Towards a Human Economy in Vietnam
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Globally, the way we run our economies needs to change. Our current economic model, known as neoliberalism, is broken. It is creating huge inequality. 26 people have the same wealth as the bottom half of humanity. It is failing to end poverty and is trapping many millions in poorly paid and precarious work. The COVID-19 pandemic further revealed fatal weaknesses in the current economic model. Therefore, Oxfam is proposing a new economic model, known as a Human Economy.
In Vietnam, the last twenty years have seen significant economic progress for ordinary Vietnamese citizens, especially with a strong record of poverty reduction. Many have seen their lives improved. However, the country’s economy is facing great challenges in ensuring that all citizens benefit from the development process. Our research in 2017 pointed out that Vietnam’s 210 super rich earned more than enough in one year to lift 3.2 million people out of poverty and end extreme poverty.1 It is time for Vietnam to tread a new path, building on its unique history, and shift to a Human Economy.
How would a Human Economy differ from today’s economics? What would that mean for Vietnam?
A Human Economy would measure what matters. The current measurement of economic progress, GDP, is completely outdated and unfit for the purpose. A Human Economy would seek to measure the many things being left out of GDP calculations. They include the distribution of growth between rich and poor people. They include broader measures of wellbeing, multi-dimensional poverty and environmental sustainability. They include factoring in the harm being done to the environment. They include recognising and redistributing the many millions of hours of unpaid care work being performed by mainly women each day. Measuring what matters is vital to planning more progressive and equal economies. A Human Economy will put people and planet before profit. It will build successful economies and societies where people are at the centre of economic thinking; where industry and the market are made to benefit the majority, not simply a rich few; and where planetary and environmental boundaries are not transgressed while social foundations are met.
A Human Economy would focus on bringing an end to extreme wealth. In many countries, including Vietnam, there has been a rapid increase in wealth of a very small minority at the top of our societies.
Having too much wealth in too few hands is not good for any society, and a Human Economy would seek to end extreme wealth and reduce inequality. A key way to do this will be through progressive taxation, where the richest pay their fair share of tax. For example, taxation on inheritance, which Vietnam does not have, is key to building fairer societies, otherwise today’s rich will become tomorrow’s aristocracy. This is unhealthy for the economy.
Tax revenue can be used to provide universal free education and healthcare for everyone. The costs of healthcare and of private tuition and private education weigh heavily on the pockets of Vietnamese people. Free universal healthcare would greatly lessen people’s concerns of getting sick. Investing in good quality public education means that people will not have to spend their money on private schooling and that the children of the poorest will have as much chance as the children of the richest.
Many, especially women, are in very low-paid, low-skilled and precarious jobs. This is true for a large number of Vietnamese citizens living on minimum wage, which is currently not enough to escape poverty. Their work is mainly sewing shoes or garments to provide for global supply chains, generating huge profits for their shareholders whilst paying poverty wages to their workers.
In a Human Economy, this must change. We must see decent work and decent wages. Countries with a fair living wage and good trade unions are among the most equal and progressive in the world. At the same time, we need to ask for more new business models and a spectrum of business approaches that deliver more sustainable and inclusive development. Vietnam should learn from its own experience and the global best practices to foster new businesses that do not focus primarily on profit for a small group of wealthy shareholders.
These are just some of the ingredients of a Human Economy. There are many others. What is clear is that continuing on the same path, with the same economic approach, is not an option. A new approach is needed, both globally and in Vietnam to tackle the dangerous gap between rich and poor, social division and insecurity. A Human Economy, built for the many - not the few, can bring an end to inequality and eradicate poverty for good. A Human economy is to save the environment for the next generations.
Economies across the world have valued GDP growth more than other aspects of national development. But in 2020, nearly half of humanity is living below the poverty line, trying to survive on five dollars fifty a day. Economic growth alone, especially where it is not inclusive, will not beat poverty.