Social protection in Vietnam: Achievements, challenges and development orientation

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I. OVERVIEW ON SOCIAL PROTECTION SYSTEM IN VIETNAM

In Vietnam, ensuring social protection is always regarded as regular mission of the State and the whole society. With target by 2020, an universal social protection system will be fundamentally established with requirements: the most of people have job, minimum income; participate in social insurance and ensure to have timely supports to the extreme disadvantages people (children with special disadvantages, elderly people with  low income, people with severely disability, and the poor…), gradually to increase income, to ensure a safe, equal and happy life for people. Particularly, the Article 34 of 2013 Constitution officially announced about the people’s right on social protection.

The social protection system in Vietnam currently comprises of 4 basic policy groups: (1) The policy for ensuring minimum income and poverty reduction: supporting people in actively preventing risks through participating in labour market to gain decent job, minimum income and sustainable poverty reduction; (2) The policy for social insurance: to support people in minimizing risks of sickness, occupational accidents and aging… by participating social insurance people could actively recover income deficit or loss due to above risks; (3) The policy for social assistance, which consists of regular assistance and emergency relief; (4) The policy for basic social services, help people access to basic social services in education, healthcare, accommodation, clean water and information.

Specific targets of the social protection system:

a) Aiming to decent job

Adjusted Labour code (2012): Maintaining labour market development, enhancing participations of partners (Government, enterprises, intermediary agencies and workers); Increasing the State’s assistance for vulnerable workers through supporting policies for job creation.

 Employment Law (2013): including the informal economic sector, has created favourable conditions for the poor workers, rural workers, the unemployed people and enhance employment opportunities for informal workers.

b) Enhancing social assistance for people in special difficulties circumstance

Policy system of social assistance (SA) has been constantly expanding, and covering targeted groups from infant to old people; supporting not only the poor and also other vulnerable groups, such as: The elderly (the law on elderly 2009), Disabled people (the law on people with disability 2010), Children (the law on child protection and care, adjusted in 2016)… Allowance level is adjusted to increase moderately over periods. Resources for social assistance are diversified, combined the central budget with local budget and other social resources. Assistance forms are continuing to be diversified, include monthly cash transfer, nurturing fees in the social protection establishments; supporting of healthcare, education, accommodation, and clean water…

c) Conducting well the policy of social insurance and unemployment insurance

Amended law on social insurance (2014): Enlarging the participation scope of mandatory social insurance, of which employee with contract over 1 month now will be inclusive; Strengthening sanction on contribution evasion; Perfecting the voluntary social insurance to be more flexibly and adaptably with the condition of job and worker’s income in the informal sector; promoting the poor workers and those who work in the informal sector to engage in social insurance; modernising the management of social insurance subjects.  

Employment law (2013): Generating the opportunity of participating unemployment insurance for employee ( participating this insurance is compulsory for worker with contract above 3 months). 

d) Approaching toward sustainable and comprehensive poverty reduction

Poverty reduction policy is continuously perfecting to improve comprehensively assistance for the poor; focusing on poverty reduction for ethnic minorities, poor zones and poor districts; renovating and reforming the policies/institutions, and improving efficiency of poverty reduction program; reforming management, rapidly and sustainability implementing the poverty reduction goals.  

II. ACHIEVEMENTS

Resources for social protection and poverty reduction have been further invested from the State budget and other resources. In 2015, the estimated total expenditure on social protection reached VND 307.03 trillion (increased VND 47.2 trillion compared to 2014), accounting for 6.61% of GDP (up 0.3 percentage point compared to 2014).

  1. Social protection

– Regarding to job creation: the National target program on Employment and Vocational Training created jobs for about 320,000 people every year. Many people with disabilities, ethnic minorities, people affected by the transforming process of agricultural land using have accessed to loans for business development and job creation. In 2015, around 1,625,000 people have jobs (of which 1,510,000 internal jobs and 110,000 oversea jobs with definite contract term). The percentage of labour working in Agro-forestry-fishery sector decreased to 42.54%, the unemployment rate of people at working age stood at low number of 2.31% (that in urban area was 3.29%, that of young people was 6.85%)

–  Regarding social insurance and unemployment insurance: by the end of 2015, around 12,166,000 workers participated in social insurance (accounted for 24.1% of the workforce), of which 11,912,000 participants of compulsory social insurance and 254,000 participants of voluntary social insurance. Total participants entitling monthly social insurance benefits were 2.8 million people. By the end of 2015, around 10.185 thousand people participated in unemployment insurance, accounted for 20.2% total workforce. Unemployment Insurance fund has spent VND 4,800 billion for more than 600 thousand people.

– Regarding social assistance for people under extremely difficult circumstances: in 2015, monthly cash allowance and supporting for health insurance card were provided for more than 2,643 thousand targeted people (in which 37,348 orphan children, 88,594 single parent in poor households, 1,480 thousand people over 80 years old, 896,644 people with disabilities, 62,257 families/individuals caring social assistance objects in the communities, 8,185 HIV-infected people  in poor households). The government supported more than 31 thousand tons of rice for hunger relief to nearly 2.1 million people in 21 provinces, concentrated in Nghe An, Quang Ngai, Thanh Hoa, Binh Dinh and Quang Binh. 

Currently, the country has 408 social assistance establishments that nurtured and cared more than 41.4 thousand targets, of which people with disabilities and mental disease accounted for 56.5%. Generally, nearly 3% population were receiving social assistance while the demand for social assistance was up to 20% of the total population.

– Regarding access to basic social services:

+ Education: by 2015, the proportion of 5 years-old children attending kindergarten education reached 97.93%; the proportion of under 4 years-old children attending kindergarten education achieved 86.61%;  Primary school net enrollment rate was 98.69%; the upper secondary schools enrolment rate reached 90.89% and the percentage of students reaching high school level was 62%; the proportion of children with disabilities attending school reached 60%; the rate of students per ten thousand citizens reached 250 thousand; the literacy rate of people aged 15 years old and older reached 99%. By the end of 2015, there were 1,467 vocational training establishments (190 vocational colleges; 280 vocational secondary schools, 997 vocational training centers and more than 1,000 establishments providing vocational training), admission nearly 2 million people; support about 550 thousand apprentices. The percentage of trained workers achieved 51%, of which the vocational training reached 38.5%.

+ Health: By 2015, around 98.4% of communes had healthcare station; 96% of villages had community health workers; 80% of communes had doctors, 50% of communes met the national standards for commune healthcare; over 95% of communes had obstetric nurses and midwives; health insurance paid all costs for pregnant women in accessing to antenatal care and giving childbirth in health facilities. The percentage of malnutrition in underweight children decreased to 14.1% for underweight and 24.2% for stunting; the maternal mortality rate dropped to 58.3 per 100,000 live births, the infant mortality under 1 year reduced to 14.7 ‰. The proportion of pregnancy women have at least 3 times of antenatal care was above 90%, the percentage of women giving birth under the support of trained medical staff was 98%, the percentage of mothers and babies receiving special care in the first week after birth was 81%. By the end of 2015, nearly 70 million people participated in health insurance, accounting for 76% of the population, of which the number of the poor and ethnic minority was 11,796,000 people, the number of the near poor were 2,992,000 people.

+ Housing: By 2015, the State supported 7,600 poor households in construction of houses for storm and flood prevention in 7 provinces in the North Central and Central Coast areas; the social housing development program for workers in industrial zones has built 28,550 apartments and further developed 69,300 apartments; The program of social housing for urban low-income people has built 25,850 apartments and further developed 61,290 apartments. The housing program for pupils and students which was invested by government bonds has arranged accommodations for 200,000 students, reached around 80% of the demand.

+ Ensuring clean water: By the end of 2015, more than 1,000 concentrated water supply facilities were built, increasing the proportion of rural population using clean water to 86% and using clean water qualifying to Ministry of Health standards to 45%.

+ Ensuring information access: After 3 years of implementation, the rate of communes with public phone station was 97%; with optical cable to communes reached 96%; with copper cable transmission reached 90%. The telecommunication network has been remained with 16,000 transaction points, in which about 7,640 post offices was at commune culture places. The program of enhanced information and communications to the mountainous, remote, border and island areas were broadcasting 4,195 radio and television programs; orders for publishing, printing and distributing of 1,327,631 copies of thematic books to communes; organizations composing, publishing and printing, distributing of 1,378,933 publications to disseminate knowledge on agriculture, health care; establish 7 clusters to provide foreign affairs information at the international border gates; provide freely 24 types of publications, magazines to the ethnic minority, mountainous and extremely difficulty areas, reached to over 40 million publications.

2 – Poverty reduction policy

Hunger eradication and poverty reduction is always considered as a key task by the government in the socio-economic development strategy.   The poverty reduction has mobilized the participation of whole political system for comprehensively support to the poor, especially the poor in the poorest regions and the areas with abundant of ethnic minorities. Poverty reduction has performed simultaneously at all levels: individuals, households, communes and districts to support the poor people in production development, accessing to healthcare and education service, vocational training, legal aid, housing and clean water; investments were focused on essential infrastructure development for extremely difficult communes. 

Poverty rate 2010- 2014 (%)

2010 2011 2012 2013 2014
VietNam 14,20 11,76 9,60 7,80 5,97
North- East Region 24,62 21,01 17,39 14,81 11,96
North-West Region 39,16 33,02 28,55 25,86 22,76
Red River Delta 8,30 6,50 4,89 3,63 2,57
North Central 22,68 18,28 15,01 12,22 9,26
South Central 17,26 14,49 12,20 10,15 8,00
Central Highland 22,48 18,47 15,00 12,56 10,22
South East 2,11 1,70 1,27 0,95 0,66
Mekong River Delta 13,48 11,39 9,24 7,41 5,48

Some specific achievements in 2015 as follows:

– Policy on providing healthcare for the poor: has allocated VND 13,500 billion to buy health insurance cards for the poor, ethnic minorities, and children under 6 years old and VND 1,600 billion supporting to purchase the health insurance cards for the near  poor households, pupils and students.

– Policies on supporting the poor students in education-training: the central budget allocated nearly VND 7,000 billion to implement tuition fee exemption policy for the poor students, grant scholarships for ethnic minority students, boarding students and boarding schools to reduce the dropout rate and increase the enrolment rate.

– Policy on supporting production land, residential land, clean water for ethnic minorities households: the State budget allocated VND 950 billion to support clean water to over 43 thousand households and directly supported land production for over 11 thousand households, supported for job transition and buying agricultural machinery and tools for more than 7 thousand households, etc.

– Policy on vocational training, employment and labor export: the State budget allocated VND 547 billion to assist the poor in participating in vocational training, labor export, etc. for more than 9,500 workers in the poor districts.

– Policies on supporting housing for the poor: the State budget allocated VND 200 billion to implement housing policies for storm and flood prevention in 14 central provinces. Total mobilized capital reached VND 12,653 billion (33% from the central budget, 6% from local budget, 28% from Vietnam Bank for social policy, and 33% from other sources).

– Preferential credit policy: Vietnam Bank for social policy has lent to more than 8.4 million customers, with total loans reaching of VND 140,780 billion, of which the poor (reached VND 36,480 billion, accounted for 25.9%); the near poor households (reached VND 27,187 billion, or 19.3%); pupils, students (reached VND 24,672 billion, accounted for 17.5%); lending to household business in disadvantaged areas (reached VND 15,359 billion, accounted for 10.9%); clean water and environmental sanitation in rural areas (reached VND 19,889 billion, accounted for 14.1%); households have just escaped from poverty (reached VND 2,916 billion, accounting for 2%)[1].

– Legal aid policy for the poor: has already allocated VND 14.8 billion for free support to about 100 thousand times of the poor with diverse forms of assistance (legal advice, participating in the proceedings, extrajudicial representatives, free leaflets, law tapes, etc…)

– Policy on supporting electricity: has already allocated VND 1,900 billion to support electricity bills for the poor households and social policy targeted households.

– Direct support policies for the poor in disadvantaged areas: estimated at VND 542 billion, reached 97% of the plan for 57 provinces (34 provinces received cash transfer, 5 provinces received in kind and 18 provinces received in both forms).

In addition, the Government has invested resources to improve the infrastructure of poor villages, communes and districts. Around VND 3000-4000 billion has been allocated annually to focus on investing in infrastructure and supporting the production development which contributed to the improvement of economic infrastructure and social development and the quality of life of people in the poor districts, communes, villages, and communes with special difficulties coastal communes, islands, mountainous and ethnic minority areas. Project of expanding the model for poverty reduction and project of capacity building, communication and monitoring and evaluation of implementation are further implemented.

2015, the year marked an important turning point when the Government approved the poverty line for the period 2016-2020 according to multidimensional approach, which contributed to more effective measuring, evaluating and designing poverty reduction policies. Poverty rate decreased from 14.2% in 2010 to 4.5% in 2015. The living condition of the poor has improved not only for households with income close to the poverty line, but also with the poorer households. In 2006, the average income of the poor households was below the poverty line about 4.7% that number decreased to 3% in 2014; the severity of poverty also declined from 13.7% in 2006 to 10.5% in 2014[2].

III. SOME CHALLENGES

  • Regarding to the implementation of social protection policies:

Firstly, the approaching method to develop policies on social protection and poverty reduction has not been completely designed in line with the principle of ensuring “the right” of people. Policies making are based on the State budget. The ability of socialization is not high.

Secondly, some indicators have not been reached comparing to the target such as employment rate in agriculture, social insurance participation rate and unemployment insurance participation rate, some indicators on health, education, and access to clean water.

Thirdly, the quality of implementing target is not high, such as: quality of job is still low; employment rate in agriculture is still high; poverty reduction result is not sustainable; the rich – poor gap between regions, population groups tends to increase; the participation rate of social insurance, health insurance increases slowly; the quality of universal education is uneven, especially for children from ethnic minorities, the poor households and areas with special difficult circumstances; admission for the vocational colleges and vocational secondary schools still faces difficulties; there is nearly 25% total population has not participated in health insurance; housing policy support for the poor households has been delayed; the proportion of people in rural areas using clean water as national standards is still low.

Fourthly, social protection policy system is still cumbersome and overlapped. Currently, there are about 233 policy documents issued and implemented by the Party, National Assembly, Government, Ministries and different agencies. Because of too many policies which were issued in different periods of time and applicable to many target groups, and lack of systematic, that leads to difficulties in applying policies and managing beneficiaries. The direction of integrating and mainstreaming policies for same benefited groups has not been implemented.

Fifthly, some social protection programs are not effective. Vocational training program for rural labour and social assistance programs are dispersal in terms of beneficiaries, funding and implementation. Information, communication and dissemination of social protection policies in some areas are still weak and ineffective.

Sixthly, ensuring minimum social protection for people are facing with many challenges. The coverage level of social protection policy is still narrow; there is a lack of funding and rational financial allocation between different programs; tools and policies are lack of sensitivity, especially in the context of economic crisis, economic reform and climate change.

Seventhly, the participation of agencies, mass organizations and society in mobilizing resources for the implementation of policies are dispersal and ineffective. The awareness about role of social protection of some committee levels, authorities, cadres, party members, organizations, enterprises and citizens are inaccurate and incomplete. There is a thought of relying on the State about policies and funding. The attention on propagation and dissemination of policies, legislation, inspection and supervision on the implementation of social protection is inadequate. The socialization, mobilization of the participation and contribution of private sector is still insufficient and has not promoted the potential participation of people, enterprises and social partners.

Eighthly, the management of the participation in social protection of people is not effective: there is no social protection code of people; criteria for assessing and monitoring are not unified; the inspection and supervision have not been implemented regularly.

For poverty reduction policies, there are following challenges:

Credit programs are not timely in allocating budget, do not meet the requirement in borrowing of beneficiaries.

Designed policies still remain the nature of governmental subsidiary leading to the dependence on the State and not encourage the poor to overcome difficulties by themselves.

Coordination between Ministries and relevant agencies are not smooth, policy documents on poverty reduction is duplicated and overlapped in contents and objects.

Resources for implementing policies are limited, fragmented, and delayed in allocation; mechanism for management and supervision of allocating, using funds is loose, duplicated and ineffective for beneficiaries.

Poverty reduction result is not sustainable, the rate of households falling back into poverty is high (accounted for 1/3 of households escape poverty); poverty rate of some poor districts, communes with special difficult circumstances, ethnic minorities is high, which is more than 50%, particularly, in some areas it is above 60-70%.

Rich – poor gap in income and access to social services among regions, residential groups tends to increase, especially between northern mountainous area, central highlands and other areas; between ethnic minorities and Kinh/ Chinese.

Work of socialization to mobilize local resources, enterprises and communities to take part in implementing programs, policies is difficult; the quantity and qualification of management officers are still limited.

IV. ORIENTATION FOR FUTURE DEVELOPMENT

Continuing economic institutional reform, state-owned enterprises restructuring, ensuring GDP growth target of 6.5%/year for additional resources for social protection expenditure.

Strengthening dissemination, education to raise awareness of authorities, officials and citizens to understand clearly about the orientation of social development in new situation, considering this is a frequent and long term political mission. Coordinating better with Vietnam Fatherland Front and social organization in dissemination, education, supervision and evaluation.

Continuing to review current social policies to complete, amend and supplement towards to simply, integrate policies, reduce management units; expanding the right to participate and enjoy social assistance policies for people.

Continuing to develop labour market, decent work; connecting labour supply and demand; developing SMEs to create jobs and restructure employment; enhancing labour dialogue, labour standards; enhancing training and skill development for employees, completing vocational training program for rural employees; implementing public work program to create temporary minimum income for the poor workers and unemployed people.

Reforming social assistance policy; Building minimum living standard to consistent with socio-economic condition; building plan to reduce the age for enjoying monthly social assistance, expanding social assistance policy for entire poor and near-poor people, ethnic minorities; increasing the level of regular social assistance, separating state management tasks and social services, paid services; integrating into lump sum payment for different policies of same beneficiary groups. Improving operational efficiency of emergency social assistance; propagating, mobilizing and organizing the movement of solidarity and mutual love; expanding the participation of community, ensuring the timely support for poeple facing risks and natural disasters.

Effectively implementing the innovation of the poverty reduction policy, from single-dimensional approach (based on income) to multi-dimensional approach (based on other factors in addition to income); focusing resouces on the most difficult and poorest areas for sustainable poverty reduction.

Expanding participants of social insurance, strengthening the punishment, supporting for employees in informal areas to participate in social insurance; reforming social insurance to ensure sustainability of the fund and to support for the poor in participating in social insurance and unemployment insurance.

Ensuring spending for social protection from the State Bugget at average level of Southeast Asia (7% of GDP). Attracting external resources such as ODA, non-refundable programs from overseas, social resources from enterprises, organizations and citizens, in which resources from the State plays a key role.

Dr. Dao Quang Vinh

[1] Up to 12/31/2015, loans of credit policy program has been estimated at 142,456 billion dong(including locally entrusted loan)

[2] Calculation based on the Result of Survey on Household living standards 2014, GSO.