Comprehensive Institutional and Policy Reform Needed for Growth That Works for All

According to the report, an inclusive growth path - rapid, sustainable growth that leaves no one behind - is key to achieve overall progress in human development.

 

According to Professor Nguyen Xuan Thang, President of VASS, this report looks back 30 years of Doi Moi (reform) and seeks, through the lens of human development, to identify a new growth model which ensures that all Vietnamese citizens realise their full potential and enjoy prosperity.

 

The National Human Development Report themed “Growth that Works for All” examines opportunities, challenges and offers recommendations for reform under three pillars which define an inclusive growth strategy: expanding productive employment; improving the educational and health care system; and renovating the social protection system.

 

The report examines the three policy pillars in detail, and finds positive transformation and remarkable performance in the economy, education and health, and social protection during the 30 years since the launch of Doi Moi. However, the report also highlights emerging weaknesses and argues that Vietnam needs to make a series of reforms in order to accelerate inclusive growth and promote human development in the future.

 

To expand productive employment, Vietnam needs to maintain macroeconomic stability; increase economic efficiency and enhance connectivity and technological readiness as well as nurturing innovation.

 

To improve the education and health care systems, Vietnam needs to improve the quality and access to pre-primary, higher education and vocational training; and undertake a comprehensive evaluation of the socialization reforms prior to any further expansion.

 

To renovate the social protection system, Vietnam needs to secure a floor level of cover – via universal health insurance; a self-financed social insurance system; and expanded social assistance based on Life Cycle entitlements.

 

Dr Pratibha Mehta, UN Resident Coordinator and UNDP Resident Representative, noted the need to focus both on the poor and the vulnerable lower middle income group whose incomes are not substantially above the poverty line, who typically work in informal jobs, are urban migrants or small scale farmers. “Their opportunities for advancement and protections are limited. They are also underutilised, their inclusion and productivity is vital to Vietnam’s development success,” she said.

 

“Vietnam’s renewed development success rests on it building an inclusive and equitable economy - and that the route to this lies in full employment based on decent jobs, and opportunity and security for all,” Dr Mehta highlighted.

 

The report finds that at the national level, Vietnam’s performance in terms of human development has been impressive over the last 35 years, but progress varied between periods and has slowed down in recent years.

 

In the late 1980s, poor performance on the human development index (HDI), which measures aggregate achievement in terms of income, education and health, caused a gap open up between Vietnam and countries with similar development levels. The index rapidly increased later and Vietnam was a star performer in the 1990-2000 period, but the gap was never closed. Moreover, in the years since the financial crisis in 2008, Vietnam’s performance levelled off.

 

Like previous national Human Development Reports, the 2015 report examines human development progress across all of Vietnam’s regions. It finds that all provinces made positive progress but this was not even, with some performing much better than others. Those that did best, experienced balanced development. Economic development went hand in hand with improved social outcomes.

 

Ho Chi Minh City and Danang City recorded high levels of human development comparable to Poland or Croatia. Whereas poor provinces like Ha Giang and Lai Chau were estimated as having human development levels similar to Guatemala and Ghana. The report also identifies “rising stars” such as Hau Giang, Tien Giang, Binh Phuoc, Thai Nguyen and Phu Yen provinces where development was exceptional, and “static stones” such as Ha Nam, Nghe An, Phu Tho and Ha Tinh provinces, where progress was slower.

 

During the launch, UNDP also presented key findings of the global Human Development Report 2015. Alongside reporting on international human development performance, the global report examines the world for work and its specific contribution to human development. It provides many complementary messages with regard to productive employment, but it also defines work broadly to include both paid and unpaid activities. It finds that unpaid domestic work, largely delivered by women in caring for their families, can be as vital as paid jobs for human development. It also examines the opportunities and threats posed by the digital revolution and rapid global integration.