2011 Viet Nam Human Development Report: Economic growth driving Viet Nam’s human development progress, more emphasis needed on health and education

Nov 9, 2011

Ha Noi – Economic growth has been the major driver of Viet Nam’s human development progress, says a new report released today by the United Nations Development Programme (UNDP) in Viet Nam. According to the report, Viet Nam’s Human Development Index (HDI) has risen 11.8 percent  between 1999 and 2008. Income growth has contributed more than half (55.7 percent) of this growth, while improved life expectancy and education have contributed 31.8 percent  and just 12.6 percent  respectively.

The 2011 report – Social Services for Human Development – argues that the same level of priority and investment now needs to be given to improving human development outcomes as is accorded to growing Viet Nam’s economy.

As a follow-up to the first national Human Development Report in 2001, the 2011 report looks at human development progress across all of Viet Nam’s regions. It finds that there is considerable variation in levels of human development. Wealthier provinces like Ha Noi, Ho Chi Minh City and Da Nang have levels of human development comparable to China, Jordan and Belize. Poor provinces like Lai Chau and Ha Giang have human development levels similar to Papua New Guinea and Swaziland.

Speaking at the media briefing today, Setsuko Yamazaki, UNDP Country Director, said: “The progress made at the national level masks large disparities at the sub-national  level. Together with economic status and ethnicity, regional and geographic disparities are among the most important determinants of inequality in Viet Nam. All of these are hindering Viet Nam’s progress to higher levels of human development.”

“I hope this report provides additional input for policy makers to make smart investment decisions for the social sector, at the national and sub-national  levels, in order to achieve the full potential of human development in Viet Nam,” Setsuko Yamazaki concluded.

The report also introduces a new Multi-dimensional Poverty Index (MPI) for Viet Nam. This is the first national non-monetary poverty index developed specifically for Viet Nam.

According to this measurement, more people in Viet Nam suffer from multi-dimensional poverty than income poverty. In 2008, the rate of income poverty was 14.5 percent while it was 23.3 percent  for multi-dimensional  poverty. The most significant deprivations people faced were availability of permanent housing and access to clean water and sanitation.

Again, there are significant disparities across provinces. Multi-dimensional poverty was very high in Viet Nam’s poorest provinces, at 82.3 percent  in Lai Chau and 75 percent in Dien Bien. In twelve provinces, more than half of the population lived in multi-dimensional  poverty.

The 2011 report also looks at the correlation between good governance and higher levels of human development. Using data from the Viet Nam Public Administration Index (PAPI), which measures the experience of citizens when interacting with local authorities, the report finds there is a strong relationship between high levels of HDI and a high PAPI score. Those provinces with relatively high HDI values were also the provinces that scored well in the PAPI, in particular in relation to public service delivery.

As specific components of human development, the report looks in detail at health and education services and the financing of these. It finds that the bulk of health and education expenditure comes from private household spending. This spending is at much higher levels than the 30 percent  considered optimal for social equity and continued human development.

For instance, while at the primary school level household spending accounted for 17.5 percent  of overall expenditure, at the tertiary level this rose to over fifty percent. These costs put a significant burden on poor and disadvantaged households, especially at higher levels of education.

In health, 56 percent  of overall expenditure came from household spending. This has a catastrophic  impact on poor and vulnerable households, with 8.1 percent  of households in 2008 spending more than 20 percent  of their total household expenditure on health and 3.7 percent being impoverished as a direct result of their high health care spending.

Ensuring universal access to quality, affordable social services, like health and education, and to social protection are the foundation of a prosperous society the report finds.

The authors of the report argue that a more equitable distribution of the cost burden for social services is therefore required. In that respect they recommend the government to review the current ‘socialization policy’ and its impact on household health and education spending.

About the Human Development Index (HDI): The HDI is made up of three sub-indexes: income (GDP per capita PPP), life expectancy, and education (adult literacy rates and gross enrolment rates). It offers an alternative measurement of national development, challenging purely economic assessments of progress such as Gross Domestic Product.

About UNDP: UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in 177 countries and territories, we offer global perspective and local insight to help empower  lives and build resilient nations. Please visit: www.undp.org.vn

Contact information

Pernille Goodall | UN Communications Team
Tel: +84 4 3822 4383 (ext: 123); Mob: +84 (0)91 3209987;
Email: pernille.goodall@undp.org

Nguyen Viet Lan | UN Communications Team
Tel: +84 4 3822 4383 (ext: 121); Mob: +84 (0)91 4436769;
Email: nguyen.viet.lan@undp.org