Vietnam’s shift from a centrally planned to a market economy has transformed the country from one of the poorest in the world into a lower middle-income country. Vietnam now is one of the most dynamic emerging countries in East Asia region.
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Today is the United Nations’ International Day for the Eradication of Poverty, which provides an occasion to reflect on Vietnam’s record and its long-term agenda for poverty reduction and inclusive gr... Show More +owth. Few countries in the world can match Vietnam’s record of poverty reduction over the 25 years. Since the start of Doi Moi (Renewal), the country has sustained high growth without substantial increases in inequality, a feat few countries at any level of development have managed. Tens of millions have been lifted out of poverty. Extreme poverty—as measured by those living on less than US$1.25-a-day—has been all but eradicated.The country has also made impressive improvements in health status, with huge gains in life expectancy and healthy years of life, dramatic reductions in communicable disease incidence, and significant expansion of health insurance coverage. The vast majority of children are now in school, and their international test results surpass those of a number of OECD countries. The country has also put in place a nascent pension and social safety net system. These accomplishments have made for a remarkable record of inclusion as Vietnam has launched itself out of the ranks of low income countries. The question today for Vietnam is how social policy and institutions can play an equally crucial role in achieving the country’s aspirations over the next 20 years. Doing more of the same will not be sufficient to ensure that Vietnam remains an inclusive and high growth society.Vietnam now faces the complex demands required for a transition from a lower-middle income to a modern industrialized country. Moreover, Vietnam faces a changing domestic and external environment, including a rapid demographic transition, a labor market exposed to increased global competition, new health challenges from non-communicable diseases, and shifting societal expectations of the state. All these challenges will require new approaches. The Vietnamese government is now leading a major study, with the World Bank as a partner, which will offer a long-term vision for the next 20 years as the country moves towards high-income status. In crafting this vision, Vietnam can draw lessons from other countries that have made the same journey, particularly those within East Asia. Advanced economies like Korea and Taiwan (China), during their transition, have shifted focus from moving people out of absolute poverty and providing basic services towards promoting equality of opportunity for all. This means higher quality and wider coverage social services, better job opportunities, and adequate and sustainable social protection. Inclusion will mean not just a concern for the poor but also ensuring opportunity for the growing middle class.What, specifically, should be the priority initiatives to help Vietnam have an inclusive society in 2035? Preliminary discussions around the study point to several ideas: Phased reform of the ho khau (household) system, separating its registration function from access to public services. This would stimulate needed labor mobility provide equal opportunity to urban migrants. The evolution of labor market institutions which are responsive to the needs for greater factor mobility of a competitive and aspiring high income country. This will mean developing robust labor dispute resolution mechanisms to sustain workplace harmony, and policies which protect workers without impeding their mobility.A school system that ensures that all children complete secondary school, with relevant skills to become life-long learners, and a higher education system with the autonomy to deliver high quality, relevant education to foster a generation of innovators. A health care system shifted away from a hospital-focused model. This will mean putting primary care in the drivers’ seat of a system of coordinated care. The country will need to tackle this challenge while also achieving its commitment to universal health coverage. An expanded and reformed social insurance system. Vietnam’s insurance-only pension model is incapable of achieving high pension coverage and can discourage dynamism in the labor market. Failing to reform the current system threatens to leave no effective safety net for most elderly people as the country begins to age rapidly.Continued efforts to tackle the chronic poverty and poor social outcomes of ethnic minorities. While many ethnic minorities have shared in Vietnam’s success, the strategy is likely shift from protective approaches to ensuring that minorities are linked to and prepared to take advantage of economic opportunity.The World Bank will be exploring these and other aspects of inclusion as we work with Vietnamese colleagues on developing the study over the next several months. Vietnam is at a critical juncture. At this stage of development, many countries have made bold decisions to move forward, while others lag behind. What do you see as the priorities to ensure that Vietnam continues to be an inclusive society in 20 years time? Show Less -
Ho Chi Minh City, October 17, 2014 – This week 24 innovative clean-tech startups graduated from Vietnam’s first-ever Clean Tech Bootcamp. This program helps small- and medium-size enterprises (SMEs) d... Show More +evelop and bring to market innovative clean-energy and energy-efficiency solutions and adaptation technologies in the areas of transportation, agribusiness, and water management.The initiative was developed by infoDev/World Bank’s Climate Technology Program (CTP), in partnership with the Asian Development Bank (ADB), to accelerate the growth of new green businesses in the region and help reduce the significant threats posed by climate change. Vietnam is one of the five most vulnerable countries to climate change in the Asia-Pacific region. In the last 50 years sea level has risen by 50 cm, while extreme climate events (typhoon, flood, landslide, drought, saline intrusion, etc.) have cost the country 9,500 human lives and approximately 1.5% of GDP each year.“Vietnam’s climate-related challenges combined with its rapid economic development call for local innovative solutions,” said Laura Altinger, Senior Environmental Economist at the World Bank Vietnam office. “The development of locally relevant climate tech ventures would not only enable Vietnam to adapt to climate change and reduce emissions, but also to meet energy needs, maintain competitiveness, and minimize its dependence on fossil fuel imports.”The 4-day program of lectures and hands-on workshops gives these innovative entrepreneurs an opportunity to refine their product strategies, business models and marketing pitches; sharpen their negotiating skills; and network with clean-tech entrepreneurs, investors and peers."To tackle climate change, we need to help train innovative and successful climate technology entrepreneurs," said Dr. Aiming Zhou, Senior Energy Specialist at the Asian Development Bank, one of the co-organizers of the training. "A bootcamp like this, which provides intense hands-on support to the most promising emerging climate technology businesses in Vietnam, plays a critical part in making this happen.”With the successful conclusion of the bootcamp, the program will continue to nurture and mentor these and other climate technology SMEs and startups through the Climate Innovation Center (Vietnam CIC). This upcoming business hub is designed to provide a targeted suite of services, including early-stage financing, technology commercialization, business development, and capacity building support. Supported by UKaid and the Australian Department of Foreign Affairs and Trade, the Vietnam CIC will deliver business advisory services and technology commercialization funding to up to 65 climate technology entrepreneurs, including equity investments to 25 companies in the first five years.Through this support, the center is expected to reduce or avoid the equivalent of the annual emissions of 47,000 passenger vehicles (225,000 metric tons of CO2 emissions), improve access to clean water, increase agricultural efficiency, and provide access to renewable or more efficient sources of energy. Overall, the Vietnam CIC will contribute to make one million people less vulnerable to climate change---For more information on the bootcamp and the center, please visit www.infodev.org/climate www.worldbank.org/vn or www.vietnamcic.org Show Less -
Forecast Shows Region to Grow Nearly 7% This Year and NextSINGAPORE, October 6, 2014 – Developing countries in East Asia Pacific will see slightly slower economic growth this year, but the pace of gro... Show More +wth in the region, excluding China, will pick up next year, as the gradual recovery in high-income economies boosts demand for exports from the region, according to the East Asia Pacific Economic Update released today by the World Bank. Still, developing East Asia Pacific remains the fastest-growing region in the world.Developing East Asia will grow by 6.9% this year and next, down from 7.2% in 2013, the report says. In China, growth will ease slightly to 7.4% this year and 7.2% in 2015, as the government seeks to put the economy on a more sustainable path with policies addressing financial vulnerabilities and structural constraints. Excluding China, growth in developing countries in the region is expected to bottom out at 4.8% this year, before rising to 5.3% in 2015, as exports rise and domestic economic reforms advance in the large Southeast Asian economies.“East Asia Pacific will continue to have the potential to grow at a higher rate—and faster than other developing regions—if policy makers implement an ambitious domestic reform agenda, which includes removing barriers to domestic investment, improving export competitiveness and rationalizing public spending,” said Axel van Trotsenburg, World Bank East Asia and Pacific Regional Vice President.While the region as a whole will benefit more than any other region from the recovery of the global economy, the impact will vary across countries, depending on their investment and export environment. China, Malaysia, Vietnam and Cambodia are well positioned to increase their exports, reflecting their deepening integration into the global and regional value chains that have driven global trade in the last 20 years.The report revised the World Bank’s 2014 forecast for Malaysia to 5.7%, up from 4.9% in April, because of robust exports in the first half of the year. Cambodia is expected to grow at 7.2% in 2014, boosted by rising garment exports. Thailand is also expected to benefit from the global recovery, given its strong integration into global value chains – if the respite in political unrest is sustained.But in Indonesia, which still relies on exporting commodities, growth will drop to 5.2% this year from 5.8% in 2013, constrained by falling commodity prices, lower-than-expected government consumption and slower credit expansion.A bright spot for the region’s economies: robust private consumption, supported by various factors such as election-related spending in Indonesia and a strong labor market in Malaysia. In the Philippines, buoyant remittances pushed up private consumption, which accounts for more than half of the country’s overall growth, forecasted to be at 6.4% this year and 6.7% in 2015. Economic growth in Myanmar, with recent institutional and policy reforms and international re-engagement, will be at 8.5% this year and next.Significant uncertainties remain that could affect the region’s growth. High-income economies, especially in the euro zone and Japan, could face downside risks in the near term. Global financial conditions could tighten sharply, and international and regional geopolitical tensions could affect prospects. The region also remains vulnerable to a sharp slowdown in China, which, though unlikely to happen, could hurt commodity producers especially hard, such as metal exporters in Mongolia and coal exporters in Indonesia.“The best way for countries in the region to deal with these risks is to address vulnerabilities caused by past financial and fiscal policies, and complement these measures with structural reforms to enhance export competitiveness,” said Sudhir Shetty, Chief Economist of the World Bank’s East Asia and Pacific Region.The report identifies policy recommendations for different countries to deal with risk and embark on a path of sustainable growth. Mongolia and Lao PDR, for example, need to reduce the fiscal deficit and tighten monetary policy. In Indonesia, Malaysia, the Philippines, and Thailand, measures to bolster revenues and reduce poorly targeted subsidies will help create space for productivity-enhancing investments and poverty-reducing spending, while gradually rebuilding fiscal buffers.In China, as the government seeks to strike a balance between containing growing risks and meeting growth targets, the report indicates that structural reforms in sectors previously reserved for state enterprises and services could help offset the impact of measures to contain local government debt and curb shadow banking.The report also discusses long-term structural reforms that will help countries maximize the benefits from the global recovery. Key reforms include investing more in infrastructure, improving trade logistics, and liberalizing services and foreign direct investment. And, as many education systems in the region aren’t producing skills demanded in the labor market, the report recommends a comprehensive strategy to address issues ranging from early childhood development to higher education and lifelong learning.The East Asia and Pacific Update is the World Bank’s comprehensive review of the region’s economies. It is published twice yearly and is available free of charge at www.worldbank.org/eapupdateVisit us on Facebook: www.facebook.com/worldbankBe updated via Twitter: www.twitter.com/worldbankasia Show Less -
With a greater concentration of people and assets in urban areas, cities need to address an increasingly complex range of shocks and stresses to safeguard development gains and accelerate poverty redu... Show More +ction.Managing disaster risk and the impacts of climate change have long been an important focus of urban resilience. But recent examples show how economic crises, health epidemics and uncontrolled urbanization can also affect the ability of a city to sustain growth and provide services for its citizens – underscoring the need for a new approach to resilient urban development.The World Bank’s Resilient Cities Program, launched in December 2013, reflects this conceptual shift and aims to help cities adapt to a greater variety of changing conditions and withstand shocks while maintaining essential functions. Ongoing activities under this program, which is also supported by the Global Facility for Disaster Reduction and Recovery (GFDRR), include:CityStrength DiagnosticA rapid diagnostic methodology to help cities improve their understanding of risk and the performance of urban systems as well as identify priority actions and investments that will enhance the city’s resilience.The first diagnostic under the new methodology was conducted in Can Tho, Vietnam in June 2014. Additional diagnostics are planned in Addis Ababa and Lahore in 2015.Financing ResilienceInnovative financing mechanisms to support investment in resilient infrastructure are being developed working with the private sector and other development partners.A methodology to mainstream Low-Carbon & Resilient Capital Investment Planning in cities is being developed, and training is being provided for cities participating in City Creditworthiness AcademiesMedellin Collaboration on Urban ResilienceNine institutions, including the World Bank, announced a global collaboration at the World Urban Forum in Medellin, Colombia, in April 2014 expressing their collective commitment to help cities improve resilience.The collaboration aims to facilitate the flow of knowledge and financial resources necessary to help cities become more resilient to disruptions related to climate change, disasters caused by natural hazards, and other systemic shocks and stresses, including the socio-economic challenges associated with rapid urbanization.Primary objectives include:- Fostering harmonization of the approaches and tools available to help cities assess their strengths, vulnerabilities, and exposure to a multitude of natural and manmade threats in order to build their resilience;- Catalyzing access to existing and innovative finance mechanisms, including risk-based instruments, to reduce exposure and vulnerability to shocks and increase cities’ adaptive capacity; and- Supporting capacity development of cities to achieve their goals by facilitating direct sharing of best practice and knowledge enhancement. Show Less -
“Our intention is to help mainstream the construction of resource-efficient residential and commercial buildings by bringing together governments, green building councils, financial institutions, deve... Show More +lopers, and homeowners. We have made great progress laying the groundwork for success in South Africa and hope to quickly replicate our strategy in other major markets,” Kapoor said. Encouraging efficiency through certificationThe Green Business Council of South Africa and IFC recently launched an EDGE certification program in South Africa, focused on the residential property sector, and certification is being rolled out in India, Indonesia, the Philippines, Vietnam, Colombia, Costa Rica, and Panama.The voluntary certification is a way for builders to demonstrate the benefits of green efficiencies to residents, owners, and investors. Buildings that use 20 percent less energy, water, and embodied energy in building materials than their peers – as demonstrated by the EDGE tool – achieve the EDGE performance standard and are eligible for certification.To help builders reduce energy toward meeting the performance standard, EDGE shows the differences in choosing efficient HVAC systems, lower-energy lighting, solar solutions, or even the use of fans in all rooms. Water consumption can be reduced by choosing to install low-flow showerheads or faucets as well as dual flush systems for water closets. The tool takes into account the climate of the city where the building is being designed. Once a user identifies the city and country, temperatures are populated into the system, as are local costs.As the user chooses the different materials and options to design the building, EDGE gives a running tally of estimated monthly energy use, the amount of greenhouse gas that is saved as well as utility costs, and how long it will take to pay back the green investments in the building.Changing how people think about constructionThe EDGE green building program is trying to change the way people think about and value green buildings – as practical and necessary, not as luxuries – and to encourage their construction in rapidly urbanizing economies. The goal is to make the benefits clearer for builders, bankers, and buyers.The International Energy Agency estimates buildings account for one-third of final energy consumption globally and energy demand could rise by 50 percent by 2050, if no action is taken to improve efficiencies in buildings. According to the IEA, the deployment of energy-efficient technologies that are already commercially available could result in global savings equivalent to the current energy use of Russia and India combined. Show Less -