Beyond GDP - The importance of multidimensional well-being measures

“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”
Martin Luther King
By Phung Duc Tung - The Director of Mekong Development Research Institute (MDRI)

Đọc bản tiếng Việt tại đây. 

Rapid and continuous growth over the years has lifted around 40 million Vietnamese people out of poverty. However, growth is now benefiting the rich more than the poor. Inequality in living standards in Vietnam has increased over the years. Vietnam’s GINI coefficient in 1993 was 0.33, but in 2016 it increased to 0.44. In 1993, the richest 20% had an income that was 4.4 times higher than the poorest 20%. By 2016, that income gap was already 10-fold higher.

There are currently around 10 million poor people in Vietnam, most of whom are ethnic minorities living in remote areas with limited access to basic public services, which are of low quality. Existing policies can hardly lift these households out of poverty as they are composed of the elderly living alone, people with disabilities and orphaned children. They need stronger and specific social protection policies which can cover their basic needs at a standard that is higher than the current poverty line. This is either because they cannot participate in the country’s development process, or benefit from macroeconomic growth because they do not have the opportunities nor the capability to seize them.

Education and Health: quantitative achievements but qualitative challenges

On education, in Vietnam there is little discrepancy in school enrollment rates between urban and rural areas, between boys and girls, regions, and primary and lower secondary school levels.

The big issue in Vietnam lies in what students are being taught, quality of education and the gap in education quality received by students.

A review of education quality at the primary school level (VNEN project) shows that test scores in Mathematics and Vietnamese of grade 3 to 5 students in the Northern Mountains, the South Central Coast, the Central Highlands and the Mekong Delta are only half of what students in other regions got, and only a third of the score registered in the Red River Delta and the South East. It shows that education inequality is manifested as early as primary level, with students in less developed areas having fewer opportunities to attain higher levels of education. It is especially true for children from ethnic minorities and those living in remote areas. Differences in quality of education received by students will lead to unequal opportunities and widening gaps in income and living standards of future generations. This means that the goals of narrowing down the rich-poor gap and leaving no one behind would be increasingly hard to attain.

On health, Vietnam has achieved impressive results in improving the health of its people. Life expectancy has increased from 65.2 years in 1989 to 73.6 years in 2019. The policy of universal health insurance coverage is nearly completed.

This achievement is largely attributable to efforts and policies related to public health(1) and the expansion and quality improvement of the commune and village health system. Vietnam is one of 10 countries who rapidly met their Millennium Development Goals (MDGs) on health.

But there are still large and persistent differences in health indicators across regions, ethnic groups and between rich and poor households, including differences in rates of malnutrition, maternal mortality, under-five mortality and access to essential services such as prenatal care. The capacity of health facilities in rural areas (mountainous and islands) is limited, especially due to the lack of qualified and experienced health workers. Centering on hospitals has meant that commune health stations have yet to meet people’s needs for primary healthcare, resulting in an unequal access to quality health services between people from rural, remote areas, and those living in cities.

The absolute increase in household out-of-pocket health spending continues to challenge about 10% of the population that do not have health insurance. Health insurance card holders still have to pay unforeseen and burdensome out-of-pocket amounts such as the cost of using equipment purchased from a socialised source, drugs not covered by insurance and costs of transporting patients, meals and accommodation for family members taking care of patients.

An economy assessed by multi-dimensional and sustainable development metrics

Vietnam is also facing enormous challenges in its ambition to achieve these goals, not just in the areas of poverty reduction and inequality. Vietnam is among the countries most affected by climate change along with epidemics. In particular, natural disasters in the Central region and droughts in the Mekong Delta have become increasingly severe in recent years. Resources for the Targeted Programs are increasingly limited as the budget can mainly cover just regular government expenditures and most donors have withdrawn from Vietnam. Pollution is increasing, especially air pollution in big cities due to the high demand for energy to power economic growth and increasing reliance on fossil fuels. Gender and decent/sustainable job issues have improved but still exist, such as gender-based violence, discrimination at work and in the families, and women’s participation in leadership positions remains low.

More than ever, in addition to economic growth, Vietnam needs to promote the use of indicators of poverty and multidimensional inequality, especially education and health dimensions; sustainable development metrics should be the basis for making economic development policies in order to create a harmonious and sustainable economy that serves the people.



1 Examples are extensive immunization programs, maternity health care programs, and free health insurance schemes for poor households.