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The doi moi reform process and human development in Vietnam

The doi moi reform process, which started in the mid-eighties, provided a new framework for realizing human development objectives. As a process of expanding choices for people to improve their wellbeing, doi moi brought about significant changes in the people's opportunities to work, to learn, and to enjoy a meaningful life. Farmers were granted more freedom to manage and work the land and to determine what crops to cultivate. Consumers gained better access to markets with wider varieties of goods and services. Stateowned producers began facing 'harder budget constraints' but were also allowed greater autonomy as regards what to produce and to whom to sell. These enlarging choices and opportunities have unleashed the energy and creativity of many Vietnamese people, leading to impressive human development achievements, notably in terms of poverty reduction.

The doi moi reform process has clearly resulted in a substantial improvement in the well-being of the vast majority of Vietnamese people. One of the key lessons that Viet Nam has learned from its own experience with the doi moi process is that expanding people's capabilities and choices is an effective means for realizing the country's noble goals of development. Nevertheless, Viet Nam still faces enormous challenges. They stem from the reality that Viet Nam is undergoing a triple transformation process: from war to peace, from central planning to a market economy, and from isolation and estrangement to international integration. Recent new statistical evidence of widening disparities suggests that maintaining equity is an emerging new challenge facing the country, and will call for policies and institutional changes that further broaden and deepen people's participation in the development process. In addition, based on a rich new data base of provincial level human development indicators, also highlights how the human development situation varies markedly across the country, calling for different policy approaches at the local level.

As a process of expanding choices for people to improve their well-being, doi moi brought about significant changes in the people's opportunities towork, to learn, and to enjoy a meaningful life.Maintaining equity is an emerging new challenge facing the country, and will call for policies and institutional changes that further broaden and deepen people's participation in the development process.

The essence of the human development approach is that it treats an expansion of human choices as the end of all development efforts. Doi moi did not imply a change in development goals, as the socialist orientation continued to be confirmed as superior in meeting people's needs. What it did change was the approach to development. In effect, doi moi is also a comprehensive program aimed at overcoming poverty and further developing the country, recognizing that the central planning mechanism was no longer suitable to ensure the realization of human development objectives. The achievements in reducing poverty in Viet Nam have been impressive, by any standard. Based on an internationally-comparable poverty line, poverty incidence fell from well over 70% in the mid-1980s to 58 per cent in 1993 and further to an estimated 37 per cent in 1998. In urban areas, poverty declined from 25 per cent in 1993 to 9 per cent in 1998, whereas in rural areas, it decreased from 66 to 45 per cent.

Looking at other aspects of human development, especially health and education,Viet Nam scores considerably higher than other countries with similarly low incomes. This is probably due to the comparatively low level of income inequality and the high priority the Government has attached to investing in the social sectors.

Adult literacy has risen to 94 percent and net school enrolment rates now amount to 92 and 74 per cent for primary and lower secondary schools, respectively. Children belonging to the ethnic minority households have been catching up in terms of enrolment rates, while gender inequalities have narrowed. Stimulated by higher salaries for skilled workers, tertiary education has gained popularity and an increasing number of students are studying abroad, while new forms of education, such as private and semi-public schools, have emerged. At the same time, enrolment, attendance and completion rates are unsatisfactory and relate to the increasing private costs of school participation. Quality of education and teaching staff is another serious concern. Traditional methods of teaching rely heavily on rote learning. Primary and secondary schools still put much emphasis on memorizing facts, usually with little opportunity to be creative and to express thoughts and ideas. There is a need to modernize the knowledge system to make Viet Nam the knowledge- based economy it aspires to be.

During the doi moi reform period, population policies and family planning programmes were intensified and implemented on a larger scale, which together with the generally improved living conditions, led to a sharp slowing down of population growth. The Government now intends to gradually move away from fertility control and family planning towards a policy that focuses on free, well-informed choices through access to high quality reproductive health care services and the provision of appropriate information. Such a move would imply that population policy would become congruent with the human development perspective.

In the health sector, doi moi further expanded and improved the existing threetier health system. The immunization programmes in particular have been highly successful. Today's official health policy comprises three key elements: (a) it prefers 'prevention to cure', (b) combines 'traditional and modern medicine' and (c) calls for a 'joint contribution by both the State and people'.

Globalization has played an important catalytic role in promoting growing prosperity and poverty reduction but truly successful integration will require proactive policies and timely preparation in order to maximise the benefits for and minimise risks to the well-being of a nation's people. Global integration can open the path to sustainable development - to 'catch up' - but the speed of the journey is determined by the strength of those who are walking.

Doi moi should not be regarded merely as an economic reform package to master the crisis in the mid-80s. In effect, doi moi is a comprehensive program aimed at overcoming poverty and further developing the country. Recent new evidence using income data suggests that income inequality may be rising more rapidly than earlier estimates indicated. This will present a new challenge for policy-makers. National averages obscure the significant human development disparities byregion, ethnicity and gender.

It is very much recommended that policy-makers take into account provincial HDIs and HPIs when formulating new socio-economic policies and allocating public expenditures across the country. Easy gains in poverty reduction are probably over, and Viet Nam will need great efforts in reducing poverty in the more remote and isolated areas of the country.

Employment creation remains one of the greatest challenges for the next decade. Every year another 1.4 million young people will enter the labour market. The private sector turned out to be most efficient in creating new and sustainable jobs. Promoting the private sector is therefore a crucial component of a viable human development strategy. Enabling the further development of the private business sector will be very important for achieving the ambitious socio-economic and human development targets Viet Nam has set for itself. Besides, a comprehensive strategy is needed to enhance the formation of people's capabilities and to improve the enabling environment so that people can effectively use their capabilities and exercise effective choices.

- (25/07/2003)

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