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Social Cohesion Policy Review of Viet Nam

image of Social Cohesion Policy Review of Viet Nam

This report examines the effects of recent economic growth in Viet Nam on social cohesion. It finds that recent rapid economic growth in Viet Nam has not resulted in an increase in overall inequality, but the level of inequality was already high. Growth was not particularly inclusive, benefiting most the middle class and the richest households, and favouring less households in the bottom 20th percentile. Income mobility was also high, and while a majority of households experienced upward income mobility, downward absolute income mobility affected one in five households. Economic growth was not particularly job rich with employment growth lagging behind economic expansion.

In particular, important challenges were identified in the area of education and skills policies relating to fast-changing labour market needs. Minimum wage policies had a small but positive effect on employment, but concerns were highlighted over partial coverage and weak compliance. Tax policy and specifically personal income tax had only a small impact on reducing inequality, but transfers from central to local governments produced an equalising effect, albeit with mixed results in terms of satisfaction with public services. Finally, social protection systems have been extended, but important coverage gaps remain among the poor and ethnic minority groups, and informality remains a key challenge for universal extension.

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Introduction

OECD Development Centre

Viet Nam is a unitary state with a single Communist Party, which rules over all organs of government, politics and society. The territory is organised into 58 provinces and 5 major cities, which have provincial status. Each province is split into districts (698 at present), which are in turn divided into communes. The provinces are regrouped into non-administrative regions: Northwest and Northeast (also called Midlands and Northern Mountains); Red River Delta; North Central Coast and South Central Coast (also called Northern and Coastal Central Region); Central Highlands; Southeast and Mekong River Delta The population numbers 90 million and is composed of 54 officially recognised ethnic groups, of whom the Kinh form the majority. With the exception of the Hoa (Chinese), ethnic minority groups live mostly in the highlands (Northern Mountains and Central Highlands) away from the coastal areas and major cities. The current working-age group (15-64) makes up about 70% of the total population.

English

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