Sustaining multi-dimensional poverty reduction in the context of the COVID-19 pandemic: Challenges and Solutions
Communist Review - Poverty is always a tough challenge for the sustainable development of any country in the world. The COVID-19 pandemic has affected all aspects of socio-economic life in general and poverty reduction in particular. In Viet Nam, sustaining multi-dimensional poverty reduction in the context of the COVID-19 pandemic has faced up with various challenges that need immediate action.
Poverty reduction in the context of the COVID-19 pandemic
The COVID-19 pandemic has shaken up the socio-economic order on a global scale. As forecasted by the United Nations Department of Economic and Social Affairs (UNDESA), around 71 million people around the world have been pushed back into extreme poverty, marking the first global poverty surge since 1998. According to the International Labor Organization (ILO), over 2 billion people across the world whose lives depend on daily incomes have been put at risk since the rate of unemployment has escalated as a result of the COVID-19 pandemic, which has worsened global poverty.
In Viet Nam, there are major trends that have a strong impact on economic growth and poverty reduction, namely: 1- Viet Nam is predicted to enter aging population stage in 2026 which might last for 28 years, till 2054. The trend will drive the labor force participation rate lower, while negatively impacting productivity, increasing the burden on the social security system 2- Urbanization that gravitates towards megacities (about 55% of the urban population inhabit Hanoi and Ho Chi Minh City) gives rise to unrestricted migration, disparities in incomes and living standards. In these circumstances, poorer communities tend to be exposed to higher risk of unemployment, income loss, and environmental pollution; 3- Issues such as climate change and natural disasters still have considerable impacts on the living conditions, incomes, and employment of disadvantaged groups, including those from poor communities; 4- The Fourth Industrial Revolution continues to bring about both opportunities and challenges to poverty eradication. While creating breakthroughs in many fields, diversifying new jobs demands and income sources, it challenges the poor in accessing human resources development, vocational training programs, and job searching in such competitive labour markets; 5- Due to the COVID-19 pandemic, many freelancers have fallen or been pushed back into poverty due to unemployment; many vulnerable households living at the margins experienced considerable income declines.
Sustainable poverty alleviation has always been identified as the cornerstone of development strategies adopted by the Party and State of Viet Nam. Over the last decades, the country’s poverty rate has shown a significant decline, falling from 58.1% in 1993 to 2.75% in 2020. Viet Nam is considered one of the bright spots in the world in terms of poverty reduction as it already achieved the United Nations’ Millennium Development Goals on hunger eradication and poverty reduction. In addition, Viet Nam is one of the first 30 countries in the world and one of the first Asian countries to apply a multidimensional poverty line, ensuring a minimum living standard associated with the Sustainable Development Goals (SDGs) of the United Nations.
With regard to poverty reduction, many documents have been issued by the Party and State, such as Directive No. 05-CT/TW of the Party Central Committee’s Secretariat, dated June 23, 2021, “On strengthening the Party’s leadership for sustainable poverty reduction by 2030”. Its resolutions, operational plans, and guidance have been formulated by the whole political system which closely and consistently collaborated to attain positive social responses. Consequently, the poor’s self-reliance has gradually increased, which has been illustrated by numerous striking examples of successful escapes from poverty.
On July 28, 2021, the National Assembly issued Resolution No. 24/2021/QH15 called “Approving the investment policy for the National Target Program on sustainable poverty reduction for the 2021-2025 period.” On achieving this, the Prime Minister approved legislative guides, and timely, synchronous policies on poverty reduction were issued, which prioritized the poor and vulnerable affected by natural disasters or the COVID-19 pandemic, ethnic minority groups in remote areas, those with socioeconomic deprivation, etc. The government has gradually switched from free food or monetary assistance to more sustainable support policies.
On June 2, 2022, the Prime Minister issued Decision No. 666/QĐ-TTg Planning the launch of the emulation movement “For the poor - Leave no one behind” for the 2021-2025 period to promote the strength and solidarity of the whole political system and the entire society; profoundly transform the public awareness, action, and responsibility for the country’s sustainable poverty reduction; encourage self-reliance for “poverty eradication and prosperity”; “For a Viet Nam out of poverty”.
Despite the remarkable achievements in poverty elimination, a number of challenges have been posing, especially in the “post-COVID-19” period as follows:
Firstly, poverty reduction attainments are unsustainable. The proportion of households living below the poverty line, especially those of ethnic minorities and in disadvantaged areas is substantial. The poverty rate in some areas is over 50%, the poor ethnic minority households account for 61,28% of the national total number. The gap between rich and poor widened since the income gap between Group 5 (the richest constituting 20% population) and Group 1 (the poorest accounting for 20% population) went up from 9.7 in 2014 to 10.2 times in 2019.
Secondly, there are 74 poor districts, 54 communes in coastal regions and islands, and nearly 1,550 communes of ethnic minorities and mountainous areas remain with the highest poverty rate. Due to the inhospitable terrains, poor infrastructure, and harsh socio-economic conditions, their multi-dimensional poverty rate is high; for instance, the poverty rate of Dong Van district, Ha Giang province is 80.34%; that of Bao Lam district, Cao Bang province remains 77.34%; and the percentage of Tram Tau district, Yen Bai province is 71.63%.
Thirdly, the majority of households living in or near poverty reside in rural areas, most of whom are self-employed unskilled workers in agriculture, forestry, and fishery, seasonal employees, and small traders with insecure incomes restricted access to and low competitiveness in the labor market. Whereas, the poor in urban areas are mainly freelancers, such as bricklayers, lottery ticket sellers, motorbike taxi drivers, freight carriers, small traders, etc. who have low unstable incomes, no or very little savings, unable to meet food consumption needs from own production.
Fourthly, poverty alleviation in the poorest areas has been a laborious task owing to the ethnic minorities’ long-established and outdated customs, low intellectual level, and limited production capacity. Also, it is because of the limited infrastructure, especially transport facilities in mountainous, remote, border areas or offshore islands. While large-scale investment is needed, resources are scarce.
Fifthly, the COVID-19 pandemic left a strong impact on the poor, near-poor newly-escaped households and unofficial workers: 1- Most of the poor urban people lost their jobs and sources of income or had difficulty paying basic living expenses in social distancing; 2- Poor and near-poor households in rural areas had their incomes reduced. According to the preliminary survey, 50% of rural households had an average income reduction of 38% while that of 78% of non-agricultural households was reduced by 46%(1); 3- Unofficial workers with low incomes in both urban and rural areas fell into poverty due to job and income loss.
Solutions to poverty reduction need to be addressed
Documents of the 13th National Party Congress emphasized: “Continuing to synchronously implement multi-dimensional, inclusive and sustainable poverty reduction solutions” is one of the keys to facilitating sustainable social development, social progress, and justice. At the same time, the 13th National Party Congress Resolution, Directive No. 05-CT/TW of the Party Central Committee’s Secretariat, dated June 23, 2021, “On strengthening the Party’s leadership for sustainable poverty reduction by the year 2030”; Resolution No. 24/2021/QH15, dated July 28, 2021 by the National Assembly that “Approving the investment policy for the national target program on sustainable poverty reduction for the 2021-2025 period” has set the “target rate of annual multidimensional poverty reduction at 1 - 1,5%”.
On implementing the 2030 Agenda for Sustainable Development, Vietnam commits to achieve the Sustainable Development Goals by 2030, including the goals of “end poverty in all forms nationwide; provide full employment and decent work for all; ensure inclusive and equitable quality education, and reduce social inequality”.
As the COVID-19 pandemic is still in progress, it wreaks havoc on people’s lives, especially the impoverished and disadvantaged. Climate change, natural disasters, environmental pollution, industrialization, urbanization, international integration, the dark side of free markets, the aging population, etc., involve employment, incomes, and the living standards of the poor. Therefore, the goal of sustainable poverty reduction should focus on building and replicating effective models of poverty alleviation, attracting investments to generate jobs, and promoting diversified livelihoods of the poor in underprivileged regions, thus generating secure income, and improving their adaptability skills to climate change and health crises.
Supporting the poor to increase productivity in agriculture, forestry, fishery, and salt production, hence ensuring food security, raising incomes, meeting nutritional needs, and sustaining poverty escapes. Accordingly, training courses that help the poor with job switching to industrial and service sectors, should be offered. Applying information technology to provide the poor with access to the labor and commodity market. At the same time, strengthening the labour market information system, varying labour market transactions, connecting labor supply and demand, creating sustainable jobs for workers from poor, near-poor, and poverty newly-escaped families; and assuring employees in poor and disadvantaged areas to qualify both domestic and foreign working requirements.
In Viet Nam, there have been around 1,930 villages lacking terrestrial mobile telecommunications services, and approximately 9,000 villages short of fixed broadband internet services. Thus, there needs wider knowledge dissemination about successful businesses to reduce “information poverty” in the poorest regions. Moreover, priority should be placed on strategies for preventing malnutrition and fostering development for children under 16 in poor and disadvantaged areas. The housing programs help provide safe, stable houses that are resilient to natural disasters, enhance the rural poor’s life quality, and contribute to sustainable poverty reduction.
In order to achieve the “target rate of annual multidimensional poverty reduction at 1 - 1,5%”, the following key tasks are to play a contributing role in the country’s pursuit of the sustainable development goals in 2022 and the 2022 – 2025 period:
Firstly, raising public awareness on poverty reduction through information dissemination and education; promoting the tradition and the spirit of “love and solidarity” towards the poor. Providing guides for them to acquire skills and connection to labour markets, encouraging self-reliance on poverty escapes. Also, promptly publicizing and replicating good examples of individuals, groups, or models in sustainable poverty eradication.
Secondly, grasping opportunities to stimulate socio-economic recovery and development, maintaining the growth momentum, exploiting new growth drivers to increase productivity levels, promoting job opportunities, and providing aid for the poor. Focusing on implementing 3 pillars: restoring and promoting production and business; boosting exports; accelerating public investment disbursement and resource mobilization to develop infrastructure systems, especially the strategic ones in poor areas.
Thirdly, finalizing the mechanism and implementation of the National Target Program for Sustainable Poverty Reduction in the 2021-2025 period, which focuses on raising incomes and life quality, launching training programs and job creation, preventing the disadvantaged from falling into poverty, eliminating temporary and dilapidated houses, investing in socio-economic infrastructure development in the most impoverished areas.
Regarding poor areas, it is suggested that they should focus on inter-regional infrastructure development, which contributes to improving the locals’ living conditions and quality of life.
Concerning the impoverished, they are recommended to seek support to find new jobs with sufficient incomes, participate in short-term courses on IT or vocational training to better adapt to new contexts, build and replicate poverty reduction models in agriculture. Nutrition programs for poor children under 16, housing support, and access to telecommunications and internet services should be initiated. People’s spirit of self-reliance to escape poverty should be encouraged, available social resources to be mobilized to achieve the sustainable poverty reduction goal; exemplary poverty eradication models to be widespread and copied.
Fourthly, improving policies on sustainable poverty reduction, multidimensional poverty targets associated with sustainable development goals, ensuring a gradual increase in people’s minimum living standard and access to basic social services; renewing approaches to poverty reduction, promulgating conditional assistance programs, operating social credit system, and providing social protection for the poor and vulnerable. Adopting policies to encourage enterprises and cooperatives to collaborate in production, trade, and consumption. Diversifying production and business models participated by the poor and near-poor households in rural and mountainous areas.
Fifthly, pursuing inter-regional socio-economic development policies, establishing strong connections between developed regions and disadvantaged ones; adopting policies to encourage investment in such deprived areas, and complying with national defense and security. Reviewing and adjusting zoning and forced relocation regulations to guarantee sustainable livelihoods in special-use forests and areas exposed to natural disasters or climate change. Properly addressing issues related to agricultural production land and residential land, creating jobs, granting basic health care, education, housing, clean water, sanitation, information access, and other social services for the poor, especially for ethnic minorities in mountainous areas.
Sixthly, improving the quality of the emulation movement “Whole country joins hands for the poor - leaving no one behind”, persevering with the will of independence and self-reliance “from poverty to prosperity”, striving for a Vietnam of zero poverty. Mobilizing and utilizing investment in poverty reduction. The State plays a key role in exploiting maximum social resources for sustainable poverty reduction. Prioritizing resources to carry out the National Target Programs for Sustainable Poverty Reduction and Socio-Economic Development for ethnic minorities in mountainous areas, integrated with other socio-economic development programs in the 2021 - 2030 period; utilizing both domestic and international resources; focusing on developing production, vocational education for the poor; investing in socio-economic infrastructure in poor disadvantaged districts and communes.
Seventhly, innovating and improving the state management over poverty elimination. Consolidating the organizational apparatus, maximizing administrative efficiency in the fight against poverty. Strengthening coordination among all management levels and sectors; adopting policies to encourage competent and enthusiastic cadres and state workers to relocate regions of extreme poverty. Building databases on poverty eradication, exposing the public to information, offering access to the commodity and labour markets; providing guidance on cooperative models, self-managed groups, and typical households to lift themselves out of poverty. Encouraging enterprises and the well-off to help the impoverished; building and replicating excellent models of sustainable poverty eradication.
Eighthly, deepening international cooperation, mobilizing resources and technical support from international organizations. Hopefully, those partners will accompany the Viet Nam Government in the cause of sustainable poverty reduction and social protection./.
(1) UNDP-UN WOMEN: “COVID-19 Socio-economic Impact on Vulnerable Households and Enterprises: A gender-sensitive assessment”, 2020
This article was published in the Communist Review No. 996 (August 2022)