Jonathan Pincus, UNDP Senior International Economist (Photo: Vietnam Government Portal) Hanoi (VNA) - As Vietnam is determined to take drastic measures to not justrecover the economy but also work hard toward development priorities, VietnamNews Agency (VNA) asks Jonathan Pincus, UNDP Senior International Economist, forrecommendations to speed up the nation’s efforts and achieve its set targets.
VNA: As a developmentpartner that has helped Vietnam work its way toward human centered developmentand sustainable growth, what’re your assessments on the current economicsituation in Vietnam? What are the challenges facing Vietnam right now?
JonathanPincus: Vietnam has made tremendousprogress toward achieving the Sustainable Development Goals by 2030. The headcountMultidimensional Poverty Index, which considers income and access to basicservices and amenities like healthcare, education, housing, clean water andsanitation, fell by more than half from 2016 to 2022 from 9.2% to 4.3% of thepopulation. These gains were achieved despite the disruption of the Covid-19pandemic and its impact on jobs and incomes.
Vietnam has made gains on other goals such as an increase in uppersecondary school enrolment rates and further declines in maternal mortality. Althoughstill a lower middle-income country, Vietnam achieved High Human DevelopmentStatus in 2021, signaling the country’s commitment to pro-poor growth, accessto health services and education.
More progress is needed on some of the SDGs, for example genderequality and environmental protection. The sex ratio at birth in 2022 was 111.5boys to 100 girls in 2022 as a result of the widespread practice of pre-natalsex selection. Women areunder-represented in senior positions in government and the private sector, anddomestic violence remains a serious issue. Marine and coastal ecosystems are vulnerableto over-exploitation and pollution from agriculture, industry and householdwaste.
By far the greatest development challenge facing Vietnam is climatechange. As a country with a long coastline and two low-lying delta regions, Vietnamis often listed among the countries most vulnerable to sea level rise, floods,drought and extreme weather events. In the Mekong Delta region, rising sealevels and saline intrusion could force millions of people to relocate.Billions of dollars in investment will be needed to upgrade rural and urbaninfrastructure to protect communities from storms and floods.
Like other countries, Vietnamhas embarked on a long-term journey from fossil fuel dependence to renewableenergy. The Government haspledged to achieve net-zero carbon emissions by 2050 and eliminate coal-firedpower plants in the 2040s. The transition will deliver economic benefitsincluding energy security and cleaner air, and Vietnam’s green credentials willbolster export industries.
𝄹 The investment effort required to achieve net-zero is measured in thehundreds of billions of US dollars. Mobilizing finance on this scale is anunprecedented challenge. Traditional financial instruments like governmentbonds, commercial banks and overseas development assistance will not be enough.Vietnam will need to innovate to create larger, deeper domestic financialmarkets and to use the government’s balance sheet to crowd in private investment,especially from the domestic private sector.
Vietnam has made considerable strides in efforts to achieve the Sustainable Development Goals. (Source: chinhphu.vn) VNA: What are UNDP’srecommendations for Vietnam to deal with those challenges in order to keep upthe nation's remarkable progress that has been made over the years?
Pincus: UNDP policy recommendations to Vietnam and othercountries is based on the principle that development should Leave No OneBehind. We support policies to achieve equality of outcomes and humandevelopment for all.
Vietnam has demonstrated that rapid economic growth is consistent with adeep concern for equality. Since 2018, income growth for the poorest 40% of householdshas been higher than average national income growth. The under-five childmortality rate in 2021 was 20.6 per 1,000 live births, less than half of theaverage of lower middle-income countries. Access to electricity and basicsanitation is nearly universal, even in remote areas.
Some problems remain. Foodinsecurity among ethnic minority children is stubbornly high at 32 percent of childrenunder five years of age. Elderly poverty is a rising concern, with 9 percent ofpeople over 65 years old living in poverty at the national poverty line andanother 15 percent vulnerable to poverty. Nearly half of elderly people arestill in work and 90 percent receive financial assistance from family members.
Social assistance programs are in place to help poor and vulnerableindividuals and households including children, the elderly and people livingwith disabilities. However, Vietnam’s spending on social assistance at 0.7percent of GDP is low compared to the rest of the Asia-Pacific region. Benefitlevels are also low, both in absolute terms and compared to other lower middle-incomecountries.
The Government’s Master Plan for Social Assistance Reform andDevelopment (MPSARD), approved in 2017, identifies reforms to close theseemerging poverty gaps, including expanding social pensions and child benefit.However, these innovations have not yet been funded.
UNDP proposes universal child benefit and social pensions as a policyto ensure that all Vietnamese citizens benefit from development and to buildthe resilience of households with young children and elderly members to manage incomeloss due to economic headwinds, health emergencies like Covid-19 and other risks. Estimates compiled by scholars at the NationalEconomics University indicate that universal child benefit and social pensionswould be an affordable, effective means to eliminate poverty, build socialcohesion and prevent widening inequalities from undermining Vietnam’sdevelopment gains.
The transition to renewable energy will generate benefits but will alsogive rise to substantial economic costs for every activity, sector and region ofthe country. The aim of achieving a JustEnergy Transition is to ensure that these costs and benefits are fairlydistributed, and in particular that the living standards of the poorest andmost vulnerable members of society are protected. UNDP is working closely with the government to understandthe social and economic implications of climate change and the energytransition and to identify policies and programs to protect vulnerable citizensand communities.
UNDP is working closely with the government to understand the social and economic implications of climate change. (Illustrative image: baophapluat.vn) VNA: Vietnam hasdetermined to take drastic measures to not just recover the economy but alsowork hard toward development priorities. As a long-term development partner of Vietnam,what is UNDP’s plan to support Vietnam to achieve its goals?
Pincus: UNDP works closely with the Government and other partners tosupport sustainable and inclusive economic growth, to help Vietnam increaseresilience and shocks and adapt to the effects of climate change and to promoteimprovements to the quality of governance and access to justice for Vietnamesecitizens.
The Sustainable Development Goals and the principle of Leaving No OneBehind motivate UNDP’s work in Vietnam. We identify evidence-based policyoptions with Government and other partners to help Vietnam accelerate progresstowards achieving all the SDGs. Gender equality and increasing economic opportunitiesfor young people have emerged as priority issues for UNDP and other UnitedNations agencies.
As already noted, UNDP is engaged in work on social protection reformand achieving a Just Energy Transition. We also work with Government to supportefforts to make public agencies more responsive to citizens’ concerns andaspirations from central authorities to villages and towns. PAPI, anational survey of local governance and public administration, providesimportant insights on citizens’ needs and perceptions of public institutions.
The Vietnamese public is increasingly concerned about the quality ofthe natural environment. The 2021 Law on Environmental Protection and the decisionon circular economy development in 2022 are important milestones. The newenvironment law brings Vietnamese concepts and regulations in line withinternational practice and provides a legal basis for carbon trading. Officialendorsement of circularity will have important implications for domesticpolicies relating to solid waste management and for Vietnam’s key exportindustries including textiles, footwear and electronics.
♉ The experience of the COVID-19pandemic has made us all more aware of the need to build resilience to disastersand climate change, health impacts, and economic risks such as financial crisesor sudden weaking of external demand as we are experiencing at the moment. Thecapacity to anticipate risks and respond effectively is an essential functionof government./.
