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Wider Gap Between Rich and Poor in Vietnam

The gap in social security between the rich and poor remains a reality in Vietnam, according to a United Nations Development Programme report.

A big chunk of the population work into their old age
The report titled “How progressive is social security in Vietnam?” revealed that the rate of social security spending in the country is declining.
Statistics from the report, based on the Vietnam Household Living Standards Survey of 2004, indicate that households in the top income quintile, the richest 20 per cent of Vietnamese families, receive nearly 40 per cent of social security benefits, while the poorest quintile receives less than 7 per cent.
Other statistics revealed that the richest quintile receives 47 per cent of pensions and the poorest quintile only 2 per cent. In addition, the wealthiest quintile receives 45 per cent of health assistance while the poorest only receive about 15 per cent.
The reason for the major gap, according to Martin Evans, team leader for the report published by the University of Bath in the United Kingdom, was that a large proportion of the state’s pension fund was reserved for elderly people, many of whom worked for the independence of the country and some of whom were former high-ranking officials.
As a result, Evans suggested that Vietnam set up a separate system for social security that would cover all sectors of society and thereby reduce the gap.
“Vietnam should study the social security plans of other countries and chose a suitable example for its system,” said Evans.
A second report was also released, titled “What is the relationship between old age and poverty in Vietnam?”
The report’s primary point was to draw attention to the fact that the elderly are more likely to work past retirement and to work longer hours, if they do not live with working-age adults.
About half of women are still economically active at between 70-75 years of age, and 20 per cent are active at 80-85 years and up.
Generally, the elderly earn higher-than-average incomes due to their social security income and higher private remittances. However, only 22 per cent of elderly live in households that receive a pension.
The two reports aim to shine a light on social security reform in Vietnam, a sector in need of attention.
Social security is a new issue which has only recently begun to be studied in the country.
According to the UNDP, the existing social security provision consists of programmes for formal sector employees plus social assistance through targeted programmes and other forms of public action directed at disadvantaged communities.
These strategies have contributed to poverty reduction and the development of remote areas.
The Vietnamese Government also recognises that in the near future the nation will need a modern, integrated approach to social policy to help people cope with risks to livelihoods and to avoid falling back into poverty due to illness, disability, loss of employment, raising children and old age.

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