According to Dr Nguyen Hai Huu, director of the Social Welfare Department, the Ministry of Labour, Invalids and Social Affairs, the poverty reduction programme has attained great results over the past five years. Awareness of and responsibility for poverty reduction have been raised, poverty reduction movements have been launched and many targets in the programme have been achieved.

340,000 poor households escape poverty
Over the past years, a series of poverty reduction policies carried out in all provinces with fundings from different financial resources have remarkably changed the poverty situation in all areas, including remote mountain and island areas. The poverty rate dropped sharply from 30 percent in 1992 to 8.3 percent in 2004, then to below 7 percent in 2005. On average, 340,000 households escape poverty every year.

Vietnam already achieved the poverty reduction targets one year ahead of schedule. Most importantly, the quality of life of people living in poor villages has improved, especially the life of ethnic minority people and women. The poverty reduction programme has set up a fund to provide free medical check-up and treatment for poor people.

However, Dr Nguyen Huu Hai said, a certain number of poor people still have a tendency to wait for assistance from the State. They do not want to escape poverty themselves. In addition, due to the “disease of achievement”, some localities have reported poverty rate lower than the actual figure, making a segment of poor people fail to access preferential treatment from the poverty reduction policy, and therefore causing misunderstanding about the State policy.
As a result of incorrect reporting, many poor households in several localities cannot enjoy benefit from the national poverty reduction programme.

According to the new poverty line, by the end of 2005, Vietnam had approximately 3.9 million poor households, making up 22 percent of the country’s total figure. The north-western and Central Highlands regions recorded the highest poverty rate of 42 and 38 percent respectively, while the figure in the south-eastern region was merely nine percent.   

Restrictions and challenges
Vietnam is likely to experience non-food poverty in the 2006-2010 period, while food poverty will prevail among ethnic groups in the Central Highlands, north-western and south-western regions.

There are three major causes leading to poverty, namely unfavourable natural conditions (uneven ground, inconvenient transportation, and harsh weather); a chronic lack of land, capital, business knowledge, workers and old farming practices and customs; and inappropriate policies and mechanisms.

According to experts, the widening gap in terms of per capita income and living conditions between rich and poor, urban and rural areas and between economic regions is the biggest challenge for Vietnam in reducing the poverty rate in the next five years. 

Statistics show that the gap between the 10 percent of the richest and 10 percent of the poorest increased from 12.5 percent in 2002 to 13.5 percent in 2004. The disparity index in terms of the living conditions between urban and rural areas ranged between 5-7 times.

The second challenge is that the pace of poverty reduction will slow down due to impact of economic growth, integration, natural disasters and macro-economic policies. The proportion of the poor ethnic people remains high, making up 36 percent of the total number of the poor. In addition, there is an increasing number of the poor among the immigrant population and as a result of urbanisation.

Experts also warn of considerable risks of poverty relapse due to natural disasters, epidemics, price fluctuations, impact of Vietnam’s coming accession to the World Organisation and the development of the market economy. The poor will find it more difficult to get jobs due to the rapid development of scientific and technological advances and the unequal development between regions.