Speeches & Transcripts April 5, 2018

Climbing the Ladder: Poverty Reduction and Shared Prosperity in Vietnam

Dr. Phan Văn Hùng, Vice Minister of CEMA

Dr.Vu Thanh Liem, Director for General Statistics Office Vietnam

Representatives of the Diplomatic Corps

Distinguished guests,

Ladies and gentlemen,

I am very pleased to join and welcome you to the launch of the poverty update report, that we titled “Climbing the Ladder: Poverty Reduction and Shared Prosperity in Vietnam”. At the outset of the launch today, I would like to express my sincere gratitude to the leadership of MPI, line agencies and their technical departments for the guidance and effective collaboration during the preparation of the report.

As eliminating extreme poverty and boosting shared prosperity are the two goals of the World Bank Group, we take the opportunity of this report, to review recent trends and patterns of poverty in Vietnam, improve our understanding of both drivers of poverty reduction and the remaining challenges for eliminating poverty and promoting shared prosperity. I believe that findings of the report are extremely important and useful in informing many strategic policies going forward.

Ladies and gentlemen,

Vietnam has indeed climbed several large steps up in the ladder to reduce poverty and improve shared prosperity. It is even more important that poverty reduction is highly visible in lagging areas and among disadvantaged groups such as ethnic minorities. Between 2014 and 2016, these regions and groups saw a 13 percentage points reduction in poverty, the largest drop in a decade.

Even more encouraging are indications that living standards for people who escape poverty seem to continue improving, so much so that a large number of Vietnamese are joining the middle class by global standards. Between 2014 and 2016, about 3 million more Vietnamese joined the ranks of the global middle class.

These numbers, and many others that will follow in our presentation, are truly impressive. But they are not just numbers. They reflect the good policy directions of the government in the past decade. And more importantly, they point us to think about the future socio-economic agenda. Please let me highlight several implications for our discussion today.

First, the poverty reduction agenda is dynamic, not static. It will continue to evolve. Gains in poverty reduction can be fragile if policies and interventions do not keep pace with the fast-changing operating environment. For example, as people escape poverty and the aspirations among the population increase, shifting their focus from merely putting food on the table, to earning enough income to achieve economic security and lead the life of the middle class. This in turn requires even higher future growth in incomes. Sustaining wage growth without hurting Vietnam’s competitiveness can only be attained by pursuing reforms and undertake infrastructure investments that facilitate a structural shift from low to high value-added economic activities. The agenda is no longer just about creating jobs, but providing better jobs and economic opportunities.

Second, a growing consumer class presents new opportunities for further growth and creation of better jobs. As domestic consumption continues to expand, I see great potential for growth in manufacturing and service sectors. Agriculture sectors can also benefit from this trend by further transforming to high-value and quality crops. Effective policies in key areas such as land governance, urban planning and development, support to domestic private sector, innovation and technology, can help realize this potential.

Third, let’s not make any mistake - there are still about 9 million people living in extreme poverty and NO ONE SHOULD BE LEFT BEHIND. Thus, even as the majority of the population’s concerns are shifting to improving their quality of life more broadly – such as having access to high quality services and more comfortable living conditions - we should be mindful to provide the much-needed support and implement targeted interventions to give hope and create opportunities for those lagging behind, and currently living in poverty, so that they too, can benefit from the broad improvements in the society.

On this agenda, allow me to suggest several areas where further actions are required to reduce poverty and promote a prosperous and equitable society.

1.      Undertaking the last mile infrastructure investments to connect the poor to better economic opportunities;

2.      Advancing agriculture restructuring, so that poor people in rural areas, especially those in highland and mountainous regions, can cultivate crops or engage in agriculture activities that are most profitable there;

3.      Building on Vietnam’s success in basic education to allow opportunities for children from all backgrounds to have an equal chance to succeed, get quality tertiary education and build their skills for future jobs.

Ladies and gentlemen,

The findings of this report provide vindication that Vietnam’s economic and social policies helped to achieve tremendous results in reducing poverty and improving the quality of life for millions. The decline in poverty amongst ethnic minorities is encouraging, and more focused efforts on improving their incomes can further broaden their opportunities and reduce persistent inequalities.

At the World Bank, we stand ready to continue our strong partnership with the government in building a prosperous, equitable society, free of poverty and with better opportunities for all. Please be assured of our strong commitment to accompanying Vietnam in its last mile of poverty reduction.

I am honoured with the presence of Vice Minister Phan Văn Hùng of CEMA, which demonstrates government’s strong commitment not to leave any one behind, by working towards the development of ethnic minorities communities, which remains an important issue on the agenda for fostering a prosperous and equitable society.

I look forward to a fruitful discussion with you over the findings of this report and hope that you will find it informative and useful in your work as we all seek to support the people of Vietnam to lead prosperous lives.

Thank you

 

Related: Vietnam continues to reduce poverty, according to WB report (Press release)

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