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A recent research work by two non-governmental organisations, Oxfam and Action Aid, said that Vietnam’s current trial poverty lines are still too low. What figures are appropriate?

Under the Prime Minister’s instruction on adjusting poverty standards in 2006-2010, the Ministry of Labour, War Invalids and Social Affairs and related agencies compiled a new scheme on poverty lines based on 2008 prices.

Accordingly, families that earn less than 300,000 dong per person in rural and 390,000 dong in urban areas per month are considered poor. This standard is being applied on a trial basis.

Oxfam’s Vietnam Director Steve Price-Thomas and coordinator Le Kim Dung talk about the issue.

Why is it important to change the poverty threshold?

Steve Price-Thomas: Because the poor have some certain rights in getting access to social services like health care and other rights. If your family’s income is 500,000 dong per month, which is very low for a family in a city at present, but that level is still higher than the current poverty line of 390,000 dong per urban family per month, you are denied access to some preferential services for the poor. If the line is adjusted, there will be more poor people and they will be assisted further.

Moreover, municipal governments need to know how many poor people they have and where they live to have plans in supplying services to their residents.

Le Kim Dung: The change of the poverty line is needed to accurately reflect actual life expenditures. For example, with 390,000 dong one could buy 20kg of rice five years ago but now he can buy only 10kg. Thus, the current poverty standard doesn’t reflect the increase of prices and inflation.

What prevents cities from raising the poverty line?

Steve Price-Thomas: HCM City did a good job when it raised the poverty line to one million dong per month. Some other cities cannot do like HCM City because of budget difficulties. This means that raising the poverty standard is a process, but it is important that municipal governments apportion the budget and prepare resources to realise their responsibility to the poor.

Le Kim Dung: Local governments clearly understand that the poverty standard is outdated but with restricted resources, they cannot change it. In addition, it depends on their priorities.

Oxfam and ActionAid’s report said that poor immigrants suffer from the unchanged poverty line. Could you clarify this point?

Steve Price-Thomas: Our research shows that immigrants who don’t register their residency with local governments (for example vendors, motorbike taxi drivers) often face more difficulties in accessing social services such as schooling services for their children and health care. Their houses often don’t have stable water supplies and power supply services or they have to pay more for power, water and rubbish collection services. Residency registration, therefore, is the common concern of immigrants and municipal governments.

Municipal governments also don’t know exactly who lives where to provide social services and necessary social welfare for them.

Le Kim Dung: The new Residence Law is an important stride, which opens opportunities for immigrants, but our research works reveal that there are difficulties in the implementation of that law.

For example, in principle, immigrants have the right to register residence but they have to show house rent contracts, which none of the immigrants that we interviewed had.

In principle, their children have the right to join primary schools free of charge but schools in cities are overloaded for even local residents, let alone immigrants.

What does Oxfam suggest to assist poor people in cities?

Steve Price-Thomas: I think the Vietnamese government’s stimulus package should directly help the poor and create new jobs, for example investing in small-scale infrastructure projects. The poor are the group of people who don’t have a strong voice in society so the government needs to pay attention to the needs of this group.

To have suitable and timely policies, the government needs to have an accurate picture through other research works, such as research of the General Statistics Office. The government also needs to prepare human resources and financial sources to help municipal governments provide services for the increased number of poor people when the poverty standard is raised.

At the recent National Assembly session, Minister of Labour, War Invalids and Social Affairs Nguyen Thi Kim Ngan said that the ministry would submit the official new poverty line to the government soon.

Through surveys in big cities in Vietnam, Oxfam found out that even though the poverty standard for urban residents has been raised from 260,000 to 390,000, it doesn’t truly reflect price increases and their impacts on people’s lives.

Source: VietNamNet/TT

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Urban Poverty Dynamics

Typical of East Asian countries, poverty is concentrated in rural areas in Vietnam, particularly mountainous regions; 19.7% (2000) of rural people are classified as poor. By contrast 7.8% of urban people, totaling 265,000 households, are classified as poor.27 As Vietnam moves through a double transition ([i] from rural to urban, and [ii] from a planned to market economy), impacts on urban societal groups have varied. Generally those in the foreign-invested sectors have fared better, as well as those who have retained jobs in the state sector. However, living conditions have deteriorated for many redundant public sector employees who have been forced to shift to the non-state, and often informal, sector.

Another vulnerable group is unregistered migrants. They usually have unstable jobs and have very limited access to social services and/or must pay more for these services, similar to the Chinese situation, although China is liberalizing its hukou system faster than Vietnam.

Although estimates of substandard housing vary widely, it is clear that slums are extensive and growing. For example, the Land and Housing Department estimates that at least 300,000 people live in slums in Ho Chi Minh City (HCMC) while 30% of Hanoi’s population are living in very crowded conditions with living space per capita under three square metres. Soaring land prices(land prices increased by over 500% in both Hanoi and HCMC in the 1990s) will make addressing the housing problem an even steeper challenge, especially given the fact that approximately one million people will be added to Vietnam’s urban areas each year for the next 20 years.

Source: World Bank