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Hanns Seidel Foundation Vietnam

Hanns Seidel Foundation Vietnam
Unit 703, Opera Business Center
60 Ly Thai To
Hanoi, Vietnam
Tel: +84-4-39388677/8 | Fax: +84-4-39388676
E-Mail: vietnam@hss.de

Social cohesion in Vietnam: looking at the bigger picture

A meaningful one-day workshop on the topic of “Social Cohesion Policies in Viet Nam” took place in Hanoi on Wednesday, May 30th 2012. The event was organized by the International Labour Organization (ILO), the Institute of Labour Science and Social Affairs (ILSSA), OECD Development Centre and Hanns Seidel Foundation. Representatives of these organizations, as well as the Ministry of Labour, Invalids and Social Affairs (MOLISA) and various other participants followed the presentations and shared their thoughts in the discussions on the issue of social cohesion in Vietnam. Mr. Nguyen Trong Dam, Vice Minister of MOLISA, conducted the event and commented on the ideas of the speakers as well as remarks of other participants. He thanked the Hanns Seidel Foundation for their engagement and honored the seminar on social cohesion as „one of the first times we assessed this new approach“.

Presenting the findings of the OECD-report on “Social Cohesion in a Shifting World”, Dr. Juan R. de Laiglesia, economist at the Poverty Reduction Unit of OECD Development Centre, alluded that the process of rapid growth in developing countries presented both a chance and risks for social cohesion, and that now, even in time of crisis, was the moment for these countries to channel recent prosperity into a more ambitious social cohesion agenda. Despite of growth and increase in living standards, some countries showed a decline in life satisfaction. The process of growth also brought along a raised inequality in distribution of income. Dr. de Laiglesia argued that life satisfaction was not only depending on income, though. Social inclusion and equality of opportunity were just some of the aspects that needed to be considered as well. Therefore, a political agenda for social cohesion is a more ambitious social agenda that combines elements like poverty reduction, increased attention to the vulnerable group of the middle class, and socially inclusive policies. Dr. de Laiglesia stressed that the “how” also mattered: Social cohesion should no longer be treated as a by-product, a long-term view was needed and the policy-making process should be more inclusive.

In Vietnam, various social issues call for action. Among them, especially in mountainous areas people have difficulties accessing social services. In urban areas on the other hand, there is an urgent housing problem, and migrant workers provide low-wage work and lack integration. In his presentation, Mr. Carlos Galian of the International Labour Organization noted that there were now more than 20 different policies and schemes on social protection in Vietnam – each with low budget, managed by different ministries, and with overlapping objectives in between policies. The Vice President of MOLISA, Mr. Nguyen Trong Dam, mentioned in his annotation that Vietnam had too many policies, and allowance to target groups was very low. “Social protection policy needs to be under one focal ministry, so they can conduct allowance of social protection services to poor households”, said Mr. Dam.

Mr. Galian furthermore stressed that in an informal economy, contributory systems can´t protect all, and targeted schemes usually leave an emerging middle class out. Around 60 % of the population accounting for this “missing middle” should therefore benefit from economic growth, leaving them vulnerable for economic downturns and letting them feel less attached to the idea of paying taxes to support the social protection system they don't profit by. In this manner, the speaker raised the question if there could be done more for this social group than just voluntary insurance.

Mr. Young Mo Yoon, representing ILO at the event, noticed that Vietnam didn't have good support for taxation, which caused problems for social security programs because of missing financial means. To fight this problem, Dr. de Laiglesia suggested that a stronger and transparent tax administration in combination with improved quality of public services would lead to higher trust of the society, thus making tax evasion less acceptable and creating higher revenues, which would give the state a higher capacity to spend more and spend better on social protection issues.

In the afternoon, Dr. de Laiglesia presented “Social Cohesion Policy Review”, which is a program developed by OECD to assess the status of social cohesion in a society based on a set of indicators, to analyze the impact of a wide range of policies on social cohesion, and to monitor social cohesion progress over time. Its idea is also to improve the contribution of public policies to fostering social cohesion. During the discussion, comments were raised by the audience that Vietnam would have to assess where it stands in the process of becoming a social coherent country, and decide whether it wanted to go that long way. More information and data about different groups of the population would therefore need to be collected, especially information about informal sector workers, who are the most vulnerable target group.

The one-day event definitely contributed to the social protection dialogue. “Social cohesion is a concept that forces us to look on the bigger picture”, Dr. de Laiglesia concluded. Vice Minister Dam stated his appreciation for the workshop and acknowledged that the OECD methodology would be applicable for some selected policies in the future. “Right after this workshop, the MOLISA and ILSSA are going to sit together to develop an action plan to reform the mechanism of social policies in Vietnam”, Mr. Dam said. On all accounts, this seminar was also highly meaningful in the framework of the cooperation between ILSSA and Hanns Seidel Foundation on enhancing the capacity to implement the Social Security Strategy for the period of 2011-2020.