UN: Inflation created new poor

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Vietnam passes resolution creating targeted poverty reduction program

Residents washing dishes amongst demolished houses close to Ho Chi Minh City's financial district

It seemed like an odd request when a province in the world's second largest rice producer petitioned the central government for rice subsidies to tackle hunger.

On May 5, the Thanh Hoa Province People's Committee asked the Ministry of Labor, War Invalids and Social Affairs for 2,048 tons of rice to support more than 70,000 hungry households.

In January, Thanh Hoa distributed 4,300 tons of rice subsidies to more than 280,000 local residents who said they were facing hunger, despite the fact that the province is home to the largest delta in the central region.

Thanh Hoa is not the only place in Vietnam where residents continue to go hungry due to persistent poverty.

In January of this year, Vietnam raised its poverty line due to rising inflation and consumer prices. Based on that new measure, Vietnam contains 3,055,566 poor households and 1,612,381 near-poor households.

The nation's poverty rate was estimated at 9.45 percent of the total population based on a monthly incomes of VND400,000 (US$19.5) for rural areas and VND500,000 ($24.4) for urban residents.

On Thursday during a mid-year meeting between Vietnam and international donors in Ha Tinh Province, UN Resident Coordinator Bruce Campbell warned that inflation and other threats could push many Vietnamese households into poverty

"Poor urban and migrant households and pensioners who are net food buyers are most affected by rising prices for energy, housing and transport and social services. Inflation also affects poor agricultural households, even those that are net food producers, as they pay more for agricultural inputs and social services," he said. "A coherent and inclusive social protection system is required, which integrates existing programs in order to support all Vietnamese people when they experience economic, health and environmental shocks and crises."

According to a report by the United Nations Country Team presented at the meeting, inflation has had a disproportionate impact on the poor and vulnerable, given that they spend a much higher proportion of their income on food and other essential items than better-off households.

An estimated 838,600 agricultural household members experienced hunger in the first two months of 2011, the highest number since 2007 and nearly double the hungry households in 2010.

In 2008 food inflation drove four million people into hunger, the highest number on record for the 2006-2010 period.

"Women and children are often among those most affected, with many households reporting that they cut back on food consumption and pulled their children out of school during the last period of high inflation in 2008," according to the team's prepared statement.

Calling for further attention to imbalances in economic growth between different regions and socio-economic groups, the UN said that development is about improving people's living standards and enlarging people's opportunities and choices.

It is not, they pointed out, merely a matter of economic growth.

Latest efforts

On May 30, the Ministry of Labor War Invalids and Social Affairs launched a government resolution calling for sustainable poverty reduction through 2020 to be prioritized in the national socio-economic development strategy.

The resolution seeks to improve the livelihoods of poor people, particularly in mountainous ethnic minority communities, and narrow the gap between rural and urban areas.

The resolution will focus on designing a targeted sustainable poverty reduction program to be implemented through 2015.

The plan will seek to raise the per capita income of poor families by 3.5 times and to reduce the national poor household rate by two percent per annum.

Christophe Bahuet, United Nations Development Program's Vietnam deputy country director, said that Vietnam has begun a new decade as a middle-income nation, creating a demand for prioritizing sustainable poverty reduction.

"Attention has been drawn to the large population of rural poor and vulnerable groups in need of a social security net to mitigate and protect against the uncertainty increasingly resulting from this new socio-economic context. At the same time, generations of ethnic groups are locked into a vicious cycle of poverty that is proving stubbornly difficult to break," he stated during the launch of the resolution.

Multi-dimensional poverty

Le Kim Dung, Associate Country Director of Oxfam Great Britain an international anti-poverty NGO, said that poverty has not been reduced evenly. Disparities remain across ethnic groups, regions, and between the rich and poor.

"The latest Oxfam and ActionAid rural poverty monitoring report reveals that the poorest communes in its monitoring sites have poverty rates which exceed 70 percent, according to the new poverty line," she said.

Dung suggested the government take into account multi-dimensional poverty in addition to the existing income or expenditure-based measures in order to help policy makers identify and formulate more appropriate policies to reduce poverty.

"As Vietnam becomes a middle-income country, Oxfam and ActionAid report showed that poverty is becoming more multi-dimensional, and can be measured by means of income, expenditure and non-income criteria. Non-income criteria might include human resources, livelihoods, living conditions, social capital and access to public services," she said.

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