[Vietnam] Funds budgeted to reduce poverty

from Vietnam News

The State announced a massive investment of about VND62 trillion (US$4 billion) from now until 2010 in an all-out effort to engineer a breakthrough in the fight against poverty, said Minister of Labour, Invalids and Social Affairs Nguyen Thi Hang.

The investment aims to reduce the number of poor households from 22 per cent nationwide last year, according to the new poverty line of VND260,000 a month for city-dwellers, to 11 per cent by 2010 – or a 50 per cent reduction in poverty-stricken families in five years. This will also result in an improvement in the living standards of poor families, Hang said.

By 2010, most of the poor households that have too little or no fields to cultivate will be provided with land, or they will be helped to change to other jobs.

She said the National Programme on Poverty Reduction will prioritise mountainous areas where the poverty ratio is high, but will also provide the budget for developing the infrastructure in poor coastal and island communities.

Viet Nam had successfully concluded the 2001-05 stage of the national programme on poverty alleviation, she said.

By the end of 2005, the ratio of poor households had been reduced to less than 7 per cent, following the former poverty line set at earnings of VND150,000 a month for city-dwellers. On average, the ratio was lowered by 2 per cent annually from 2001 to 2005, which exceeded the target set at the Ninth National Party Congress to reduce the poor household ratio to lower than 10 per cent.

By implementing the State’s investment programmes, the infrastructures of poor communes have been upgraded and hunger has basically been wiped out.

The total capital of VND40.9 trillion earmarked for hunger eradication and poverty alleviation include Programme 143 (aiming at creating jobs, reducing poverty and eradicating hunger), Programme 135 (for socio-economic development in extremely poor communes) and other international projects. The National Programme for Hunger Eradication and Poverty Alleviation contributes VND21 trillion to the total.

Hang said from 1993 to date, the country has raised the poverty line four times.

According to the latest poverty line, the country had more than 4 million poor households by the end of last year.

By applying this new poverty line, Viet Nam will have to face and deal with many challenges and difficulties because the country is still poor, and the average income and spending per capita are still low.

The gap between the development of urban and rural areas, between regions, and between groups of residents now shows a tendency to widen, she said, and the annual budget for hunger eradication and poverty alleviation remains small. It constitutes only two per cent of the total State budget.

The ratio of poor people among the ethnic minorities is also still high.

Hang said the National Programme for Hunger Eradication and Poverty Alleviation will give land to poor ethnic minority households for building houses, to the tune of at least 200sq.m per household.

Every poor ethnic minority family that does not have a house, or that lives in temporary shelters will receive VND5 million from the State to help them build houses. It is expected that some 400,000 poor households will receive help in this regard, including 300,000 poor ethnic people.

Currently, poor households still face difficulties acquiring capital for production and doing business.

However, Hang said the State will provide the poor with sources for credit. From this year, poor households, the disabled and ethnic minorities will be able to borrow capital at lower interest rates than those in the open market ranging from 25 to 30 per cent.