Economy fuels giant development strides

A glance at the regional pool shows that the four point gain in Vietnam’s human development index (HDI) at a value of 0.704 makes the nation the most impressive case in the 10 ASEAN group, where five nations have improved in position, three including Singapore stayed the same and two - Malaysia and the Philippines - dropped down.
The report indicates that the major contributing factors to this change included an increase in the estimate of Vietnam’s GDP per capita from $2,300 to $2,490 – based on the Power Purchasing Parity formula which links the purchasing power of developed and developing nations’ currencies to reflect living standards – and relative changes in other countries due to significant data changes in one or more components of the HDI. Several countries, including Indonesia, Kyrgyzstan and Uzbekistan who had similar or higher HDI values than Vietnam in the 2004 HDR, have moved downwards relative to Vietnam with lower values in the 2005 HDR.
The 2005 HDR applauds Vietnam for already halving 1990 poverty rates, for reducing child and neo-natal mortality rates and for reinforcing the link between economic growth and poverty reduction.
Vietnam’s Human Poverty Index - a value that measures human poverty in developing countries - stands at 21.2 per cent, which ranks it at 47 among 103 developing countries, according to the report.
“While Vietnam has seen tremendous success in poverty reduction, significant challenges remain.
Vietnam needs to sustain and accelerate poverty reduction by paying even more attention to improving the living conditions of its poorest,” UN resident co-ordinator

and UNDP resident representative, Jordan Ryan said.
The report also praises Vietnam as a country that has achieved growth with equity.
“Anybody questioning income distribution matters, might reflect on the fact that the poorest 10 per cent of Brazilians are poorer than their counterparts in Vietnam, a country with a far lower average income,” said Kevin Watkins, the HDR’s lead author and Director of UNDP’s Human Development Report Office.
Yet despite this success, the report also notes some extreme examples of inequality in Vietnam. It stated: “A single hospital visit costs 40 per cent of the monthly income of people in the poorest 20 per cent of the Vietnamese population. These high levels of household health spending have pushed three million people into poverty.”
The 2005 HDR highlights the challenges for countries such as Vietnam in world trade and dealing with the “perverse taxation” of the world’s poorest countries. The US import duty for countries like Vietnam and Bangladesh is roughly 10 times higher than for most countries in the European Union.
Price distortions from export subsidies also have a direct impact on smaller producers. Between 2002 and 2003, rice grown in the US at a cost of $415 a tonne was exported at $275 a tonne, forcing rival rice exporters such as Thailand and Vietnam to adjust to this unfair competition.
The HDI is a composite measure of three dimensions of human development: life expectancy at birth, knowledge as measured by the adult literacy rate and combined gross enrolment ratio for primary, secondary and tertiary schools and; standard of living as measured by GDP per capita and cost of living via purchasing power parity.
The UNDP has published the global HDR every year since 1990. The report presents the latest statistics on human development and addresses major issues of global concern. The HDR is prepared by an independent team of prominent experts and does not necessarily reflect the views of UNDP or the United Nations.
This year’s report, entitled International cooperation at a crossroads: Aid, trade and security in an unequal world, calls for swift and dramatic changes in global aid, trade and security policies to fulfil the promises made when world leaders gathered five years ago at the Millennium Summit.