Closing inequality gaps to secure long-lasting progress

Caitlin Wiesen, United Nations Development Programme resident representative in Vietnam

The United Nations Development Programme’s (UNDP) Human Development Report 2019, titled “Beyond income, beyond averages, beyond today: inequalities in human development in the 21st century” (HDR 2019) was recently launched in Vietnam – a country that has embarked firmly on people-centered development and has prioritised equality in its socio-economic strategies and plans.

The launch of the report took place globally around the world last December. It is the first of a new generation of human development reports for the UNDP, to accelerate thought leadership, and drive conversations on the future of development, and in so doing, advance progress towards the 17 Sustainable Development Goals.

The UNDP is delighted to have partnered with Thomas Piketty (author of the best-selling book Capital in the Twenty-First Century) and his team at the World Inequality Lab to produce this report which focuses on new ways of measuring and approaching inequalities. The topic of the report in 2019 is a pertinent one as systemic inequality is deeply damaging our society and harming the human development progress.

There is much that Vietnam can be proud of in this report. Indeed, the country’s progress in human development has been remarkable. Between 1990 and 2018 the country’s human development index (HDI) value increased rapidly, with an average annual growth of 1.36 per cent. This places Vietnam among the group of countries with the highest HDI growth rate in the world. During the same period, Vietnam’s life expectancy at birth increased by 4.8 years, mean years of schooling: by 4.3 years and expected years of schooling: by 4.9 years and gross national income (GNI per capita) increased by 354.5 per cent. As a result, Vietnam has shifted from a low HDI country in 1990, to just shy of high human development in 2018. Today Vietnam ranks 118th among 189 countries on HDI, and the country’s HDI value is only 0.007 point below the high human development group’s threshold.

Achieving equality

Notably, Vietnam’s human development progress has been achieved with relatively low increases in inequality. Vietnam’s loss of HDI score due to inequality in 2018 is 16.3 per cent, its loss of income due to inequality is 18.1 per cent, and its GNI coefficient at 35.3 are among the lowest in the East Asia and Pacific region.

In fact, when taking into account Vietnam’s inequality-adjusted HDI, the country is eight places higher than its ranking in 2018.

Vietnam has also been performing well in terms of gender equality. The gender development index value of 1.003 puts the country in the top group out of five groups of 166 countries in the world, with Vietnam ranking 68th out of 162 countries in gender inequality index.

Particularly commendable is the share of seats in parliament which places Vietnam among the top third of countries globally. However, there are important areas for improvement: Vietnam ranks among the bottom third of countries globally in terms of sex ratio at birth (1.12), violence against women by non-intimate partners (34.4 per cent), and women with accounts in financial institutions or with mobile money service provider (30.4 per cent).

When going beyond national averages, as HDR 2019 calls for, disaggregated data shows larger disparities by geographical locations and ethnic minority groups.

Turning to performance in sustainable, environmental development, HDR 2019 highlights Vietnam’s forest coverage as among the top third of countries globally. At the same time, it is among the bottom third of countries in terms of carbon emission per capita. Addressing this will be a key challenge to ensure the sustainability of Vietnam’s growth.

Importantly, while Vietnam is among the top third of countries in terms of unemployment rates, it is among the bottom third in terms of skilled labour force and vulnerable employment.

This reflects a reliance on simple skilled labour and poses a serious risk of losing jobs to automation, potentially deepening inequalities in the next development period.

This is why the topic of HDR 2019 is so important. Failure to address the systemic challenges to tackle a new generation of inequalities will not only slow-down sustainable development in this century but also further entrench inequalities and harm the progress of human development in the next century. The report analyses inequality and its causes by looking beyond income, beyond averages, and beyond today.

Inequality cannot be only framed around income, fed and measured by the notion that making money is the most important thing in life. Vietnam has recognised this and was among the several countries in the world that have been pioneering the application of multi-dimensional poverty measurements and approach since 2015.

The country’s achievement in reducing multi-dimensional poverty is also remarkable: with the Ministry of Planning and Investment value of 0.019 it ranks 29th out of 102 countries and is among the top countries in East Asia and Pacific on this indicator.

Inequality is also looked at through the lens of distribution of power, be it political or monopoly in the market. Going beyond income will require tackling entrenched social and political norms embedded deep within different nations’ or population groups’ histories and cultures. Dignity as equal treatment and nondiscrimination can be even more important than the imbalances in income distribution.

Maintaining progress

Beyond averages, the report calls for analysing and addressing the life-course gender gaps and inequalities among different population groups and geographical locations. Vietnam’s disaggregated data show that despite the remarkable progress at national level, ethnic minority groups lag behind in many human capabilities such as life expectancy, health and education (especially vocational training and tertiary education), and multi-dimensional poverty.

This suggests a challenge for Vietnam to ensure no-one is left behind.

For the future, the report articulates the rise of a new generation of inequalities. Just as the gap in basic living standards is narrowing, with an unprecedented number of people in the world escaping poverty, hunger, and disease, the abilities people will need to compete in the immediate future have evolved. A new gap has opened, such as in tertiary education and digital literacy – opportunities once considered luxuries that are now considered critical to compete and belong, particularly in a knowledge economy, as Industry 4.0 accelerates. Allow me to quote Achim Steiner, UNDP administrator: “We also need to avoid a new great divergence in our societies driven by AI and digital technologies. There is historical precedent for technological revolutions to carve deep, persistent inequalities, as took place in the industrial revolution. How we adopt and use new technology is in our hands, and it can be guided to be a force for good.”

At the same time, climate change, gender inequality, and violent conflict continue to drive and entrench basic and new inequalities alike.

The report suggests that, just as inequality begins at birth and defines opportunities for children, adults, and elders, and permeates those of the next generation, so, too, policies to prevent inequalities can follow the lifecycle.

Integrated solutions addressing multidimensions of inequality should start early and span throughout three key stages of people’s lives: before they reach the labour market, to address sex birth selection, nutritional, health and educational gaps between children and young women and men; once they are in the labour market, to harness the power of labour, industrial, gender, and anti-trust policies to level the playing field; and after the market, to make sure taxes, transfers, subsidies, and social services equalise the opportunities for the haves and have-nots.

Politicians and policymakers have a range of choices that, if correctly combined for the context of each country or group, will translate into a lifelong investment in equality and sustainability. Equitably strengthening enhanced human capabilities such as tertiary education, digital literacy, and climate resilience will be key for Vietnam’s human development in the 21st century.

Vietnam is at a critical juncture as it designs its next Socio-Economic Development Strategy, with decisions made today determining whether the country will continue its current pattern of growth with relatively low inequality or whether new forms of emerging inequalities will be further entrenched and deepened with unsustainable growth pathways.

The UNDP stands ready to partner with Vietnam in the journey to achieve all goals and leave no-one behind, through sustainable, inclusive, and equitable development pathways.