The investment aims to reduce the number of poor households from 22 percent nationwide last year, according to the new poverty line of VND260,000 a month for city-dwellers, to 11 percent by 2010 - or a 50-percent reduction in poverty-stricken families in five years. This will also result in an improvement in the living standards of poor families, Ms Hang said.

By 2010, most poor households that have too little or no fields to cultivate will be provided with land, or they will be helped to change to other occupations.

Ms Hang said the National Programme on Poverty Reduction will prioritise mountainous areas where the poverty ratio is high, but will also provide funds for developing infrastructure in poor coastal and island communities. Vietnam had successfully concluded the national programme on poverty alleviation, she added.

By the end of 2005, the ratio for poor households had been reduced to less than 7 percent, following the former poverty line set at earnings of VND150,000 a month for city-dwellers. On average, the ratio was lowered by 2 percent annually from 2001 to 2005, which exceeded the target set at the 9^th National Party Congress to reduce the poor household ratio to lower than 10 percent.

By implementing the State's investment programmes, the infrastructure of poor communes has been upgraded and hunger has basically been wiped out.

The total capital of VND40.9 trillion earmarked for hunger eradication and poverty alleviation, includes Programme 143 (aiming at creating jobs, reducing poverty and eradicating hunger), Programme 135 (for socio-economic development in extremely poor communes) and other international projects. The National Programme for Hunger Eradication and Poverty Alleviation will contribute VND21 trillion to the total.

Ms Hang said since 1993, the country has raised the poverty line four times. According to the latest poverty line, the country had more than 4 million poor households by the end of last year.

By applying the new poverty line, Vietnam will have to face and deal with many challenges and difficulties because the country is still poor, and the average income and spending per capita are still low.

The gap between the development of urban and rural areas, between regions, and between groups of residents is now showing a tendency to widen, she said, and the annual budget for hunger eradication and poverty alleviation remains small. It constitutes only 2 percent of the total State budget. Moreover, the ratio of poor people among the ethnic minorities is also still high.

Minister Hang said the National Programme for Hunger Eradication and Poverty Alleviation will give land to poor ethnic minority households for building houses, to the tune of at least 200 square metres per household.

Every poor ethnic minority family that does not have a house, or that lives in temporary shelters, will receive VND5 million from the State to help them build houses. It is expected that some 400,000 poor households will receive help in this regard, including 300,000 poor ethnic people.

Currently, poor households still face difficulties acquiring capital for production and doing business. However, Ms Hang said the State will provide the poor with sources for credit. From this year, poor households, the disabled and ethnic minorities will be able to borrow capital at lower interest rates than those in the open market, which range from 20 to 30 percent.