Poverty reduction likened to a revolution in Vietnam

Hunger eradication and poverty reduction can be considered as one of the sound achievements seen in Vietnam over nearly 40 years of implementing the Đổi Mới (Renovation) policy. Any development would be meaningless if it only concentrated on urban areas without reaching remote and rural regions. The poverty reduction policy serves as a fundamental, ongoing priority in the Vietnamese socio-economic development strategy, driven by the Party and State.

A rise in Human Development Index

Once among the world’s poorest countries, Vietnam has transformed itself into one of the fastest-growing economies, with its GDP per capita increasing 40-fold from 1989 to 2023. More than 40 million people have escaped poverty in two decades since 1993, whilst the multidimensional poverty rate has been halved in 15 years since 2005.

“There have been remarkable changes across the country and in the lives of the Vietnamese people,” remarked Deputy Foreign Minister Do Hung Viet during a dialogue session on Vietnam’s Universal Periodic Review Cycle IV National Report of the UN Human Rights Council, in New York in May.

Most Venerable Thich Tri Vien, head of the Buddhist community in the United States, returned to Vietnam for the first time in 1996 after 15 years of residing abroad. He has since visited his homeland more than 40 times, travelling the length and breadth of the country to explore changes with his own eyes.

“While the country still faces challenges, only by returning frequently can one truly feel the rapid development, especially in terms of transportation infrastructure. Everywhere I go, I find it convenient, even in rural areas like my hometown in Binh Dinh,” said the dignitary.  

His impressions echo those of many who visit various regions across the country, including remote areas. The rural economic and social infrastructure has made remarkable progress, transforming the rural landscape and meeting the essential needs for production and daily life with access to electricity, roads, schools, clinics, markets, and community centres.

Such a transformation vividly reflects the collective efforts of the Party, the State, and the people to support the poor with the clear goal of “leaving no one behind”. In recent years, hundreds of low-income households in various localities have voluntarily submitted requests to relinquish poverty assistance in favour of others. People now often feel hesitant to identify as low-income households, choosing instead to overcome challenges and rise out of poverty on their own.

In 1993, the Vietnamese poverty rate stood at over 58%. However, by 2021 this figure had dropped to 2.23%. The GDP per capita also increased significantly from just US$185 in 1993 to US$4,284 by the end of 2023. The state funding allocated to poverty reduction also rose considerably, from VND200 billion in 1993 to VND12 trillion in 2020.

Under the National Strategy for Rural Clean Water Supply and Sanitation till 2030 with a vision towards 2045, Vietnam aims to have 65% of its rural population accessing clean water meeting regulatory standards, with a minimum of 60 litres per person per day by 2030. The proportion of households with access to electricity has also increased, reaching 99.5% in 2022, with the urban-rural gap in access narrowing from a 1.3% difference to just 0.1% between 2018 and 2022.

According to the latest UN Development Program (UNDP) report, Vietnam’s Human Development Index ranking rose from 115 to 107, placing it among countries with a high human development index.

First multidimensional poverty approach in Asia

Vietnam is the first country in Asia to adopt a multidimensional poverty standard. As one of the first 30 nations in the world and the first in Asia to implement this standard, it ensures minimum living conditions whilst measuring deprivations across six dimensions, namely employment, healthcare, education, housing, clean water and sanitation, and information access.

The 13th National Party Congress emphasised that “continuing to implement comprehensive solutions for multidimensional, inclusive, and sustainable poverty reduction,” with a goal of reducing the multidimensional poverty rate by 1% to 1.5% annually. To strengthen poverty reduction efforts, the Party’s Secretariat issued a directive in 2021 to reinforce the Party’s leadership in sustainable poverty reduction through 2030. These resources are therefore crucial to achieving sustainable development goals.

During the 2021-2025 period, alongside the two ongoing national target programs on sustainable poverty reduction and new rural development, the National Assembly has approved the implementation of an additional National Target Program for Socio-Economic Development in Ethnic Minority and Mountainous Areas, set to run from 2021 to 2030. The Politburo has also issued six resolutions for each of the six regions across the country, outlining socio-economic development directions that prioritise national defence and security up to 2030, with a vision forward to 2045, specifying sustainable poverty reduction targets for each region.

According to Deputy Minister of Labour, Invalids, and Social Affairs Le Van Thanh, the 2021-2025 Poverty Reduction Program has fundamentally changed in terms of goals and requirements, with higher demands than in previous phases.

“Poverty reduction was already challenging before; this phase is even tougher, with higher expectations. Beyond income, there is now a need to reduce deficits across six basic social services. The support mechanism has completely shifted from unconditional to conditional assistance, with a focus on the poorest core regions of the country. Therefore, poverty reduction targets now aim not only at income but also broader, more inclusive improvements,” said Deputy Minister Thanh.

As of 2023, Vietnam has gone through halfway in its sustainable poverty reduction program for the 2021 to 2025 period. After three years of implementation, initial results have been positive, with the annual poverty reduction rate consistently meeting or exceeding targets set by the 13th National Party Congress, the National Assembly, and the Government. Ten particularly disadvantaged communes along coastal and island areas have escaped poverty, while the quality of life for poor and near-poor households, particularly in core poverty regions, has notably improved.

Challenges lying ahead

While internationally recognized, poverty reduction in Vietnam still faces many challenges. United Nations Secretary-General Antonio Guterres, during his 2022 visit to Vietnam, praised these outcomes as clear evidence of the resilience and efforts of the Vietnamese people, and of people-centered development policies.

At the end of his 10-day visit to Vietnam in late 2023, the UN Special Rapporteur on the Right to Development, Surya Deva, praised the government’s efforts in poverty reduction, job creation, and social welfare enhancement.

“Despite the negative impacts of the COVID-19 pandemic and conflicts, Vietnam has made impressive progress in multidimensional poverty reduction. It is also making strides in achieving Sustainable Development Goals and reducing emissions to meet the net-zero emissions commitment by 2050,” he stated.

Referred to as ‘a revolution’, Vietnam’s poverty reduction program has been recognized by countries and international organizations as a bright spot, making it the only country in Asia to implement a multidimensional, inclusive, and sustainable poverty reduction program. According to the Global Multidimensional Poverty Index (MPI) report released by the United Nations Development Program and the Oxford Poverty and Human Development Initiative on July 15, 2023, Vietnam is one of the 25 countries that has halved its MPI within 15 years.

The MPI, introduced by the UNDP in the Human Development Report in 2010, replaces the previous aggregate poverty measurement method with additional dimensions such as health, education, housing, drinking water and sanitation, and information. This provides a more comprehensive assessment of each country’s poverty reduction outcomes, but also imposes strong demands for reforming poverty reduction policies toward sustainability. Consequently, some countries have yet to adopt the MPI or provide sufficient data as required by the formula.

On April 28, 2022, the World Bank (WB) published the report assessing poverty and equality in Vietnam, noting that “the progress Vietnam has achieved in less than half a century since the end of the war in 1975 is nearly unprecedented.”

“The recorded achievements do not mean that Vietnam will stop its efforts in promoting and protecting human rights, as we still face many difficulties and challenges. Although the country has made remarkable achievements in poverty reduction, there are still 800,000 poor households. The wealth gap between regions and demographic groups persists. The rate of malnutrition among children under five years old remains high,” stated Deputy Foreign Minister Do Hung Viet at the UN forum in May 2024.

According to experts, the results of poverty reduction in Vietnam are not yet truly sustainable, and the risks of falling back into poverty and new poverty emerging are still high. Additionally, disparities in living standards, access to basic services, market access, and employment opportunities between localities, regions, and demographic groups have not significantly narrowed. In some areas, living conditions remain difficult, and the poverty rate is still high, especially in ethnic minority and mountainous regions. Poverty reduction among ethnic minority groups is still unsustainable. Surveys show, 20% of ethnic minority households that escaped poverty fell into the trap again within just two years.

Moreover, while social assistance has been increased, it remains low compared to the minimum living standards of the people. The COVID-19 pandemic, climate change, urbanization trends, aging populations, income and living standard disparities, and labour migration present significant challenges to social welfare and sustainable poverty reduction.

Meanwhile, the National Target Program for Sustainable Poverty Reduction for the 2021-2025 period aims to maintain a poverty reduction rate of 1.0 - 1.5% per year; the poverty rate among ethnic minorities is targeted to decrease by over 3.0% per year; and 30% of poor districts and 30% of especially difficult communes in coastal, island, and low-lying areas are expected to escape poverty by 2025. To achieve this goal, experts believe that more innovative and creative approaches need to be adopted in implementing the program, with practical and effective poverty reduction solutions.

Although there is still much work ahead, with a strong commitment to “leaving no one behind,” Vietnam will persist in implementing multidimensional poverty reduction policies to better ensure the livelihoods of certain population segments, helping the poor to rise and escape poverty sustainably.