managerial capacities Poor co-ordination of aid remains a major concern
7.13 Key issues Health sector funding
Overall public finance levels for health are low in Viet Nam by international standards, resulting in an underfunded health care system In addition, the distribution of total public funds for health is becoming increasingly uneven, with large disparities between provinces Private spending on health, which at 80% of total spending is very important, is mainly concentrated on pharmaceuticals, and current spending patterns are not very efficient due to poor prescribing practices, overuse of drugs, etc Health insurance could play an important role in raising revenue in the future, but is currently beset by major problems
Curative services versus primary health care
Health data suggest that non-communicable diseases, infectious diseases among children and lifestyle health problems are Viet Nam’s health issues of the future Primary health care and preventive measures are the key to addressing these issues, but there remains an over-concentration of resources allocated to curative services There is also a need to support greater investment in primary health care with an expansion of health education to teach healthy practices and behaviours
Policy development, regulation and management
Capacity for strategic thinking, planning and policy-making all need to be strengthened, particularly at the central level There are several areas in which there is a need for clear, effective policy and regulation The role of the private sector in the national health system is still not clear Operating rules of private practitioners, and the supervision and monitoring of quality of care provided by this sector, need to be clarified The role of the MOH and the private sector in relation to the development of the pharmaceutical and medical equipment industry needs to be defined There is a lack of regulation of both the public and private sectors to ensure safety to health service users and protection to providers, as well as a rational distribution of resources There is also a need to strengthen the quality and efficiency of health services through improved management at all levels
Health programmes
The frequently low efficiency and effectiveness of vertically integrated programmes suggest that a more integrated approach may be more appropriate to tackle a number of health issues There is a need to decentralise the design and implementation of health programmes and integrate them into the mainstream health system, along with a number of issues—such as maternal health—which are not currently addressed by national health programmes
Health inequalities
(61)introduction of market-oriented reforms in the health sector has been increased inequalities between rich and poor in access to public health care Gender inequality in treatment also means that women tend to receive poor care and support in their reproductive and child care role Barriers to utilisation include geography, language and culture (especially for ethnic minorities), attitudes and gender of health professionals, cumbersome and bureaucratic procedures, poor equipment and lack of skilled staff in some health facilities, long waiting times, and high user charges These factors are linked to an increased use of self-treatment and self-medication among these disadvantaged groups In addition to improving equality of access to health care services, inequities in resource allocation and quality of service also need to be addressed
Specific health issues
The persistence of child malnutrition, the high abortion rate and infant and maternal mortality rates, low access to safe water and sanitation, the rapid increase in HIV infection, growing illicit drug and tobacco use, the rapid increase in accident-related deaths, and the persistence of some diseases such as malaria, tuberculosis and dengue fever, all require priority attention
7.14 Recommendations for action Policy directives for institutional reforms
Strengthen the institutional capacities of MOH and agencies that have influence over health, with particular emphasis on building planning and policymaking capacity at all levels, to support the effective leadership and clear direction of the health sector reform process
Develop policies, laws, guidelines and regulations to govern private sector expansion Health sector funding
Allocate additional public resources to health, and direct them to areas of greatest need
Identify mechanisms to widen the coverage of Vietnamese health insurance to poorer groups and improve its performance
Influence private spending on health through public information, training of health personnel—including pharmacists—and setting clear rules and regulations
Health information system
Revisit the health information system and adapt it to changing needs This will involve, inter alia, obtaining epidemiological knowledge to be applied to preventive and curative activities, to the development of health strategies and to health education of the population
Services delivery
Analyse reasons for the low utilisation of health services, in particular community health services, and develop measures to improve quality of and access to services (including redistribution of staff and facilities, improvement of technical skills and appropriate equipment, pharmaceuticals and contraceptives)
Invest in primary health care services and preventive measures, and expand health education to teach healthy practices and behaviours
Strengthen the village health worker network in order to increase economic and geographic access to, and utilisation of, quality basic health care in remote and disadvantaged areas
Integrate the vertical programmes into the mainstream health system and give priority in doing so to the most pressing current and emerging health problems, in particular malnutrition, reproductive and maternal health, inadequate access to water and sanitation, HIV/AIDS, tobacco use, accidents, tuberculosis and dengue fever Human resources and training
Develop a human resources development plan for the health sector, with emphasis on increasing the number of nurses and health workers in remote and rural areas
(62)Chapter 8: Basic education
Basic education is defined as early child care, pre-primary and primary education for all children up to 14 years old, as well as adult literacy education for youth and adults over 15 years of age
The high level of participation in primary school and Viet Nam’s impressive overall literacy rate of 92% (MOET 1999b) are supported by a widespread network of day-care centres (DCCs) and kindergartens, which cater for the physical, psycho-social and cognitive development of young children
The first DCCs and kindergartens in Viet Nam were established in 1956 Over the years State subsidies of early childhood care (ECC) gave rise to a nation-wide network of DCCs and kindergartens However, Viet Nam’s post-1986 economic and agricultural reforms have had a dramatic effect on ECC services—particularly in rural areas, and on the number and utilisation of DCCs The number of children aged between three months to three years enrolled in DCCs has dropped from 1.85 million in 1986-87, or 27% of the total, to just 444,000, or 10%, in 1997-98 This decline can be explained in part by the large reduction in Government subsidies for the operation and maintenance of DCCs Rural and poor communities have been particularly hard hit since it is generally more difficult for them to shoulder the financial burden of sending children to DCCs As a result, a disproportionate share of rural DCCs have had to close down over the past decade or so
The overall trend for kindergartens during this period has been quite different After an initial decline in the number of kindergarten classes and enrolment during the late 1980s and early 1990s, enrolment in kindergarten centres has seen a marked upswing, especially since 1995 In 1991-92 only about 1.5 million children attended 56,400 classes in 6,870 centres, but by 1997-98 2.25 million children were attending more than 82,000 classes in 8,200 centres
It should be noted that the increase in kindergarten classes and students has occurred primarily in urban and semi-urban areas In some rural areas the number of kindergarten classes have also increased but services are only available for five- to six-year-olds, while in remote and mountainous areas families often have no access to kindergarten education for their children at all In addition, while the State remains the primary source of funding for DCCs and kindergartens in urban areas, rural communities and parents—who are generally poorer than their urban counterparts—are required to shoulder most of the financial burden for ECC programmes in their locality Primary education consists of five years of schooling for children who are generally between six and 14 years of age Currently, the participation rates for primary-school-age children are high in comparison with many other countries in the region In 1998/99 about 10.3 million children were in primary school, 47% of whom are girls, and 16% ethnic minority children By 1997/98 the net enrolment rate had reached nearly 97%—up from 89% in 1992/93—and the primary school completion rate was reported to be 66% (ibid) However, about 1.2 million children of primary school age (6-14) have never enrolled in school at all, and more than 600,000 primary school children dropped out during the 1996-97 school year (MOET 1998d) The transition rate from primary to secondary school is relatively high and lower secondary school net enrolment rates have doubled in the past five years to reach 61% for girls and 62% for boys (GSO 1999) The number of children enrolled in lower secondary school dipped to a low of 2.7 million in 1990, but has now climbed to million However, regional disparities in secondary school enrolment are very significant, with the Northern Mountainous Region, the Central Highlands and the Mekong Delta Region lagging far behind Again, remote rural populations—particularly ethnic minorities—are especially disadvantaged with regard to access to secondary school facilities, availability of teaching-learning materials and the recruitment of trained teachers Gender disparities, particularly among ethnic minorities, are also more pronounced at the secondary school level
(63)nation-wide However, in a few provinces with large ethnic minority populations, illiterate women constitute as much as 60% of the total population of illiterate youth and adults in the 15-35 year-old age group (MOET 1999b) 8.1 National policies
The Government has long prioritised ECC, as evident from a 1979 national policy document that states that “care and education given to children from birth to six years of age is of prime importance” (UNICEF 1994a) A new Education Law came into effect in January 1999 that made early childhood education part of the formal national system of education for the first time It stipulates the basic required content of early childhood education and lists different types of recognised ECC institutions While the State encourages the establishment of private ECC institutions, it also acknowledges its responsibility to support disadvantaged groups in gaining access to ECC services It is clear that current Government policies prioritise enrolment of children in kindergartens over enrolment in DCCs, and this trend will almost certainly continue well into the next decade
In 1991 the National Assembly passed a law on Universal Primary Education that made primary education compulsory for primary-school-age children The law prioritised support and development of primary education in disadvantaged regions, including ethnic minority areas The 1999 Education Law reiterated that primary education is compulsory for all children between six and 14 years of age Furthermore, it stipulates that primary schooling must ensure that a child develops basic listening, reading, speaking, writing and calculating skills, acquires a habit of doing physical exercises, practises good sanitation, and gains knowledge of natural social science and humankind
Following the World Conference on Education for All in Jomtien, Thailand in 1990, Viet Nam developed goals for basic education that were outlined in a National Plan of Action in 1991 The targets for 2000 and progress towards reaching these targets by the 1997-98 school year are set out below (Table 10)
Table 10: Basic education achievements and targets
Source: MOET 1999b
Viet Nam is on track to achieve most of its ECC objectives for 2000, although a sizeable gap between the target for primary school completion and the 1997-98 rate still remains (see Annex I for a summary of Viet Nam’s commitments and follow-up to the World Conference on Education for All)
8.2 Organisation and financing
The Ministry for Education and Training (MOET) is responsible for policy-making and the supervision of general education programmes including ECC, primary and secondary education At the central level, the Department of Early Childhood Education assumes responsibility for implementing all ECC activities for children up to age six The Institute of Early Childhood Studies develops ECC curricula and teaching aids
At the provincial and district levels, the Deputy Director of Educational Services (linked to MOET) is responsible for all activities relating to ECC education in DCCs and kindergartens All provinces have at least one pre-school teacher education programme, which offers training to ECC providers
At the commune level, the day-to-day management of the ECC programme falls under the leadership of the chairman of the local People’s Committee MOET, the Viet Nam Women’s Union, the Farmer’s Union and the
Category 1997-98 school year Target for 2000
3 months–3 year olds enrolled in DCCs 8.9% 14% 3-6 year olds enrolled in kindergartens 40.1% 40% 5-6 year olds enrolled in kindergartens 77% 80% Primary-school-age children completing primary school 66% 90%
Under-15 literacy rate 93% 100%
(64)Ministry of Health also support ECC activities in local communities This informal coalition of partners has created the potential for a more participatory, flexible and co-ordinated approach to ECC at the local level Although MOET oversees certain areas of education planning—such as the national curriculum, standardised textbooks, teachers’ salaries and basic school facilities—a decentralised planning structure has been in place at the provincial and district levels since 1986 So, for example, the annual education budget is prepared at the district level as part of the overall district development plan, before being passed to the Provincial Education Department, which reviews and consolidates district-level plans into a Provincial Education Plan to be submitted to MOET The budget for general education and training increased sharply between 1991 and 1998, and State spending on education as a percentage of GDP has more than doubled from 1.6% in 1991 to 3.8% in 1998 (MOET 1999b) The relative share of funding for basic education (including pre-school and primary education) has remained relatively stable at just over 40% of the total education budget (Table 11)
Table 11: Education and training budget, 1991-98 (VND billion)
* The % of total State budget allocation to education and training at each level of schooling is given in brackets
Source: MOET 1999b
However, a large proportion—roughly 80%—of the basic education budget is spent on teachers’ salaries (OXFAM et al 1998) Most construction of new primary schools and the costs of teaching-learning materials are financed by funds raised at the household level, along with textbooks, basic school supplies, uniforms and various fees and contributions Altogether, these costs are very significant, and are an important factor leading to poorer parents taking their children out of school (GSO 1999) Regional budgetary norms designed to redistribute financial resources from wealthier to poorer provinces exist, but such mechanisms have been insufficient to cover the shortfall in funds for basic education in poorer areas (OXFAM GB et al 1998)
In recognition of some of these challenges facing the basic education sector, over the last decade a number of donors have provided assistance to the Vietnamese Government for basic education In addition to capacity building to improve education planning and investment, poor children—especially those from ethnic minorities— have been targeted through bilingual and multigrade primary education So far relatively little assistance has been earmarked for ECC programmes
8.3 Access and participation
In many rural and ethnic minority areas kindergarten facilities not exist at all In some communities “home-based” day care had already become an alternative to institution-based care by the late 1980s, when nearly 11,000 households were providing home-based care (UNICEF 1994a), catering for about 1% of children aged six or below In 1998 the number of home-based services had grown to about 16,000, with nearly 94,500 pre-primary school children enrolled (MOET 1998d)
In terms of primary school access, MOET reports a shortfall of more than 100,000 classrooms Shortages are particularly acute in rural areas, and in some cases communities have no primary school at all Even where primary schools exist, poverty, long distances and difficult terrain tend to reduce participation rates, especially for younger children Parents may delay enrolling their children until they are eight to ten years of age The
1991 1995 1998
GDP 76,707 222,840 313,437
Total State budget 11,465 63,080 89,976 State budget allocation to education and training
Of which*:
Pre-school education budget Primary education budget
Junior secondary education budget Senior secondary education budget
1,256
61.4 (4.9%) 475.3 (37.8%) 192.0 (15.3%) 45.0 (3.6%)
6,915
290.5 (4.2%) 2,234.1 (32.3%) 1,352.5 (19.6%) 594.2 (8.6%)
11,757
(65)National Literacy Programme also lists the shortage of facilities and insufficient number of classrooms as an obstacle for conducting literacy education, particularly in remote rural areas
To tackle these problems the Government has encouraged local communities in remote rural areas to build “satellite schools” teaching grades one to three, which are connected to a principal school through a cluster school network An Alternative Basic Education (ABE) system—an abbreviated form of primary education— is also available in many rural and urban communities for children who have never entered or have dropped out of the formal primary education system Of the more than 1.2 million primary-school-age children not attending primary school, over 340,000 are enrolled in ABE classes, accounting for the high net enrolment in primary education (MOET 1999a)
The net primary school enrolment rate for ethnic minority children—82% in 1997/98—is still significantly lower than the national average, according to the Viet Nam Living Standards Survey II (GSO 1999) (Table 12) Overall, of the children currently not enrolled in primary school, about 50% are from ethnic population groups, even though ethnic minorities account for only 14% of the total population (ibid) In addition, the latest available sex disaggregated data from the 1992/93 Viet Nam Living Standards Survey reveal that gender disparities affect ethnic minority girls more than any other category, particularly at the lower secondary school level They tend to bear considerable responsibility for housework and if families can not afford to educate all of their children, they usually choose to keep girls at home and send boys to school
Table 12: Trends in (net) school enrolment rates, by ethnicity
Source: World Bank estimates based on VLSS II
Other groups of children that lack sufficient access to basic education include those from unregistered migrant families, since unregistered children are not eligible to enrol in basic education This is a growing interregional and rural-urban problem affecting large numbers of people In HCMC alone, unregistered migrants are estimated to number more than one million (OXFAM GB et al 1998) Viet Nam’s more than one million disabled children are also disadvantaged in terms of access They are not included in Viet Nam’s universal primary education goals and their enrolment in school is not a requirement for parents and authorities
There are significant regional variations in primary school completion rates: 37.5% in Gia Lai province (Central Highlands), 41.1% in Soc Trang province (Mekong River Delta) and 56.7% in Lao Cai province (Northern Mountainous region) during the 1997-98 school year All of these predominantly rural provinces ranked significantly below the national average completion rate of 66.3% that year (MOET 1999b)
The net enrolment rate of children in lower secondary school is a relatively high 61.8%, according to 1997-98 data, and the transition rate from primary to lower secondary school is 64.9% (MOET 1999c) Notably, the gender gap becomes quite pronounced at the secondary school level With regard to secondary school access, many rural students can only continue past primary school if their families can afford to pay for residence at a district secondary school This is often prohibitively expensive Hence, although about 80% of the population lives in rural areas, rural high school students account for only 42% of the total (UNDP et al 1998)
8.4 Service quality
The main functions of the ECC programme in Viet Nam are to provide age-appropriate mental stimulation as well as basic health and nutrition services DCC curricula emphasise physical activities, music and art lessons, storytelling and environmental education Children generally spend long hours in ECC centres—usually between
% share of targeted age group at each school level
1992/93 1997/98
Kinh majority Ethnic minorities Kinh majority Ethnic minority
Primary school 90.6 63.8 93.3 82.2
(66)seven and nine hours per day, six days a week, for nine months a year The fundamental difference between the curricula for DCCs and kindergartens is that the latter places greater emphasis on the development of specific cognitive skills
An abbreviated 36-day kindergarten curriculum has been developed for disadvantaged rural populations, including ethnic minority children The language of instruction for ethnic minority children is Kinh, occasionally with supporting explanations in the local minority language However, many teachers in rural areas are Kinh and not speak minority languages (UNICEF 1994a) As a result, most ethnic minority children not speak any Kinh at the age of six when they are eligible for enrolment in primary school
Curriculum materials are provided to urban State-run DCCs and kindergartens by the provincial education authorities In contrast, most rural ECC institutions are community-financed, and the modest State subsidy usually only covers the salary of one ECC teacher in each commune Local communities generally finance all materials and equipment in rural DCCs and kindergartens themselves As a result, the facilities and teaching-learning environment of many rural DCCs and kindergartens are poor, and many lack playgrounds and water and sanitation facilities Rural ECC centres also face difficulties in recruiting and training qualified ECC teachers, since salaries provided by the State for urban ECC teachers are usually much higher than rural communities can afford Due to all these factors, the quality of ECC services varies enormously In urban areas, well-equipped DCCs and kindergartens provide a fairly stimulating service Many rural ECC institutions, by contrast, are unable to provide the most basic learning materials, to feed young children nutritious food, or to take preventive health measures in support of the overall development and welfare of young children Observations from field visits to rural communities suggest that the quality of home-based ECC also varies significantly
Universal primary education has been achieved in most of Viet Nam’s provinces However, one of the obstacles to greater participation of ethnic minority children is again their poor command of the Vietnamese language, which is the medium of instruction for all five grades of primary school—regardless of locality and local language The consequences of the language barrier—particularly for younger ethnic minority children in lower primary school—are very high repetition and dropout rates and a lower level of scholastic achievement in primary school compared with Kinh majority children (World Bank 1996) Significant flexibility in the literacy materials has been achieved in terms of producing learning materials in Vietnamese and some ethnic minority languages However, the curriculum is quite traditional and lacks life skills components
Low salary levels for teachers of basic education—coupled in some cases with the demands of teaching in poor and isolated areas—reduces the appeal of both becoming and remaining a teacher Viet Nam has a significant estimated shortfall of 50,000 primary and 38,000 lower secondary school teachers The qualifications and competence of teachers is also an issue The problem is most acute in rural and remote areas, where it is more difficult to recruit teachers who can meet even minimum qualifications In an effort to address this situation—as well as to overcome problems with the language barrier for schools in ethnic minority areas—special teacher training courses with lower academic requirements have been established in order to train and place teachers who are conversant with the local ethnic language and culture (UNDP et al 1998)
Traditional methods of teaching rely very heavily on rote learning The main pedagogical approach in primary and secondary schools still involves memorisation of facts, usually with little opportunity to express thoughts, ideas and opinions
(67)8.5 Key issues Teaching
There is a considerable shortage of teachers in Viet Nam, and also of schools in some areas In particular there are insufficient and inadequately trained bilingual teachers for ethnic minority children In order to facilitate better learning, more ethnic minority teachers or Kinh teachers who are at least conversant in the local minority language need to be recruited The shortage of teachers, and the low quality of teacher trainees, are at least partly due to low salaries, particularly for pre-primary teachers
Training for teachers does not sufficiently emphasise child-centred, holistic and dynamic teaching methods DCCs and kindergartens lack an integrated care model that adequately addresses children’s physical, psycho-social and cognitive development There is also uncertainty regarding whether the ABE model meets the learning needs of those children not in the formal education system, such as acquiring functional literacy skills
Cost effectiveness
Community participation in basic education is often limited to fundraising and maintenance of school facilities Effective, low-cost models that encourage local communities to participate in the management, planning and monitoring of ECC services need to be introduced
Access and participation
A significant number of children, particularly children living in rural areas and ethnic minority girls not enrol in or complete primary education All children need to be integrated into the mainstream primary education system as far as possible, and children should be offered a curriculum of the same quality and comprehensiveness regardless of locality, ethnicity, sex or ability to pay Presently, poor parents are prevented from enrolling their children in mainstream basic education because of their inability to afford the private costs of participation Redistribution of education resources needs to be improved, to ensure basic education for poor communities, including many ethnic minority areas
Policy change is also needed to allow migrant and unregistered children equal access to basic education In addition, UPE goals not include education for children with disabilities The right to basic education for children with disabilities needs to be fully recognised by the Government and included in basic education policies and targets Many poor and rural communities are still without ECC services ECC messages and training through outreach activities for parents and other child care providers need to be developed for these communities Data availability and quality
Currently, the availability of meaningful information and accurate statistics is inadequate, but urgently needed to assess the progress, problems and opportunities of the education system In particular, there is a need for better disaggregated data on the basis of age, sex and ethnicity at the sub-regional level
8.6 Recommendations for action
Develop integrated and holistic early child care models, and develop advocacy, communication and social mobilisation programmes on early child care to inform and educate the general public, as well as parents of young children and other primary care givers and community facilitators, on the importance of holistic early child care
Support community child care and kindergarten programmes by recruiting and training teachers and child care facilitators from local communities
Support pre-primary Kinh language development for ethnic minority children, through bilingual interactions in early childhood care groups
(68)Develop relevant life skills components of the functional literacy programme
Promote a participatory and activity-based approach to teaching and learning at all levels
Promote the triangle relationship between school, family and community for better quality outcomes of the teaching-learning process
Prioritise the improvement of access to and quality of basic education for children in the poorest communes Continue to provide free textbooks and other essential learning materials and build more multi-grade schools and commune semi-boarding schools, particularly for ethnic minorities and other disadvantaged children in remote mountainous and rural areas
Organise social mobilisation campaigns to address cultural practices that restrict educational opportunities for girls in order to increase the demand for education among girls
Change policy to allow migrant and unregistered children equal rights of access to the basic education system
Ensure equal rights for disabled children to enrol in and complete basic education with the Government’s financial and technical commitment
Promote recruitment and training of teachers at District Accelerated Teacher Training Centres, prioritising ethnic minority teachers
Improve content and process of teacher training, emphasising multi-grade training techniques Promote regular in-service teacher training through cluster school networks
(69)Chapter 9: Rural Development
Viet Nam remains a predominantly agrarian society As much as three-quarters of the total population lives in rural areas, with two-thirds dependent on farming for a living Since the advent of doi moi in 1986, and particularly during the last decade, rural areas have experienced dramatic changes While overall agricultural output and productivity have risen significantly, the achievements in the rice sector have been spectacular, transforming Viet Nam from a net importer into the world’s second largest exporter As a result, food security has been achieved at the aggregate level Rural incomes have increased, poverty has fallen, and overall well-being in rural areas has improved
In spite of these overall improvements, high levels of rural poverty and food insecurity persist, particularly in remote upland areas inhabited by ethnic minorities, and in some coastal provinces Indeed, a striking 94% of families classified as living below the poverty line are located, and make their livelihoods, in rural areas (GSO 1999) A better future for the rural poor is, however, within reach With an enabling framework for rural development, strengthened institutions and policies in support of private farmers and entrepreneurs, further economic reform and sound rural investment, the destiny of rural areas can be turned around Building on the successes of previous reform will have beneficial impacts—on social development as well as productivity It will also help to enhance the livelihoods and well-being of disadvantaged groups including ethnic minorities, women, the underemployed and jobless, and the landless
The Government has recognised the urgency of accelerating development in rural areas Investment in rural infrastructure and services has been increased, and a number of support programmes initiated Among them, the National Programme for Hunger Eradication and Poverty Reduction (1996-2000) includes various poverty alleviation initiatives with an emphasis on subsidised and directed credit The 1,715 Poor Communes Programme (1998-2005) is seeking to generate income and employment, improve infrastructure and build local administrative capacity in the poorest areas (see Chapter 3, section for more details) The Five Million Hectare Reforestation Programme (1998-2010) aims to create new jobs for rural households while speeding up reforestation and improving protection of existing forests The Rural Development Strategy currently being formulated by the Ministry of Agriculture and Rural Development (MARD) will be critical in providing a comprehensive and guiding framework to 2010
9.1 Rural institutions
Compelled to respond to the move towards a more market-oriented economy, rural institutions at all levels are finding it difficult to adjust to their new role as “facilitators” of integrated rural development At the central level, institutional change has tended to be limited and slow Some key issues regarding the role of various rural development institutions remain unresolved, with important implications for the future orientation and consistency of policy The Government is aware of these issues and various initiatives to strengthen MARD’s internal capacity in rural development policy planning, implementation and management at different levels are being undertaken in collaboration with the donor community (MARD 1997; UNDP 1998b)
(70)The number of farming families with any involvement in private business is so far limited As discussed in Chapter 2, preferential support for SOEs in terms of land, taxation, credit, investment and trade has considerably reduced the potential of farm households and the private sector to act as a strong and competitive driving force for rural development This has discouraged private investment in rural areas and reduced the scope for building an efficient and diversified rural economy The Government’s promotion of voluntary co-operatives and associations based on the new Co-operative Law of 1996 is a genuine attempt to enhance the capacity of local communities to work together more effectively It has enabled a number of the old production co-operatives to change into ‘new-style’ service co-operatives that can supply agricultural inputs and services more effectively However, changes have been limited, and a substantial number of co-operatives exist only on paper Most co-operatives remain ineffective, with little farmer participation in management Their competitive position is often weak and based on some form of monopoly power (Fforde 1998)
Mass organisations form an important link between the highest echelons of Government and major socio-economic groups, such as women, farmers and youth In recent years, the focus of some of these organisations has widened to include socio-economic activities, though some have been more successful in facilitating rural development than others The Viet Nam Women’s Union—which appears to be more pro-active than other mass organisations at present—has assisted MARD in developing a seven-point Plan of Action for the Advancement of Women in agriculture and rural development, and is credited with significant achievements in micro-finance, extension and functional literacy
Following the advent of doi moi a variety of new demand-driven, self-help and economic-based groups—such as extension clubs, savings and credit associations and integrated pest management groups—have begun to emerge to share resources, purchase inputs, acquire loans or exchange labour While particularly strong in the Mekong Delta, new voluntary groups of farmers and fishermen also exist in the Red River Delta and the north central coast Although they are usually still informal and at a very early stage of development, these new groups represent an important new actor in rural development and could contribute to ensuring equitable access to resources for women, ethnic minorities and other disadvantaged groups
9.2 Rural infrastructure
Rural infrastructure in Viet Nam is generally underdeveloped Most rural communities lack access to basic infrastructure services, including all-weather roads, irrigation, drainage, flood control facilities, clean drinking water, permanent markets and the national electricity grid Rural communities in the poorest and most isolated regions—particularly areas inhabited by ethnic minorities—are usually even worse off The Government has recognised these pressing needs and identified rural infrastructure as a development priority In this context, under the 1,715 Poor Communes programme, the poorest 1,000 communes will each receive VND400 million, the first tranche of which is to be allocated to one of six types of infrastructure (health station, education facility, market building, power station, small irrigation scheme or road to the commune centre), according to local needs Earlier in 1997 another programme for the development of commune centres was implemented (Prime Minister’s Decision 35/TTg), testifying to the Government’s effort to build and improve rural infrastructure
Inadequate access to good transport routes in Viet Nam seriously limits the income-generating options available to rural people, exacerbates marketing difficulties and reduces access to basic social services It can also make alternative development for drug control unsustainable in upland areas and contributes to the resumption of poppy cultivation Rural roads are generally constructed to low standards with high maintenance costs (World Bank 1998) Moreover, some 20% of communes in the Northern Mountainous region are reported to lack motorable roads, and about 30% of district and 50% of commune roads are estimated to be impassable in the wet season (UNDP 1998b) Similarly, inland waterways, vital for the transport of agricultural produce in the Mekong Delta, are in urgent need of rehabilitation and upgrading
(71)have been prioritised at the expense of small-scale, on-farm facilities, which would enable small farmers to diversify into higher value crops In the absence of well-developed dykes and flood control systems, flooding from rivers and storm-driven tidal flows result in heavy loss of life, as well as extensive damage to crops and farms, leading to estimated annual economic losses of some US$50 million (World Bank 1998)
Rural electrification is an important part of Government plans to promote rural industrialisation and modernisation As discussed in Chapter 10, rural electricity use is still low, due to limited access and high charges Consequently, family use, water pumping, agricultural processing and other rural commercial uses account for as little as 10-15% of national energy consumption (UN 1998a)
9.3 Land allocation and management
By developing the system of land-use rights under the 1988 and 1993 Land Laws, the Government created the conditions under which farm households and private and public enterprises gained security of tenure to land (see box) The benefits for the majority of rural people have been enormous Since 1993 significant progress has been achieved in clarifying and assigning agricultural land-use rights, though the process for forestry and non-agricultural land has lagged behind considerably By early 1998 some 86% of cropland had been allocated, compared to just 10% of forest land (World Bank 1998) Although guidelines for forest land allocation exist, mapping difficulties associated with the terrain, a lack
of updated land-use maps, poor methods and problems in reconciling the law with customary land-use practices have prevented efficient allocation
At the local level, land allocation has been constrained by a scarcity of information on the new rules and regulations, inadequate implementation capacity, limited transparency regarding allocation procedures and insufficient participation (UN 1996) In some cases, serious conflicts over boundaries and competing claims have emerged In general, poorer households, women and ethnic minorities have fared least well in the process (UN 1998a) Based on existing land-use patterns, poorer families have tended to be assigned the smallest, least fertile and most remote plots In some cases, they have refused to formalise their land allocation, while in others they have been unable to afford the land-use certificate fee (ibid) Although official policies are gender neutral and certification allows for joint titling, in reality women are often excluded by custom if not by law Although land-use certificates have created more legally binding relationships between households, the intra-household dynamics of land allocation are less clear In this context, some studies have pointed to the increasing likelihood of female landlessness following separation or divorce, given that women are not usually named on land-use certificates (OXFAM GB 1997)
The livelihoods of some ethnic minority groups have been threatened by the new laws, which recognise neither swidden agriculture nor collective land rights Under resettlement programmes, incoming migrants are allocated so-called “barren” land that may actually already be used by minorities for shifting cultivation and grazing, gathering wood, fodder, supplementary foodstuffs and so on The allocation of fragile barren lands has further increased the likelihood of soil erosion through the application of unsuitable and unsustainable agricultural practices in upland areas
Despite their new rights, farmers still lack complete control of their land assets Maximum ceilings on land holdings, set by the Government and based on food security and equity concerns, as well as restrictions on the use to which land may be put, continue to constrain household decision-making Converting paddy land to other uses, and renting land for more than three years for annual crops or aquaculture is allowed only with special,
New land rights for farmers
The 1993 Land Law recognised the farm household
as the main unit of agricultural production and granted farmers 20-year rights to land used for rice and other annual crops, and 50-year land rights for perennial crops It liberalised farm decision-making related to the purchase of inputs and the sale of outputs Most importantly, it granted“five rights” to those legally possessing land: the rights of
(72)high-level permission, while high taxes on the sale and exchange of land inhibit land amalgamation Notwithstanding such disincentives, some consolidation of land has occurred, especially in southern provinces, giving rise to a new and controversial class of landless people Although landlessness is often an acute social problem, in cases where poor households have been able to use the proceeds of their land-use rights sale to find off-farm employment that pays as well or more reliably than farming, a reduction in the number of families owning land may be a positive development Viet Nam already has one of the highest ratios of population to arable land in the world and the growing population will place increasing pressure on scarce land resources for production of food as well as cash crops
From 1993 until recently, implementation of the five land rights (see box, previous page) was held up by the absence of sufficiently clear guidelines Uncertainty regarding the renewal of land-use rights, together with ambiguities related to the transfer and mortgage of land, further reduced the ability of farmers to offer land as collateral In March 1999, however, the Government finalised guidelines, which should considerably facilitate the development of a market in land
9.4 Rural credit
In general, rural demand for credit far exceeds supply, particularly for services tailored to the needs of the poor The Government has sought to respond to the situation by establishing the Viet Nam Bank for the Poor in 1995 to provide subsidised and directed credit for the poor, introducing innovations aimed at enhancing the outreach of the Viet Nam Bank for Agriculture and Rural Development (VBARD), promoting commune-level savings and credit co-operatives (People’s Credit Funds), and prioritising access to credit in HEPR and other programmes In spite of these efforts, however, a large part of the rural population, particularly women and isolated communities, continue to rely on informal financial providers demanding considerably higher rates than formal financial institutions Due to distortions in the formal credit market, competition for loans is high, and applicants perceived to be less risky are favoured over poorer farmers However, NGO and donor-supported micro-finance schemes have demonstrated that this perception is false, and that the poor can repay loans at interest rates equal to or higher than VBARD rates Such micro-finance schemes have also confirmed that poor people value access to credit over low-cost credit (for instance credit at preferential rates, such as that offered by the Bank for the Poor) While still limited in outreach, these mostly group-based schemes have demonstrated their capacity to empower the poor, improve household production, enhance women’s status and reduce child malnutrition
Complicated credit request procedures and conventional collateral requirements significantly reduce poor people’s access to formal credit Despite considerable progress in land-use certification, few farmers can offer land as collateral given uncertainty over the renewal of allocations, as well as the fact that the value of the land is based on current rental payments rather than on the actual market value (World Bank 1998) Many poor farmers are simply afraid to risk using their land as collateral as it is their only means of subsistence (UN 1998a) Similarly, although the borrower’s sex is not a criteria for lending, women not named on land-use certificates sometimes experience difficulties in securing loans In addition, access to medium- or long-term credit is particularly limited, seriously inhibiting agricultural diversification, as well as the development of rural industries and off-farm employment Despite the importance of savings in smoothing seasonal consumption imbalances and building household equity, formal institutions (except people’s credit funds) pay little, if any, attention to savings Indeed the Bank for the Poor exists only to lend The people’s credit funds have indicated their potential to provide much-needed competition in the rural financial sector Together with NGO and donor-supported savings and credit schemes, they have underlined the benefits of expanding access to financial services tailored to the needs of the poor and women 9.5 Agricultural productivity
(73)more than doubled rice output after 1988 Output of non-rice food crops (such as soybeans and vegetables), commercial and industrial crops (such as coffee, cotton, rubber and tea), livestock and aquaculture also expanded significantly The success of the rice sector has made a major contribution to the achievement of food security at the aggregate level, and to significant foreign-exchange earnings from exports
But despite the substantial improvement in overall food security, many families remain vulnerable, and some— particularly ethnic minorities in isolated uplands—go hungry for as many as three or four months each year (IIED 1998) Malnutrition is also a persistent and, in some instances, growing problem In addition, large pockets of poverty have emerged in the delta areas, especially among small farmers (FAO 1998) Women carry a major workload in the agricultural sector, with 73% of all farmers being women While also involved in aquaculture and livestock production, it is in rice production that women have the most substantial—and growing—role The combined real growth rate of agriculture, forestry and fisheries has declined over the last few years from 4.8% in 1995 to 2.7% in 1998 (IMF 1999) Rice farmers now face the prospect of stagnant incomes and reduced incentives in rice production, caused by the lower real prices created by productivity gains and the transformation of the economy which has seen demand for staple foods grow more slowly than for higher value-added foods and non-food commodities (IFPRI 1998) Fluctuations in national rice prices since 1996 have illustrated the dangers of over-reliance on rice production and increased the urgency of further policy change to encourage a diversified and flexible agricultural economy that is responsive to market conditions
Although limited until now, diversification into non-rice crops, livestock and aquaculture is growing Since achieving self-sufficiency in rice, the Government has placed greater emphasis on developing the livestock subsector In response, livestock (mainly pigs, cattle, poultry and goats) has grown in importance during the last five years and now accounts for some 25% of total farm income (Hai 1998) Demand for livestock products can be expected to rise rapidly in parallel with increasing incomes, and to lead to expanded production However, certain issues must be addressed for households to successfully exploit this opportunity In particular, high-quality animal feed is in short supply, feeding practices are poor, processing standards are low and advisory services for animal health and breeding are inadequate
Diversification offers significant potential to increase farmers’ incomes and expand local off-farm income-generating activities, including processing In upland areas, it can provide opportunities to fill the gap in farming systems left by opium eradication programmes To maximise the potential of diversification, it will be important to remove persisting constraints, including policy biases, trade restrictions, insufficient long-term credit and inadequate support services For instance, import restrictions on inputs, including fertiliser and hybrid seed varieties, have increased the cost of these inputs to farmers and subsequently reduced their use (World Bank 1998) The Government has taken steps to address farmers’ needs for advice and training by establishing a new integrated agriculture and forestry extension system in 1993 In spite of the progress made, however, extension capacity remains especially weak for non-rice crops and animal husbandry, and access is particularly poor for upland communities and women Linkages between research, extension and farmers are also poorly developed The capacity of the national agricultural research system is reduced through duplication and overlap, limited funding and weak resource allocation, together with a lack of needs-based research, particularly for non-rice, higher-value crops and upland agriculture (UNDP & SDDP, 1998; MPI 1997)
(74)9.6 Off-farm employment and rural industry
Viet Nam has a very high ratio of farmers to arable land, and off-farm employment remains underdeveloped Although one million people—most of whom are in rural areas—are entering the labour force annually, employment generation in the rural areas has been very limited in recent years Most of the modest growth in private, non-farm activities during the last decade has been in small-scale service delivery which, in the absence of complementary agricultural and industrial growth, is unlikely to raise rural living standards significantly (Perkins 1998) At the same time, some 6-7 million rural working-age people are believed to lack permanent work, with rural underemployment estimated as high as 57%, according to the 1997/98 Viet Nam Living Standards Survey (GSO 1999) The scarcity of off-farm employment has seriously reduced the capacity of rural households— including the landless poor—to improve their food and livelihood security It has also contributed to increased criminal activities, including drug trafficking and abuse, and trafficking and sexual exploitation of women and children
The domestic private sector is estimated to provide as many as 96% of rural industrial-sector jobs and about 80% of rural industries are natural resource-based Some two million household enterprises are active in food and agro-processing, wood processing, textiles and garments, brick-making, tanning, handicrafts and so on, often in traditional, “occupational” communes or villages Although the rural business sector includes some 4,500 SOEs, their role in employment generation has been minimal (UNIDO 1999)
In the absence of an enabling environment, household businesses and industrial units have generally been unable to achieve high productivity or expand their operations Attempts to increase rural off-farm employment have faced a number of barriers, including active preferences vis-à-vis SOEs, lack of capital and credit, poor market access and infrastructure, and inadequate equipment (Smith 1998) Institutional support has been limited and red-tape can be excessive, reducing the ability of farmers, processors, entrepreneurs and industrialists to maximise their returns
The Government is aware of the challenges of transferring labour from agriculture to higher-growth non-agricultural activities in rural areas, and has set out an initial strategy to develop handicrafts and small industries, including processing of agricultural and forest products (MARD 1999) The ability to generate additional off-farm productive employment through an enabling environment for private business development will be vital to the success of this rural strategy The new Enterprise Law is a positive development in this regard
9.7 Key issues
In recent years Viet Nam has taken a number of steps on the path towards enhancing equity, increasing incomes and improving livelihoods in rural areas However, a range of constraints persist, and further liberalisation, together with institutional, policy and legislative reform, is required to stimulate pro-poor growth and further reduce rural poverty and food insecurity
Given the multifaceted nature of the rural development challenge, several key issues are closely interrelated and will need to be addressed simultaneously For instance, clarification of land-use rights, particularly the right to mortgage, is important for the development of rural credit markets Similarly, better access to improved infrastructure as well as technology, extension and vocational training is necessary to promote agricultural diversification, and expand off-farm income opportunities
Three issues in particular deserve urgent attention In addressing each of these priorities, it will be essential to mainstream gender, environment and ethnic minority needs and interests
Capacity and institutional development
(75)reform will be critical to streamline and improve the effectiveness of existing rural institutions at the central and lower levels, and to assist MARD to successfully adapt to its new role as facilitator of rural development Empowerment of the rural poor
The second priority is to empower poor rural people to participate effectively in a more market-oriented rural economy, through increasing their access to improved inputs (such as seeds, fertilisers and credit), support services (such as extension, training and market information), as well as post-harvest processing technologies and markets In this context, access to improved basic physical and social infrastructure should be expanded, land allocation accelerated, processes to facilitate local people’s participation in decision-making improved, and security of tenure guaranteed
Diversification of rural livelihoods
Finally, there is a pressing need to diversify rural livelihood options and expand off-farm income generating opportunities, given the inability of agriculture to continue to absorb the steadily growing labour force and the desire to avoid large-scale rural-to-urban migration The success and sustainability of efforts to encourage agricultural diversification and expand off-farm employment will depend significantly on progress achieved in addressing the first two priorities
9.8 Recommendations for action Policies
Agriculture and the rural economy must continue to be among the main vehicles for development and poverty reduction over the coming decade, and should consequently be invested with the appropriate capital and human resources
Since the Government remains significantly dependent on donor support for rural development, the keys to progress are the same as for improved aid effectiveness generally: sound policies and competent institutions, followed by adequate resources
Rural development should be supported within a comprehensive strategic framework with a Government/ donor partnership at its core, led by the Government and open to other relevant stakeholders A new structure and role should be established for the Government/donor working group led by MARD
Partnerships should aim to develop sectoral or programme approaches to rural development to replace project approaches
There is a need to ensure equal opportunity, access and control of assets and resources, for example through equal inheritance rights and titling of Land-use Certificates, Residence Registration Cards, and other certificates of household assets The work of the MARD Technical Working Group on Women’s Advancement and Gender Integration in Agriculture and Rural Development should be supported in this process
Rural sector competitiveness
Food security and rural job creation, two overriding rural development objectives, will only be achieved by a competitive rural economy That means placing resources and decision-making largely in the hands of producers and consumers, with limited State intervention, as well as the creation of a level economic playing field for all economic actors, including the State
To promote the competitiveness of producers, they require freer access to input and product markets, access to reliable market information and assistance to appreciate the demands of the market place and the need for quality in production
Existing obstacles to attracting small and medium-sized industries into rural areas to generate job and income opportunities need to be removed Land, taxation and other policies should be reviewed and amended to attract investment—both domestic and foreign—into the rural sector
(76)Institutional reforms
Institutional reforms should be accelerated to support the continued evolution of competitive rural sector industries—farm and off-farm This should take place within the Government’s framework for decentralised administration
The structure and functions of MARD need to be fully reviewed The merger of three former departments to create MARD needs to be realised, and the respective roles and responsibilities of central and provincial authorities should be reviewed and realigned
MARD should aim to reflect the structure of the industry it serves, both with respect to gender and ethnicity Specific attention should be given to considerations of gender equity in staffing and participation in ministerial/ project activities and benefits
Agricultural research and extension requires a significant overhaul if it is to serve the practical needs of farmers and the agricultural industry
Stakeholder participation
Stakeholders at all levels need to be provided with the opportunity to effectively participate (and not only be represented) in planning and implementing the development processes that affect them Government staff and rural residents at all levels should be trained in participatory planning and development
Functional farmer groups, such as water users’ and women’s credit groups, as well as modern co-operatives should be encouraged and empowered Participation in rural sector planning and decision-making by mass organisations, such as the Women’s Union and the Farmers’ Union, and emerging civil society should be promoted Collaboration of these mass organisations with the Governmental institutions should be strengthened in order to maximise their respective support to actual rural development
Labour-based methods should be the norm for rural infrastructure projects, in order to maximise rural job creation
Human resources development
Invest more in human resources for rural development—especially in remote and mountainous areas and among ethnic minorities—through expanded professional and vocational training
Develop further the capacity of the regional agricultural universities and colleges and MARD’s rural management colleges
Focus on developing farmers as business people Formulate and implement a nation-wide training programme for farmers, commune and district level staff, to include training on farm management, marketing, participatory planning and effective use of development assistance
Expand vocational training centres in remote and mountainous areas, and on-site training for technical staff and farmers
(77)Chapter 10: Environment and Natural Resource Management
During the 1990s, a number of important legal and institutional measures have been taken to protect Viet Nam’s environment The National Plan for Environment and Sustainable Development 1991 to 2000: Framework for Action(NPESD) was published in 1991, the National Environment Agency was established in 1993, and a comprehensive Environmental Protection Law was enacted in 1994 The Government of Viet Nam has also ratified several major international environmental conventions and agreements (see box) Following Viet Nam’s ratification of the Convention on Biological Diversity the Government prepared the National Biodiversity Action Plan, which was approved by the Prime Minister in 1995 In 1998, the Politburo issued a directive on Strengthening Environmental Protection in the Period of Industrialisation and Modernisation (No 36-CT/TW) An update of the NPESD is currently being prepared, and should include key issues such as population growth and migration
Major International Environmental Conventions and Agreements ratifed by the Government of Viet Nam during the 1980s and 1990s
• 1971 Convention on Wetlands of International Importance especially as Waterfowl Habitat (RAMSAR Convention)
• 1972 Convention Concerning the Protection of the World’s Cultural and Natural Heritage (World Heritage Convention)
• 1973 Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
• 1973/78 MARPOL Convention for the Prevention of Pollution from Ships
• 1982 United Nations Convention on the Law of the Sea
• 1985 Vienna Convention for the Protection of the Ozone Layer
• 1987 Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol)
• 1989 Convention on the Control of Trans-boundary Movements of Hazardous Wastes and their Disposal (Basel Convention)
• Agenda 21, the Action Plan from the 1992 UN Conference on Environment and Development (Earth Summit) in Rio de Janeiro
• 1992 Convention on Biological Diversity
• 1992 United Nations Framework Convention on Climate Change
• 1994 United Nations Convention to Combat Desertification
Yet, with all these efforts, the natural environment in Viet Nam continues to deteriorate Forest degradation and unsustainable conversion of forest to other uses has continued unabated in many areas, both in the highlands and along the coast Land degradation is an important and growing environmental problem, in particular in poor farming areas in the highlands Freshwater wetlands are threatened with agricultural encroachment, and marine resources are being degraded by inappropriate fishing methods There are severe localised problems with water quality In the larger cities, the mostly outdated urban infrastructure can no longer cope with the increasing population As a result of recent industrial expansion, industrial water and air pollution has also become critical in and around Viet Nam’s major cities The next decade will see significant growth of energy production and consumption, but the energy options being considered by the Government have potentially serious environmental impacts
A major cause of environmental degradation is population growth Since 1950, the population has trebled, making Viet Nam one of the most densely populated countries in Asia Today there is less than 0.12 hectares of agricultural land and 0.10 hectares of forested land per person (UN 1998) Further agricultural expansion and intensification will have a negative impact on the environment as sensitive areas are brought under cultivation and increasing amounts of pesticides and chemical fertilisers are used
(78)the population continues to grow and consumption patterns change as a result of higher standards of living, threats to the environment will remain very real in Viet Nam into the foreseeable future
10.1 Forests and land
The forestry policy in Viet Nam has been changing simultaneously with the introduction and adoption of major changes to the country’s economic policies For the forestry sector this change implies greater involvement of people in implementing forestry activities and new orientations for forestry development, including a move away from large-scale plantation development and reliance on State management of forest resources In spite of these policy changes, however, the forestry sector is generally witnessing a deteriorating situation on the ground, and many outdated policies and practices remained unchanged
The allocation of forest land to households for management and protection has been the centrepiece of forest policy reforms to date Secure land tenure and land-use rights are seen as essential elements for the sustainable use of natural resources It is estimated that some 24 million people live in or close to forested areas, thus directly depending on forests and forest land for their livelihood (Warfwinge & Hoai 1998) As discussed in Chapter 9, allocation of forest land to farmers and forest users is taking place only slowly, with some areas embarking only now on the process
Of the 33 million hectares comprising the total land area of Viet Nam, 19 million hectares is officially classified as forest under the jurisdiction of the Ministry of Agriculture and Rural Development (MARD) Ecologically speaking, only part of this area actually possesses forest vegetation and much of that has suffered serious biodiversity loss The total forest cover in Viet Nam has declined steadily since 1943, when the total estimated forest area was 14 million hectares (43% of the land area) This figure had fallen to million hectares by 1997 (26% of the land area), according to the official classification
Natural forest has been transformed into “barren” and “unproductive” land in many parts of the country However, although much of this land is degraded, it is often still used for cultivation of food crops and grazing of livestock As the population increases, pressure on forests to provide increasing quantities of food has led to the clearing of ever more land, and the shortening of traditional fallow periods In upland areas, where most of Viet Nam’s remaining natural forests are found, forest cover loss due to population pressures and the widespread use of swidden agricultural practices has precipitated an environmental crisis Habitat destruction is quickly leading to biodiversity loss and forest clearance is impacting on river regimes and water regulation capacities as well as contributing to increased soil erosion Although there is no consensus on the principal cause of deforestation, it is generally agreed that logging practices, agricultural expansion, the effects of war, and shifting cultivation have all contributed (Dubois & Morrison 1998) The loss of forest lands needs to be addressed in conjunction with rural development and poverty alleviation activities
Since about 1990, it appears that the rate of deforestation has marginally decreased Official figures even suggest an actual increase in the overall forest cover between 1990 and 1995, with the loss of natural forests being offset by increased plantation areas and natural regeneration However, the statistics not take into consideration that forests may be deteriorating in quality In many cases, the offset is based on plantations of eucalyptus and acacia, which increase wood availability (thus, in theory, easing pressure on natural forests), but not compensate for loss of bio-diversity There is little consensus regarding the current status of forest assets There is currently no unified system of land classification As a result, a high degree of confusion exists and this is likely to cause conflicts over land issues with the implementation of the Five Million Hectare Reforestation Programme Policy changes, achievement of food security at the aggregate level, and the allocation of forest land to smallholders may have led to the reported increase in forest cover, although the relative significance of the different factors is unknown
(79)Hectare Reforestation programme, which was approved by the National Assembly in 1998 and is scheduled to run to 2010 This programme could transform the forestry sector, since local people are to take on greater responsibilities for managing forest land, while large-scale plantation development and State forestry enterprises are expected to play a reduced role
However, many of the institutional and policy constraints that limited the effectiveness of earlier forestry programmes still remain The Government’s 327 programme on Re-greening of Barren Hills, which ran from 1991 to 1998, had some localised benefits especially for State Forest Enterprises, but was criticised for being too top-down, inconsistent in its objectives, insensitive to local people, biased toward tree plantations on land crucial for local food security, and slow in disbursing funds It was also hampered by the lack of progress in land allocation in many areas
Building on these lessons, the Government and donor community have embarked on a consultative process intended to strengthen the planning and implementation of the Five Million Hectare Reforestation programme In the short term, a number of key issues, including the programme’s components and implementation methodology, will be studied in detail to strengthen the scientific and technical foundations of the programme In the longer term, it is expected that these Government-donor consultations will lead to a partnership for unified forestry-sector support and a shift towards more programmatic and co-ordinated assistance to forestry in Viet Nam 10.2 Marine and water resources
Viet Nam has 3,260km of coastline fed by 112 rivers and streams Almost all major population centres are found on the banks of these rivers, and more than 50% of the population lives in coastal areas (MPI & MOF 1996) Water—both as a productive resource and as a destructive force (in the form of annual floods and typhoons)— plays an integral role in Vietnamese life and culture
In general, water resources in Viet Nam remain abundant However, there are numerous signs of deteriorating marine and water resources Population growth, urbanisation and industrialisation have increased the pressure on the country’s water resources, causing problems of water shortages, water pollution, salinity intrusion, watershed degradation, and increasing flood damage in recent years There are severe localised problems with water quality, particularly due to increasing sediment loads and organic waste, even in most rural areas In addition, rapid up-stream deforestation is leading to greater and more frequent peaks and troughs in water flows, which may contribute to flooding and drought About 50% of the fluctuation in rice production is due to the growing unpredictability of water flow levels (UNDP 1999) Also, competition between sectors—hydropower, flood control and irrigation—has resulted in sub-optimal investments Lack of co-ordination across administrative boundaries has caused environmental problems downstream
Partly in response to these threats, the National Assembly approved the national Water Resources Law (WRL) in 1998, after a very long period of consultation The WRL will, for the first time in the country, establish specific institutions and instruments for comprehensive water resources management, recognising the need for integrated water resources management that reaches across administrative boundaries and sectors For example, the WRL provides the legal basis for establishing river basin organisations that would be responsible for the management of river basin planning However, few changes have actually taken place yet, as the implementation decrees are still to be finalised Effective implementation of the WRL will also require a large and sustained investment in capacity building to undertake the new functions
(80)At the same time, coastal aquaculture has grown dramatically Between 1985 and 1994, the area utilised for brackish water aquaculture more than quadrupled, from 67,000 to 288,600 hectares More than 80% of this area is in the Mekong River Delta, primarily in the Ca Mau peninsula (ibid) Unplanned and poorly managed aquaculture development is causing severe degradation to coastal marine habitats, wetlands and mangrove forests, and in turn to the viability of the aquaculture itself
The Government is aware of this increasing environmental degradation and the seriously damaged fisheries resources base The Master Plan for Fisheries to the Year 2010, prepared by the Ministry of Fisheries (MOF) in 1998, clearly recognises the threats of over-exploitation and unsustainable development The master plan outlines a list of activities to strengthen the MOF’s internal capacity to protect the environment and preserve Viet Nam’s fisheries resources and those natural resource systems that are impacted by the fisheries industry However, the industry appears to continue to operate largely uncontrolled, and implementation capacities within the ministry remain weak
Many bilateral and multilateral donors are active in the water and coastal and marine development sectors in Viet Nam However, projects are mostly conducted in isolation, using different approaches and lacking a conceptual or organisational connection that could provide synergies Despite some good work done in individual projects, and the adoption of a programme approach by some donors, these separate efforts have not been able to bring about sustainable management of marine and water resources In order to assist the Government more effectively in its management of marine and water resources, the Government and the donor community have embarked on a consultative process intended to find approaches to managing the resource base in a more environmentally and socially sustainable manner
10.3 Urban and industrial pollution
The high rates of emission of industrial pollutants—particularly by SOEs—are largely the result of the widespread use of environmentally inefficient technologies and poor management The Law on Environmental Protection includes comprehensive environmental standards and decrees on Environmental Impact Assessment and administrative fines However, environmental inspection agencies are generally weak, with limited capacity to enforce the law There are also few incentives to change, and most companies lack the know-how to significantly reduce their waste and energy use A constructive step to address this gap was the recent issuance of a directive on Strengthening Environmental Protection in the Period of Industrialisation and Modernisation (No 36-CT/TW) to encourage cost-effective waste minimisation and cleaner production The directive also states that the provincial Departments of Science, Technology and Environment and environmental institutions will receive assistance to improve their capacity and effectiveness
Urbanisation and industrialisation are accelerating simultaneously, resulting in a concentration of people and pollution in the cities Effective urban planning has crucial implications for sustainable resource use and environmental quality in cities At present, infrastructure for waste treatment is either absent or of poor quality Municipal and industrial wastewater treatment systems are insufficient Solid waste is disposed of at poorly designed dumpsites, allowing pollutants to leak into the groundwater Furthermore, hazardous waste is not treated separately but mixed with inert solid waste According to a recent study of hazardous waste management in Viet Nam, of the 275,000 tonnes of hazardous industrial waste currently generated and mostly dumped without treatment, approximately 110,000 tonnes require physical/chemical treatment, 45,000 tonnes require incineration, and 120,000 tonnes require a secure landfill (NEA & ADB 1998)
(81)industrial zones have no environmental infrastructure, although some larger ones have plans to install wastewater treatment facilities Hazardous waste management is not yet on the agenda of most industrial zone authorities 10.4 Energy production and use
Viet Nam is one of the lowest consumers of energy in the region At just four giga-joules per person annually, Viet Nam’s per capita consumption is only one-third that of Indonesia, one-sixth that of China and one-thirtieth that of South Korea (UN 1998) However, both production and use of energy are increasing rapidly The growth translates into Viet Nam needing 400 megawatts of new capacity added per year to meet demand (UNDP 1999) The energy options being considered by the Government have potentially serious environmental and social impacts Hydropower directly alters rivers and watersheds, and people are forced to relocate Coal power has severe landscape and pollution impacts A detailed comparison of the relative advantages and disadvantages of the various options must be undertaken before any energy sector development strategy is adopted
A recently completed report on Viet Nam’s energy sector has identified key structural and institutional reforms and investments that need to be made in the oil, gas, coal and electricity subsectors Issues related to rural energy or the “traditional” energy are much harder to analyse, but there is no question that they deserve equal attention in view of the fact that Viet Nam remains essentially a rural society, and traditional energy consumption— mainly in the form of wood and other biomass fuels—still makes up 66% of total consumption (World Bank 1998)
Nearly six million Vietnamese households—or 30 million people—have no access to electricity In 1995 only 14% of the electricity sold by the State-owned power company, Electricity of Viet Nam, went to rural areas Thus, approximately 20% of the country’s population consumed 86% of its electricity Rural consumers use only one-fifth the electricity of urban consumers, but pay more than twice as much per unit (ibid) Transmission and distribution networks are old, over-stretched and inefficient, resulting in poor reliability and high distribution losses Restricted access to energy has presented a serious impediment to rural development in Viet Nam The Government recognises the electricity needs of rural areas and has developed an ambitious rural electrification programme that envisages providing electricity to 80% of communes by 2000 (from 63% currently), and connecting all communes in the plains and 60% of rural households by 2010 Under this programme, although rural electricity consumption would increase in absolute terms, the rural share of electricity consumption in 2010 would drop to about 13%, from 14% today (ibid)
However, even with an aggressive programme to extend the rural grid, many households in Viet Nam’s 2,800 remote and mountainous communes will not be connected to the grid within the next 10-15 years Other options to complement the grid extension work need to be found in order to meet the energy needs of rural areas more quickly There is considerable potential for the use of decentralised energy supply systems and renewable energy sources Such energy solutions should be considered where conventional sources are not available or inconvenient to use
EVN is attempting to reform itself based on the Electricity Law and Grid Code, but is in a difficult position The Government is demanding a more professionally run and cost-effective utility at the same time as an expansion of the rural electrification grid to 80% of communes This is problematic, since electricity tariffs are not allowed to be raised to recover the full cost of grid expansion
(82)10.5 Key issues
In spite of the many important legislative and regulatory measures that have been taken to protect Viet Nam’s environment, environmental degradation continues Current patterns of natural resource exploitation are not sustainable and as such threaten the long-term economic as well as environmental health of the country A number of key challenges lie ahead, and further assistance is needed for Viet Nam to achieve the goal of sustainable development
Integrated planning and prioritising the environment
The need for integration of economic, social and environmental factors in the development planning process is still not well understood by the Government The recent directive on strengthening environmental protection is a step in the right direction, but environmental protection agencies remain understaffed and poorly funded For example, the National Environment Agency has only 70 staff and an annual budget of just US$1.5 million The main priority of the Government continues to be economic development, modernisation and industrialisation This emphasis has brought many short-term benefits but, in many instances, long-term costs to the environment Data for environmental planning
A reason for the low profile of environmental conservation is that policy-makers are not sufficiently aware of these long-term costs because high-quality baseline data are lacking Thus, even if environmental protection were a high priority, it would be difficult to set priorities since environmental trends are not well understood There is no regular environmental monitoring programme that produces reliable and comprehensive state-of-the-environment reports, or even an agreed set of indicators Thus, decision-makers are not fully aware of negative environmental trends and the hidden costs of development
Institutional capacity for environmental planning and management
Even if policy-makers were aware of the urgent need to prioritise and integrate environmental issues in their planning, institutional capacities for environmental planning and management remain weak This is partly a result of the above mentioned limited human and financial resources, but it also results from disincentives and conflicts of interests that are built into the environmental management system For example, many of the largest natural resource ministries (MARD, MOF and the Ministry of Industry) retain obligations both to extract and protect natural resources such as timber, fish and coal Capacity building is needed both for strategy and policy development—for example, in updating the NPESD—and for implementation
Public awareness
Public awareness of environmental issues is still low, and tolerance for environmental degradation is high These attitudes result partly from the long legacy of central planning, under which State ownership of all natural resources discouraged a sense of responsibility on the part of individuals The land allocation process is slowly changing those attitudes, but much remains to be done before individuals, civic groups, mass organisations, the mass media and businesses have a strong environmental voice in Viet Nam
Protection strategies
It is difficult to promote regulatory approaches in Viet Nam, due to conflicting and often overlapping areas of responsibility Thus, support for non-regulatory approaches including voluntary compliance should be a key element of any environmental protection strategy Improving the awareness of important groups—such as the business community, environmental journalists and women—would help promote voluntary compliance with environmental regulations
Disaster preparedness
Viet Nam is one of the more disaster-prone countries in the world and suffers from regular typhoons, floods, tropical storms and droughts In response to such threats, MARD and the Central Committee for Flood and Storm Control are working together to establish strategies for disaster preparedness, prevention and mitigation There are still a number of areas in which improvements could be made, such as better dissemination of disaster information and improved management capacity for droughts, forest fires and sea-water intrusions
Financing
(83)with the problem of paying for environmental protection measures In the near term, this is mostly a problem of using existing financial and physical resources more efficiently In the long run, Viet Nam will need to develop more creative ways to ensure that the costs of environmental degradation are internalised and accounted for by those causing the degradation
10.6 Recommendations for action
Strengthen the institutional capacities of agencies with influence over environmental strategy and policy (such as MOSTE, DOSTEs, NEA, MPI, MARD and MOF), with particular emphasis on building environmental planning capabilities and inter-agency co-ordination
Strengthen commitment to environmental protection and management by improving understanding of the long-term costs of natural resource degradation through the increased use of cost-benefit analysis for projects under consideration
Support sustainable rural development and poverty alleviation by routinely incorporating environmental considerations into poverty reduction and rural development projects
Improve environmental management by enforcing minimum environmental standards and promoting self-regulatory tools, such as the promotion of voluntary compliance in the business community, more and better quality environmental journalism, and increased environmental education in primary and secondary schools Improve the quality and quantity of environmental data available, through support for an improved national environmental monitoring and reporting system This will, in turn, improve the quality of the State of the Environment reports as a means of better incorporating environmental concerns into Government decision-making
Build environmental and natural resource considerations into the next five-year plan and ten-year strategy for Viet Nam up to 2010
Strengthen the national capacity to make contingency plans for, and respond to, natural disasters by extending disaster management capacities to include drought, sea-water intrusions and forest fires, as well as improving the public information system for disseminating disaster information
Develop a donor partnership to support the forest sector and the shift towards a more programmatic focus for the Five Million Hectare Reforestation Programme, including sub-projects that address unsustainable forestry practices in critical upland areas
Make the reversal of coastal environmental and natural resource degradation a development priority for reasons of poverty reduction and biodiversity conservation, by implementing integrated coastal management projects on a pilot basis, and promoting partnerships among donors to help formulate common coastal management strategies
Encourage land-use planning in urban areas and industrial zones, with adequate space and facilities provided for wastewater treatment and hazardous waste management
Improve electrical energy coverage by supporting decentralised supply systems, and encourage sustainable energy use through the development of renewable energy sources and more efficient use
Promote the practical application of the principle that environmental costs should be more fully borne by those who cause them
(84)Chapter 11: Conclusions
Regaining the upward momentum of reform, investment and economic growth is certainly crucial for Viet Nam’s development into the next decade But what the analysis in this report consistently highlights is that for Viet Nam’s socio-economic development to be healthy, sustainable and competitive, and for economic growth to translate into human development, there is a need for developing practical, informed strategies, related human and institutional capacities and an enabling legal and regulatory framework that can translate intentions and policies into reality What this means is that as well as getting the practicalities of development and international integration right, a widely shared “philosophy of human development” that is both practical and equitable is also extremely important
The Government has unequivocally demonstrated that it possesses this commitment to improving the well-being of the people of Viet Nam by prioritising people-centred development as its overarching objective Viet Nam’s people, in turn, have reaped the benefits of this commitment and their lives are generally now vastly improved from just ten years ago, not only in material terms, but also in terms of greater opportunities and choices The progress in meeting many of the country’s own development targets, as well as its international development commitments made at the UN’s world development conferences is further testimony to the importance placed by Viet Nam on satisfying the needs of its people This commitment forms an excellent basis on which to further develop good governance of the development process There still remains some distance to travel, though, and a number of obstacles to navigate in order to create the conditions for Viet Nam to benefit more fully from its many advantages To this end, in addition to the issue-specific recommendations for action presented at the end of each chapter of this report, there are a number of generic recommendations highlighted below, which point to possible ways to navigate the next phase of Viet Nam’s development:
Focus on the people
At all stages and in all sectors of development planning, the needs and interests of people, and disadvantaged groups in particular, must continue to be prioritised The growth of opportunity, choice and well-being of the most poor, isolated and disadvantaged women and men, and environmental and cultural as well as economic sustainability must remain the benchmarks against which the success and benefits of development strategies are assessed It is also imperative that economic development is not planned without reference to the benefits and effects of economic plans on the society, culture and environment of the country Viet Nam has generally avoided this in the past, and must continue to guard against it Economic development must remain a means to the end of improving all-round the lives of the Vietnamese people—particularly the poorest and most disadvantaged members of society—and preserving their environment and heritage
Promote people’s participation in development
• Consider allowing more room for public information and discussion, not only to raise public awareness about important issues and to make Government more transparent and accountable, but also, importantly, to increase the quality of the policy debate and to garner support for policies and decisions Nurturing a competitive and open information environment is just as important for the healthy growth and development of the country as fostering principles of economic competition
• Policies, programmes and projects need to be designed with the input of those who will be directly affected by them in order to make these interventions effective and to reduce any potential negative impacts Reaffirm political will
(85)reform drive is vitally important to securing the investment, capital, allies and aid that are also important in stimulating Viet Nam’s development
Devise appropriate strategies
• The process of setting the Government’s short-, medium- and long-term priorities for the country is currently under way Defining clear, practical and far-sighted national priorities and the strategies that will address them is indeed a critical task that should be based on the specific situation and conditions of Viet Nam as well as build on the development experiences of other countries Deciding on the appropriate sequencing of reforms will also be necessary to ensure their success
• The Government should aim to devise complementary strategies for sustainable socio-economic development, international economic integration, public administration reform, rural development, poverty alleviation and sustainable development finance
• As well as making the policy adjustments and introducing the reforms necessary to prepare Viet Nam for increased interaction with the rest of the world, national strategies must also provide the framework, incentives, rules and regulations for both effectively exploiting the country’s unique comparative advantages as well as preserving the country’s unique heritage
Promote the private sector
Based on lessons learned in Viet Nam and other developing countries, enable and promote the private sector’s role in generating future growth, employment, incomes, domestic savings and the sustainability of the overall development process
Decentralise and devolve the responsibility for development
• Government will be much better able to fulfil its strategic leadership role as framework-provider and policy-maker if it delegates the responsibility and authority for certain tasks to local levels of Government and to other, non-Governmental actors, such as the private sector and civil society For this process to be effective and to reap benefits it will involve strengthening political belief in, and further commitment to, decentralisation and devolution as the most effective ways to manage public affairs and the responsibility for development In the case of decentralisation, it will also require substantial resources and investment in training local-level officials to manage a greater number and variety of responsibilities
• Effective and good governance of the country would benefit substantially from an increase in accountability at all levels of Government The Government has already expressed its firm commitment to this process, and, for example, has voiced its intention to root out corruption But to consistently ensure accountability will require introducing formal mechanisms and procedures that apply to all Government employees, at all levels of Government
Build human and institutional capacities
The human and institutional challenges posed by Viet Nam’s ongoing doi moi reforms involve not only the acquisition of new knowledge, skills and organisational rationales for those individuals and institutions responsible for facilitating change and implementing new reforms They also require a significant evolution in mindset to embrace a more accountable culture that is a prerequisite to effectively operate decentralised systems
Consolidate the legal and regulatory framework
• In line with the principle of the rule of law enshrined in Viet Nam’s Constitution, current efforts to put in place a comprehensive legal and regulatory framework and accompanying enforcement mechanisms need to be maintained and accelerated where possible, in order to put into place a transparent, rule-based guide to social, economic and political interaction that will promote accountability
• Existing laws need to be amended and new ones passed in order to regulate Viet Nam’s international economic integration and to comply with international obligations
Generate sustainable financial resources for development
(86)• Undertake regular, comprehensive Public Expenditure Reviews to reassess the allocation of expenditures in light of the Government’s development priorities
• Implement the “20/20 Initiative” by boosting both donor and Government allocations to basic social services spending in order to improve the welfare of the most needy sections of the population
• In preparing the next phase of its development strategy, the Government should guard against a reliance on foreign debt and liquid capital and aim as far as possible to generate its financing for development domestically, focusing on measures to increase domestic savings, in order to preserve sustainability, stability and sovereignty Improve data availability and quality
• Prioritise finding solutions to address the urgent need to improve the availability and quality of information, data and indicators required to make effective and strategic policy decisions
• Reduce the vulnerabilities and risks to the overall development process through further improved information on the financial health of domestic banks and their SOE clients, as well as on the quality of public expenditures • Address the need for more ethnically and sex-disaggregated data collected using sensitive methods • Build capacity, technical capabilities and awareness to promote a culture of reliable and open information
Institutionalise collaboration and partnership
• Enhance linkages, co-ordination and thereby also the synergies between Government ministries and agencies working in the same issue area, and likewise between donors and the Government, to maximise the efficient allocation of financial, human, knowledge and technical resources
• Promote Government ownership of ODA-funded projects by strengthening the capacity of the aid co-ordinating bodies and applying a programme approach
• Review and clarify the mechanism for aid co-ordination inside each Ministry, at both the central and provincial levels
• Pursue closer, more effective “partnership” between ODA and NGO partners, with the objective of progressively heading towards a programme approach in which Viet Nam’s development interests—and not donor interests—come first Encourage a graduation from diplomacy to constructive and frank debate between partners
Moving ahead: partnerships for further progress
The challenge of the CCA is to translate the recommendations offered into concrete actions that will support the Government and all of its development partners in working together towards further progress in improving human well-being in Viet Nam The analysis in this report offers a multitude of rich opportunities for both deepening existing partnerships and developing new partnerships in a wide variety of areas, and developing the capacities for improved governance to further improve human well-being Government-led partnerships for developing and implementing effective strategies, plans, reforms and policies will be essential to providing a broad framework for all development partners needed to guide comprehensive, coherent and well-balanced development, and meet the multitude of challenges facing Viet Nam in the first decade of the new millenium Partnerships for strengthening participation of the non-state sectors will be needed to ensure balanced and sustainable development Partnerships for further developing the flow of useful information, and increased transparency as a means for improving accountability, would contribute greatly to reducing isolation and risks, and increasing participation of all Vietnamese people in the development process Partnerships for an enabling and equitable legal and regulatory framework to guide responsible development would help underwrite the sustainability and stability of the development process Clearly there is no lack of rich opportunities for working together, but rather a need to prioritise, which in turn would be most effectively achieved through Government-led dialogue with all development partners, both national and international
(87)Some existing partnership groups
The following partnership groups (among others), anchored around national priorities and programmes, provide an ideal opportunity for the UN to continue a dialogue based on this Common Country Assessment and work closely with the Government and donors to form a consensus to implement a number of the recommendations contained in this report
Partnership groups for National Target Programmes are established in Forestry and Rural Development. • The Partnership to Assist the Poorest Communes (PAC):
This supports the Government’s 1,715 Poor Communes Programme The PAC includes donors and Government ministries and agencies, such as the Ministry of Planning and Investment (MPI), Ministry of Agriculture and Rural Development (MARD), Ministry of Labour Invalids and Social Affairs (MOLISA), and the Committee for Ethnic Minority and Mountainous Areas (CEMMA)
• The 5 Million Hectares Group supports the Million Hectares Forestry Programme The group consists of a number of donors and MARD, MPI, MOFI and State Bank of Viet Nam
A partnership group based on co-operation on a sectoral basis is now active in the Health sector, while a similar sectoral approach is emerging in water resource management where an informal donor support group is evolving towards a partnership group
• The Health Working Group has as its initial objective to develop a joint Health Sector Strategy The Health group brings the Ministry of Health (MOH) together with bilateral donors and multilateral agencies
Regional partnership groups geared toward increased collaboration on a regional basis are taking form in three areas: Ho Chi Minh City, Hai Phong/Quang Ninh Coastal region and Tra Vinh province
development dialogue of all development partners to reach a shared vision and objectives, and to offer guidance on priorities and related partnerships for future actions
This strategy will involve research and analysis on a number of topics, including the role of the State, the impact of globalisation and integration, economic development and social equity, and rural development The strategy will help to provide a timeline for the sequencing of reforms and set medium-term development objectives for the country Other work is being carried out at the sectoral level, including development of the next Environmental Action Plan, and National Strategy on Public Administration Reform, for example Taken together, this work being carried out by the Government provides an opportunity to discuss in detail the recommendations contained in this CCA and, where appropriate, to provide input into the national plans and strategies
(88)Acronyms ABE Alternative Basic Education
ADB Asian Development Bank
AIDS Acquired Immune-Deficiency Syndrome ANC Ante-Natal Care
AFTA ASEAN Free Trade Area
APEC Asia-Pacific Economic Co-operation ARI Acute Respiratory Infection
ASEAN Association of South-East Asian Nations CBM Community-Based Monitoring
CMC Child Malnutrition Control
CPCC Committee for Protection and Care of Children CPR Contraceptive Prevalence Rate
DCC Day-Care Centre
DSI Development Strategy Institute of Ministry of Planning and Investment ECC Early Childhood Care
EFA Education for All EOC Essential Obstetric Care
EPI Expanded Programme on Immunisation EPZ Export Processing Zone
FAO Food and Agricultural Organisation of the United Nations FDI Foreign Direct Investment
FIE Foreign-Invested Enterprise FP Family Planning
GDP Gross Domestic Product GSO General Statistical Office
HEPR National Programme for Hunger Eradication and Poverty Reduction HIV Human Immune Deficiency Virus
ICPD International Conference on Population and Development IDD Iodine Deficiency Disorder
IDU Injecting Drug User
IEC Information-Education-Communication ILO International Labour Organisation IMCI Integrated Management of Child Illness IMR Infant Mortality Rate
ISO International Standard Organisation IUD Intra-Uterine Device
IZ Industrial Zone
LEB Life Expectancy at Birth LUC Land-use Certificate
(89)MOET Ministry of Education and Training MOF Ministry of Fisheries
MOLISA Ministry of Labour, Invalids and Social Affairs MOH Ministry of Health
MPDF Mekong Project Development Facility MPI Ministry of Planning and Investment
NCPFP National Committee for Population and Family Planning NGO Non-Governmental Organisation
NIN National Institute of Nutrition ODA Official Development Assistance PAR Public Administration Reform PER Public Expenditure Review PIP Public Investment Programme PCF People’s Credit Funds
RTI Reproductive Tract Infection
SMEs Small- and Medium-sized Enterprises SOE State-owned Enterprise
SRV Socialist Republic of Viet Nam STI Sexually Transmitted Infection
UNAIDS Joint United Nations Programme on HIV/AIDS UNDCP United Nations Drug Control Programme UNDP United Nations Development Programme UNFPA United Nations Population Fund
UNICEF United Nations Children’s Fund
UNIDO United Nations Industrial Development Organisation UPE Universal Primary Education
USI Universal Salt Iodinisation VAT Value-added Tax
VBP Viet Nam Bank for the Poor VLSS Viet Nam Living Standards Surveys
WB World Bank
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Tran Thu Hang (1999) Viet Nam’s Trade in the Course of International Integration, in Vietnamese Studies, No 2, Ha Noi
Mekong Project Development Facility (MPDF) (1999) Viet Nam’s Undersized Engine: A Survey of 95 Larger Private Manufacturers, Ha Noi
The Services Group (TSG) (1998) Recommendations to Enhance the Vietnamese Industrial Zone Regime, Virginia
UNDP (1998) East Asia: From Miracle to Crisis—Key Lessons for Viet Nam, Ha Noi UNDP (1999) Human Development Report, New York
(91)UNIDO & Central Institute for Economic Management (CIEM) (1999a) Trade and Industry Policies for Economic Integration, Ha Noi
UNIDO & CIEM (1999b) Transnational Corporations and Host Country Development, Ha Noi
UNIDO & Development Strategy Institute (DSI) (1997) Viet Nam: a Medium-term Industrial Strategy, Ha Noi UNIDO & DSI (1999a) Improving Macroeconomic Policy and Reforming Administrative Procedures to Promote Development of Small and Medium Enterprises in Viet Nam, Ha Noi
UNIDO & DSI (1999b) Viet Nam: Industrial Competitiveness Review, Ha Noi World Bank (1998) Viet Nam: Rising to the Challenge, Ha Noi
Chapter 3: Poverty
ADUKI (1995) Poverty in Viet Nam, SIDA, Stockholm
Dollar, D., Glewwe, P & Litvack, J (eds) (1998) Household Welfare and Viet Nam’s Transition, World Bank, Washington
General Statistical Office (GSO) (1993) Rich and Poor Survey, Ha Noi GSO (1994, 1996) Multipurpose Household Surveys 1994, 1996, Ha Noi
GSO (1994, 1999a) Viet Nam Living Standards Surveys I (1992/1993) and II (1997/98), Ha Noi GSO (1999b) Population and Housing Census (preliminary data), Ha Noi
Haughton, D et al (eds) (1999) Health and Wealth in Viet Nam: An Analysis of Household Living Standards, Institute of South-east Asian Studies, Singapore
Ministry of Labour, Invalids and Social Affairs (MOLISA) (1999) Annual reports of the Office of the National Target Programme for HEPR, Ha Noi
OXFAM GB, Action Aid, SCF UK & MRDP (1999) Participatory Poverty Assessments, Ha Noi
Socialist Republic of Viet Nam (SRV) (1998) Basic Social Services in Viet Nam: An Analysis of State Public and Donor Expenditures, Ha Noi
SRV et al (1999) Attacking Poverty: Viet Nam Development Report 2000, a joint report of the Government-Donor-NGO working group, Ha Noi
Thompson, K (1999) Social Safety Nets for Vulnerable Groups in Viet Nam, ILO report, UNDP-funded project
UNDP, UNFPA & UNICEF (1995) Poverty Elimination in Viet Nam, Ha Noi
(92)UNDP (1997b) Some Lessons Learned in Supporting the Transition from Poverty to Prosperity, Ha Noi UNDP (1998) Overcoming Human Poverty, UNDP Poverty Report 1998, New York
UNDP (1999a) Human Development Report, New York
UNDP (1999b) Capacity Assessment for Viet Nam’s National Target Programme for HEPR, Ha Noi UNDP (1999c) Report on Basic Social Services in Viet Nam, Ha Noi
World Bank (1999) World Development Report 1998/99, New York
Chapter 4: Governance
Government Committee for Organisation and Personnel (GCOP) (1998) Overview of the Socio-economic Situation and Implementation of Public Administration Reform in Viet Nam, Ha Noi
National Assembly Office (NAO) (1996) Ordinance on the Concrete Tasks and Powers of the People’s Council and People’s Committee at Each Level, Ha Noi
NAO (1999a) Law on Organisation of the National Assembly, Ha Noi NAO (1999b) Law on Organisation of the Government, Ha Noi NAO (1999c) Law on Organisation of the People’s Court, Ha Noi NAO (1999d) Law on Organisation of the People’s Procuracy, Ha Noi
NAO (1999e) Law on Organisation of the People’s Council and People’s Committee, Ha Noi NAO (1999f) 1992 Constitution, Ha Noi
NAO (1999g) Budget Law, Ha Noi
Socialist Republic of Viet Nam (SRV) (1995) National Public Administration Reform Programme, Ha Noi SRV (1997) National Plan of Action for the Advancement of Women, Ha Noi
SRV (1998) Decree 29/CP on Grassroots Democracy Regulations, Ha Noi
Chapter 5: Population
Cuong, D.M & Vinh, D.Q (1998) Social Adjustment in Globalisation Contact, the Role of Social Actors, Ha Noi
Dang Anh, S Goldstein & McNally, J (1997) Development and Internal Migration in Viet Nam, International Migration Review, Vol 27, No 2, pp312-337
(93)National Committee for Population and Family Planning (NCPFP) (1996a) Population and Family Planning Programme in Viet Nam, Ha Noi
NCPFP (1996b) Report, Review and Assessment of Population Policies in Viet Nam, Ha Noi NCPFP (1997) Demographic and Health Survey, Ha Noi
Parliamentary Committee for Social Affairs (1999) Viet Nam: Along the ICPD Path, Ha Noi
Troung Si Anh, Knodel, J., Lam, D & Friedman, J (1998) Family Size and Children’s Education in Viet Nam, Demography, Vol 35, No 1, pp57-70
UNAIDS (1999) Progress Report 1998, Ha Noi
UNDP (1998) The Dynamics of Internal Migration in Viet Nam, Ha Noi UNFPA (1996) Programme Review and Strategy Development Report, Ha Noi
Chapter 6: Labour
Chandarasi, S & de Silva, A (1996) Globalisation, Employment and Equity: the Viet Nam Experience (unpublished)
Dao Quang Vinh (1999) Country Paper: Viet Nam (paper prepared for the ILO Asia and Pacific Roundtable on the Roles of Enterprises and Society Partnerships), Ha Noi
General Statistical Office (GSO) (1999) The Second Viet Nam Living Standards Survey 1997/98, Ha Noi ILO (1998) Inter-Regional Programme to Support the Design and Implementation of Tripartite National Occupational Safety and Health Policies and Measures (draft report)
ILO (1999) Decent Work Report of the Director-General to the 87th Session of the International Labour Conference, ILO Geneva
ILO/MOLISA (1999) Report and Recommendations of an ILO/MOLISA Workshop on Agrarian Transition in Viet Nam: Employment and Poverty Alleviation, Ha Noi
Institute of Labour, Science and Social Affairs (ILSSA) (1998) Centres for Employment Services: Status and Solutions, Ha Noi
ILSSA (1999) Profile on Child Labour in Viet Nam (draft report), Ha Noi Jamal, V & Jansen, K (1998) Agrarian Transition in Viet Nam, ILO Geneva
Krishnamurty, J (1999) Employment and Labour Market Social Safety Nets for Vulnerable Groups in Viet Nam (working paper), ILO Bangkok
(94)Ministry of Labour, War Invalids and Social Affairs (MOLISA) (1996, 1997a, 1998 and 1999a) Status of Labour and Employment in Viet Nam, Ha Noi
MOLISA (1997b) Quinquinial Report 1992-1996, Ha Noi
MOLISA (1999b) National Week of Industrial Safety and Health, Ha Noi
Ministry of Planning and Investment (MPI) (1998) Annual Report: Department of Labour, Culture and Social Affairs, Ha Noi
Oudin, X (1998) Employment and Unemployment, Ha Noi
Pham Chi Lan (1996) Vietnamese Women in Business, VCCI Ha Noi
Research Centre for Women Workers (1998a) Summary Report: Results of a Survey on Employment and Life, Working Conditions, Labour Safety and Health of Women Workers in Industrial Enterprises, MOLISA Ha Noi
Research Centre for Women Workers (1998b) Female Labour Force in Industry in Viet Nam in Period of Renovation, MOLISA Ha Noi
Socialist Republic of Viet Nam (SRV) (1999a) The Second National Report on the Implementation of the UN Convention on the Elimination of all Forms of Discrimination Against Women, Women’s Publishing House, Ha Noi
SRV et al (1999b) Attacking Poverty: Viet Nam Development Report 2000, a joint report by the Government-Donor-NGO working group, Ha Noi
Thompson, K (1999) Social Protection and Social Safety Nets (internal working paper), ILO Bangkok UNIDO (1998) Rural Industrial Development in Viet Nam: Strategy for Employment Generation and Regionally Balanced Development (draft report), Ha Noi
_ Chapter 7: Health and Nutrition
Dahlgren, G (1999) Global Health Reform FAO (1998) ESN—Nutrition Country Profiles
General Statistical Office (GSO) (1997) Implementation of Mid-decade Goals for Vietnamese Children by 1995, Ha Noi
Ministry of Health (MOH) (1996) Strategic Orientation for People’s Health Care and Protection in the Period of 1996-2000 and Viet Nam’s National Drug Policy, Ha Noi
MOH & UNICEF (1999) Annual Monitoring Review Workshop on Community-based Monitoring Implementation, Ha Noi
MOH (1998a) Health Statistics Year Book 1997, Ha Noi
(95)MOH (1998c) EPI Annual Report, Ha Noi MOH (1998d) ARI Annual Review, Ha Noi
MOH (1999) Health Statistics Year Book 1998, Ha Noi MOH HIV bulletins
Narula, M (1997) Viet Nam Revolving Drug Fund Study,Department of Health Policy and Planning, Tokyo University
National Committee for Population and Family Planning (NCPFP) (1997) Viet Nam Demographic and Health Survey 1997, Ha Noi
NIHE & MOH (1998) EPI National Review, Ha Noi
NIN & MOH (1998a) National Nutrition Survey, (draft report), Ha Noi NIN & MOH (1998b) Investment for Child Nutrition in Viet Nam, Ha Noi
Socialist Republic of Viet Nam (SRV) (1998) Monitoring the 20/20 Initiative:Basic Social Services in Viet Nam: An Analysis of State Public and Donor Expenditures,Interim report of preliminary findings, Ha Noi Thai Binh Medical College (TBMC) (1996) Baseline Survey on Household Latrines in Five Provinces of Central and Northern Viet Nam, Ha Noi
UNAIDS & WHO (1998) Viet Nam: Epidemiological Factsheet on HIV/AIDS and Sexually Transmitted Diseases, Ha Noi
UNAIDS (1999) Progress Report 1998, Ha Noi
UNICEF (1999) The State of the World’s Children, Ha Noi WHO Western Pacific Region Health Data Bank
Chapter 8: Basic Education
Bray, M (1996) Counting the Full Cost: Parental and Community Financing in Asia, Washington DC Evans, K (1998) The Affordability of Supplies for Primary Education in Viet Nam, UNICEF, Ha Noi General Statistical Office (GSO) (1999) Second Viet Nam Living Standards Survey 1997-98, Ha Noi Ministry of Education and Training (MOET) (1994) Transition of Children to School,National Institute for Education and Science, Ha Noi
MOET (1997) Educational Statistics for the 1997-1998 School Year, Ha Noi
(96)MOET (1998c) Annual School Report, Department of Primary Education, Ha Noi
MOET (1998d) Education Statistical Data, Education Management Information Centre, Ha Noi MOET (1999a) Annual Record Book, Department of Primary Education, Ha Noi
MOET (1999b) Report on the Assessment of Education For All in Viet Nam 1990-2000, National Committee for EFA-2000 Assessment, Ha Noi
MOET (1999c) 1997-98 School Year Report, Education Management Information Centre, Ha Noi MOET (1999d) Education Statistics in Brief 1998-99, Ha Noi
OXFAM GB, Save the Children Alliance & UNICEF (1998) Beyond 20/20 The Vulnerable Family Challenges for Education, Ha Noi
Radda Barnen (1998) Children at Risk—Prevention of Exclusion, Stockholm
UNDP (1998) Monitoring the 20/20 Initiative, Basic Social Services in Viet Nam: An Analysis of State Public and Donor Expenditures, Ha Noi
UNDP (1999) Human Development Report 1999, New York
UNDP, UNFPA & UNICEF (1998) Expanding Choices for the Rural Poor, Ha Noi
UNDP & UNICEF (1996) Catching Up: Capacity Development for Poverty Elimination in Viet Nam, Ha Noi UNICEF (1994a) Viet Nam: A Situation Analysis 1994, Ha Noi
UNICEF (1994b) Towards Universalised Primary Education in Viet Nam: A Study of the Cost-effectiveness of the Primary Education System, Ha Noi
Socialist Republic of Viet Nam (SRV) (1999) First Periodic Report on the Implementation of the Convention on the Rights of the Child, 1993-1998, Ha Noi
World Bank (1996) Viet Nam Education Financing Sector Study, Ha Noi
_ Chapter 9: Rural Development
Dubois, O & Morrison, E (1998) Sustainable Livelihoods in Upland Viet Nam: Land Allocation and Beyond, Forest and Land Use Series, No 14, International Institute for Environment and Development, London Fforde, A (1998) Economic Development and Organisation in Viet Nam’s Countryside: Rural Institutions, the New-Style Co-operatives and Implications for the Restructuring of the Ministry of Agriculture and Rural Development, Ha Noi
FAO (1998) Crop Diversification and Export Promotion, (draft report), FAO/ADB Co-operative Programme, Ha Noi
(97)International Food Policy Research Institute (IFPRI) (1998) Policy Simulation for Agricultural Diversification, Ha Noi
IMF (1999) Viet Nam Statistical Appendix May 1999, Washington DC
Johnson, A (1996) Micro-finance in Viet Nam: A Collaborative Study Based upon the Experiences of NGOs, UN Agencies and Bilateral Donors, Ha Noi
Kerkvliet, B & Porter, J.D (eds) (1995) Viet Nam’s Rural Transformation, Institute of South-east Asian Studies, Singapore
Ministry of Agriculture and Rural Development (MARD) (1997) Rural Development in Viet Nam: A Strategic Framework for Planning and Programme Development, (draft report), Ha Noi
Ministry of Planning and Investment (MPI) (1997) Sector Review on Agriculture in Post-Transition Viet Nam: Opportunities and Challenges, supported by UNDP and FAO, Ha Noi
Nguyen Viet Hai (1998) Livestock Production in Viet Nam, Ha Noi
OXFAM GB (1997) Gender Issues in Land Allocation: A Case Study in Lung Vai Commune, Ha Noi Perkins, Wriggley & Dapice (1998) Rural Industrialisation: Various Papers, Ha Noi
Socialist Republic of Viet Nam (SRV) (1998) Government Direction on Agriculture and Rural Development, Report prepared for the 1998 Consultative Group Meeting, Ha Noi
UN (1998) Expanding Choices for the Rural Poor, Ha Noi
UNDP (1998a) Viet Nam Agriculture: A Review of Trends and Issues, Ha Noi UNDP (1998b) Rural Development Strategy Document, Ha Noi
UNDP & UNICEF (1996) Catching up: Capacity Development for Poverty Elimination in Viet Nam, Ha Noi UNIDO (1999) Rural Industrial Development in Viet Nam: Strategy for Employment Generation and Regionally Balanced Development, (draft report), Ha Noi
UNOPS (1996) Successfully Achieving Decentralisation and Participation: A Case Study from Viet Nam of Tuyen Quang Province, Kuala Lumpur
World Bank (1998) Viet Nam: Advancing Rural Development from Vision to Action, Report prepared for the 1998 Consultative Group Meeting, Ha Noi
Chapter 10: Environment and Natural Resource Management
Dubois O & Morrison, E (1998) Sustainable Livelihoods in Upland Viet Nam: Land Allocation and Beyond, Forest and Land Use Series No.14, International Institute for Environment and Development, London
(98)National Environment Agency (NEA) & Asian Development Bank (ADB) (1998) Viet Nam National Strategy for Hazardous Waste Management, Ha Noi
UN (1998) United Nations Development Assistance Framework: Issues Papers on Follow-up in Viet Nam to Major World Conferences, Ha Noi
UNDP (1999) A Study on Aid to the Environment Sector, (draft report), Ha Noi
Warfvinge, H & Ngo Sy Hoai (1998) National Paper on the Socialist Republic of Viet Nam, (draft report), New York