Even though Vietnam’s poverty rate has been considerably reduced over the past two decades, official poverty reduction efforts are still inefficient and unsustainable, National Assembly deputies said.

Minister of Labour, Invalid and Social Affairs Pham Thi Hai Chuyen emphasised the necessity of sustainable poverty reduction

The NA has recently discussed and reviewed capital allocation, and the implementation of poverty reduction programmes, using funding from overseas development assistance (ODA).

Several NA deputies agreed that poverty reduction was ineffective as efforts seemed to just focus on capital disbursement instead of creating a sustainable livelihood for the poor.

Deputy Minister of Planning and Investment Dang Huy Dong said, “Many ODA-funded projects for poverty reduction spent up to 70% of their funding on consultancy and management services, so a modest remaining fund went to the poor.”

He said that a community-based project on forestation and poverty reduction in the northern province of Bac Can was a typical example of inefficiency. It was started a decade ago but was ended several years later as it failed to realise initial targets.

Nguyen Manh Hung, Vice Chairman of NA’s Social Affairs Committee, also raised concerns over the inefficiency of such projects as reports tended to base their level of success on the total amount of capital disbursed, only.

According to Hung, between 2011 and 2013, funding of VND180 million (USD8,524) was said to go to each poor family in a particular region but the direct benefits for the needy were rather modest, he said. He wondered about the efficiency of the total investment of up to VND91 trillion (USD4.3 million) annually during this period.

“Several programmes were aimed to provide poor households with soft loans worth a maximum of VND30 million (USD1,420) each, but their actual receipts from such loans was much lower, averaging at between VND12 million and VND15 million (USD568.3-USD710.4) each. In some cases, loans were only VND5 million (USD236.8), which was not enough for them to even buy a cow for production, let alone poverty reduction,” he noted.

Vice Chairman of the NA’s Social Affairs Committee Nguyen Manh Hung doubtful about efficiency of poverty reduction programmes

In some other cases, people tend to rely on the government’s funding for poverty reduction instead of proactively trying to escape their situation. This can explain why several local leaders were happy to see the rising number of poor households in their localities and why poor families didn’t want to escape from poverty for fear of losing that income.

Minister of Labour, Invalids and Social Affairs, Pham Thi Hai Chuyen, said despite incentive policies for poor households, there is still a lack of incentive for families that are close to the poverty line or have just escaped from poverty.

“Poverty reduction must be sustainable,” she emphasised.

A report by the Ministry of Labour, Invalids and Social Affairs showed that even though Vietnam has cut its poverty rate from 58% in 1993 to the current 7.8%, the rate of poverty relapse is rather high and the majority of poor households are from ethnic groups and from remote, mountainous areas. The number of poor households in cities has also been on the rise in recent years due to the effects of the economic downturn.

Vietnam spent VND543 trillion (USD25.71 million) on poverty reduction programmes from 2005 to 2012.