Income not sole measure of poverty: Oxfam chief

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Vietnam should look at the way poverty is monitored, instead of narrowly focusing on just income, since poverty is a multi-faceted issue that is becoming increasingly complex and diverse, Andy Baker, country director of Oxfam in Vietnam, tells Vietweek.

Vietweek: How do you assess Vietnam's poverty reduction efforts?

 

Andy Baker: Vietnam's remarkable record in poverty reduction is well known and justifiably celebrated. In the past 20 years around 30 million Vietnamese have lifted themselves out of poverty, aided by effective government policies and interventions.

The government statistics for poverty rates have fallen from nearly 60 percent in the early 1990s to just over 14 percent in 2010 and are reportedly even lower today. This achievement in changing income poverty has been echoed by successes in achieving changes set by the Millennium Development Goals, particularly in health and education.

Is the country's poverty reduction achievement sustainable?

Whilst large numbers of Vietnamese households are no longer classified as poor, many of them remain vulnerable to falling back into poverty. Studies of what happens to poor families over time show how often households break out of poverty only to be pushed back through economic shocks or changes. For rural families this can be related to failed harvests or drops in crop prices, for urban households this often relates to the precarious nature of available employment, and for all families the impacts of the costs of healthcare emergencies and inflation are a risk factor.

These continuing vulnerabilities mean that Vietnam's achievements in poverty reduction are by no means guaranteed and stable. Economic instability, the risk of natural disasters, and a lack of an effective social safety net mean that the great gains could yet be lost.

There is an opinion that Vietnam's achievement in poverty alleviation has to do with its low poverty threshold. What do you think?

Poverty has many faces and is not easy to measure through any one indicator. Using income figures is the most common measure, but of course raises questions about what level to set as the threshold for poverty. In Vietnam, the official MOLISA poverty rates of VND500,000 per person/month in urban areas and VND400,000/person/month in rural areas give a 2010 poverty figure of 14.2 percent. However the poverty rate suggested by the Government Statistics Office together with the World Bank is a higher VND653,000/person/month which would bring the poverty rate in 2010 up to 20.7 percent.

Data on poverty is inevitably political as governments like to show their successes and downplay their failings. Hence, in many countries, poverty data needs to be augmented with other forms of poverty monitoring taken from independent researchers.

Whichever of these forms of measurement are used, the achievement in poverty reduction remains impressive, and the challenges in the next phase of poverty reduction remain the same.

Has improvement in social welfare matched economic growth and helped in poverty alleviation?

Social welfare is an important tool in tackling poverty reduction, particularly in response to the widening inequality and the risk that the poorest are being left behind. Ensuring social welfare in Vietnam includes social security and social assistance; social security provides targeted health insurance, unemployment insurance, and social insurance while social assistance focuses on particularly vulnerable groups such as the very elderly, people living with disabilities, and orphans.

However, only around 50 percent of the poorest households are eligible to receive benefits from the government's poverty reduction program, and the level of benefits received is generally very low. At the same time many people who are not amongst those most in need end up benefiting from these programs.

There is a real need to change the way in which beneficiaries are chosen so that more money and support can go to those who most need it, and so that targeting is less open to corruption.

In the past two decades it has been widespread economic growth rather than social welfare that has been most effective in poverty reduction. Today we see a growing inequality that gives most of the benefits of growth to the richest 20 percent of the population and almost none to the poorest 20 percent.  There is thus a greater need to put more resources into social welfare to target the poorest, particularly women amongst them, and to enable them to access opportunity.

How does the current economic slowdown affect poor people?

Poor people are always the first to suffer in an economic slowdown. In Vietnam, we have seen loss of jobs and loss of job security amongst many people working in manufacturing as export markets decline. We have seen both farmers and consumers face challenges of increasingly volatile food prices. High inflation, particularly affecting foodstuff and basic services like electricity, water, and education, has made it increasingly hard for poorer households to make ends meet.

Oxfam poverty monitoring research over the past five years indicates that income diversification has been a key way for people to get themselves out of poverty.

What are the challenges Vietnam faces in alleviating poverty?

Poverty reduction in Vietnam remains challenging. Many of the more obvious approaches to poverty reduction have already been taken and solutions are becoming more complex and need to become more bespoke to the particular needs of vulnerable groups.

Economic growth has been the main factor in poverty reduction over the past two decades and that growth is now slowing down. At the same time there is increasing inequality and the benefits of growth are now more and more gained by the richest segment of the population, not by those living in poverty. That inequality is seen in incomes and property, but also seen in opportunity where access to quality education and healthcare is far from equitably shared.

The ethnic minority population of Vietnam has often missed out on the benefits of a growing economy and whilst they make up less than 15 percent of the population, they account for nearly 50 percent of the poor. The barriers to ethnic minority participation in economic growth remain in place; they frequently have limited assets, low levels of education resulting from a lack of mother tongue education and poor healthcare conditions.

New forms of poverty are being experienced by migrant workers, who all too frequently find themselves in precarious employment, not knowing if they can rely on an income the next month or not.

In rural areas, land is a crucial factor in securing and improving livelihoods and yet it is increasingly contested. Farming households are losing land through land conversion but not being adequately compensated, driving them into poverty. As the National Assembly considers the review of the land law, there is a great opportunity to mitigate the negative impacts of land changes.

What do you suggest Vietnam should do to combat poverty?

Some 8-10 million Vietnamese are still living in poverty and that needs to be a focus for government action.

First of all, in order to protect and enhance the great gains that have already been made and to minimize the number of near poor people who fall back into poverty, the state needs to promote economic policies that control inflation, particularly in food prices and basic services. At the same time there must be moves to widen the social safety net to include more of the poorest, to better target benefits on those most in needs, and to give a higher level of benefits.

Secondly, the government needs to find ways to continue tackling poverty amongst the ten or more million people in Vietnam who still face real material poverty.  This should include ending all forms of exclusion the government should seek through its policies and practices to tackle discrimination and stigma against ethnic minorities, women, and migrant workers. It should also include work to guarantee land rights farmers need to have more stable property rights with better protection and more voice in case of land use changes.

Thirdly, the state needs to look at the way poverty is monitored. The current statistics for poverty are narrowly focused on income whilst poverty is a multi-faceted issue that is increasingly complex and diverse.

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