New WB study sheds light on drivers of VN's socio-economic development

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Other factors include endowment of productive assets, access to education and healthcare, traditional institutions and local governance, gender roles, perception of ethnicity, and access to external support.

By shedding light on this intricate set of drivers behind the top- and bottom-performing ethnic groups, the study is expected to inform the ongoing revision of development policies and programs for ethnic minorities, which are estimated to account for 84 percent of the population remaining poor by 2020.

Minister-Chairman of the Committee for Ethnic Minority Affairs (CEMA) Do Van Chien applauded the timely support from the World Bank and the Australian Government who sponsors this study through the “Australia-World Bank Group Strategic Partnership in Vietnam – Phase 2 (ABP2)” program.

“We find this research a valuable source of reference for our policy formulation process, especially at the time when we are now working with concerning ministries and provinces to draw up a Master Proposal on Comprehensive Investment Plan for Socio-Economic Development in the Ethnic Minorities, Mountainous and the Most Difficult Areas for the Post 2020 Period,” Chien said.

The poverty rate among Vietnamese ethnic minority groups was 23 percent (2016), three times higher than the national average.

According to the study, the pathway out of poverty for top-performing ethnic groups, which in this case are Muong and San Diu groups, depends partly on the good connection between where they live and basic infrastructure and economic clusters.

These groups are generally subject to better access and endowment of resources, enabling them to diversify their livelihood strategies. Particularly, these groups engage in cash crops in addition to rice, actively look for wage employment in factories, and find ways to interact with key stakeholders who determine resource allocation.

Another component of the study involves a policy mapping exercise to assess the extent to which existing policies promote these drivers.

The mapping results indicate that the current system places emphasis mainly on physical connectivity and access to public services as well as credit while leaving some areas “blank”.

The study suggests a number of policy recommendations, including refocusing future ethic minority development agenda and enhancing the existing policies and mechanisms.

Future policies should focus on soft investment in production support and capacity development, access to labor market, women’s economic empowerment while addressing misperceptions and social stigmas.

Meanwhile, current mechanisms should go beyond physical connectivity improvements towards strengthening market institutions and actors to support doing business in ethnic minority areas.

“From the study, we see tremendous opportunities to further advance the inclusion agenda by consciously adopting a differentiated approach towards development in ethnic minority areas,” said World Bank Country Director for Vietnam Ousmane Dione.

“Vietnam can count on the World Bank’s support in mainstreaming this agenda through investments in transport and infrastructure in rural and mountainous areas, agricultural diversification, as well as support for the National Targeted Programs”.