Income Growth in Vietnam Increases Human Development

Income Growth in Vietnam Increases Human Development

An income growth of 55.7% in Vietnam increased the Human Development Index (HDI) to 11.8% between 1999 and 2008. This is according to the Social Services for Human Development Report by the UNDP released on November 9 of this year. Accordingly, an improved life expectancy contributed to a 31.8% rise to Vietnam’s HDI, while an improved education led to a 12.6% increase. In the UNDP ceremony, country director Setsuko Yamazaki addressed the event stating that Vietnam placed 128 from 187 countries surveyed in the said report.

According to her, the most crucial factors causing inequality in Vietnam and thereby preventing the country from achieving a progress in its human development level are: economic situation, national origins, and geographical and regional differences. The Human Development report by the UNDP Social Services “looks at human development progress across all of Vietnam’s regions and finds considerable variations in levels of human development.” Yamazaki further stated that the report provides an important and useful basis for policymakers to make the right investment decisions for the social sector in both the local and national levels for the purpose of attaining the highest human development growth in Vietnam. 

The 2011 Human Development Report cited the major cities of ${bigcity_Hanoi:"Hanoi"}, ${bigcity_Ho_Chi_Minh_City:”Ho Chi Minh City”} and ${bigcity_Da_Nang:"Da Nang"} to have the same or “comparable” levels of human development with China,  Jordan and Belize. Lai Chau and Ha Giang on the other hand, considered to be poor provinces, were compared to Papua New Guinea and Swaziland in terms of the said development levels. For the first time, the report released the Multidimensional Poverty Index specifically for Vietnam, measuring multidimensional poverty against income poverty.

Based on this measurement in a 2008 data, the latter was rated at 14.5% while the former at a high 23.3%. The report also found out that most of the spending in the health and education sectors traces back to private households. The optimal rate for social equity and continued human development is 30%. The private sector has expenditures much higher than what is required. Fifty six percent of health care expenses come from household spending. In 2008, official data reported that 81% of households spent over 20% of their income on services related to health. This led to a 3.7% of households being impoverished due to high health care expenditures. The report pushes for an increased “equitable distribution of the cost burden for social services” and calling on the government to review the current socialization policy and its effect on health care and education