Social Impacts of public investment in Viet Nam

Vu Tuan Anh

Appraisal of investment project

Social Impact

SIA

Economic Impact

Development Project

Political, security and defense impact

Environment Impact

Assessment of economic efficiency

EIA

Contents

1. Social efficiency of public investment in Viet Nam

2. Assessment of social impact of public investment projects

3. Restructuring public investment from the view of social development

1. Social efficiency of public investment in Viet Nam

Economic targets

Social targets

Environment protection

Sustainable development

GDP growth and investment ratio

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051015202530354045

GDP growth Investment ratio

Investment by economic sector (trillion dong, 1994 price)

0.0

50.0

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Khu vuc co von dau tu nuocngoai

20.7 22.8 26.2 28.5 30.7 35.9 43.8 84.6 115.3 105.4 103.8 95.2

Kinh te ngoai quoc doanh 26.3 29.2 35.1 42.8 53.5 62.8 72.9 92.5 89.3 92.8 128.6 122.4

Kinh te nha nuoc 68.1 77.4 86.7 95.5 105.1 115.2 126.6 131.9 128.6 173.1 167.8 145.2

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Investment structure by economic sector

0%

20%

40%

60%

80%

100%

Khu vuc co von dau tu nuocngoai

18.0 17.6 17.7 17.1 16.2 16.8 18.0 27.4 34.6 28.4 25.9 26.2

Kinh te ngoai quoc doanh 22.9 22.6 23.7 25.7 28.3 29.4 30.0 29.9 26.8 25.0 32.1 33.7

Kinh te nha nuoc 59.2 59.8 58.6 57.2 55.5 53.8 52.0 42.7 38.6 46.6 41.9 40.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Public Investment by sector

Investment for economic sector accounts for 75-80% of total public investment

Investment for social sector accounts for 20-25% (science, education, healthcare, culture, sport, state administration, security and national defense, party and union)

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2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Xã hội

Kinh tế

Public investment structure

Agriculture7%

Industry and construction

53%

Trade and service 32%

State admin, nation

al security and defence

4%

Education3%

Healthcare, social security

1%

2011

National target programs, 2011 - 2015 1. Employment and vocational training;2. Sustainable poverty reduction;3. Clean water and sanitation environment in rural areas;4. Healthcare;5. Population and family planning;6. Food hygiene and security;7. Culture;8. Education and Training;9. Anti-narcotics;10. Prevention of crime;11. Efficient and cost-saving use of energy;12. Coping with climate changes;13. Developing new rural;;14. Prevention of HIV/AIDS;15. Disseminating information of mountainous,

disadvantage, border and island areas;16. Surmounting pollution and improvement of environment.

National Target Programs, 2011-2020(National Assembly Resolution 13/2011/QH13 on 09/11/2011)

Total implemented amount: VND 276,372 billion

State budget

38%

Local budget

22%

Foreign capital

7%

Credit capital

15%

Other capital

18%

Orientation of sustainable poverty reduction 2011-2020

On 19/05/2011, the Government issued Resolution 80/NQ-CP directing the sustainable poverty reduction during 2011-2020. 

• By 2020, income per capita of poor households increase by 3.5 times;

• Overall poverty rate reduces by 2 percentage points per annum; for poor commune: by 4 percentage points according to periodical poverty standards;

• Living conditions of the poor improve significantly, particularly healthcare, education, living water and housing;

• Economic and social infrastructure in poor districts and communes, and disadvantaged villages, communes is the focus of investment under the new rural criteria, especially on essential infrastructure such as transportation, electricity and living water. 

Orientation of sustainable poverty reduction 2011-2020

6 groups of policy supporting the overall poverty reduction, including:

1. Supporting the production, vocational training, on-the-job training and increasing income for the poor;

2. Education and training support; 3. Healthcare and nutrition support; 4. Housing support; 5. Supporting the poor in accessing to legislative

consulting services; 6. Supporting the poor in accessing to culture and

information. 

Besides, special poverty reduction policies for special disadvantaged, secured and borer-related areas.

Policies supporting the mountainous areas and ethnic minorities

• Mountainous areas account for 3/4 of the natural areas, there are 53 ethnic minorities amounting to 12.3 million people, accounting for 14.27% total population.

• During 2006 – 2012, policies for mountainous areas and ethnic minority group were institutionalized with nearly 160 legislative documents.

• The Government has arranged financial resources for programs and policies for mountainous and ethnic areas with the total amount of VND 54.770 billion.

• Program 135, Fast and sustainable poverty reduction for 62 poor districts, supporting policies for living lands, living water for ethnic minorities, credit policy for production; settlement supporting policy

Program 135

Implemented since 1998, the Socio-economic development for special difficult mountainous and ethnic minorities (P135) has been on 2 phases:

Phase 1 (1998-2006): Investment capital of VND 10 trillion, on average of VND 500 million (1,870 special difficult communes and border communes), construction and usage of 25 thousand essential works of various types

Phase 2 (2006-2012): Investment capital of VND 20 trillion for 5 years, on average of VND 5.2 billion/1 commune and VND 0.65 billion/1 village (1,848 communes and 3,274 special difficult villages of 50 provinces, 356 districts).

Program 135

Phase 3:

- Investment on the completion of essential infrastructures for production and living conditions, particularly transportation, irrigation system, electricity, schools, kindergarten, community halls.

- Partial support for seed, plant protection and veterinary medicines.

- Improving knowledge on economic development for households, application of advanced technology, establishing new model of production, access to credit, market information, efficient use of land for changing habit of production, and overcoming poverty sustainably.

Social progressPositive results of education for ethnic minority group: • 99.5% of commune has primary school, • 93.2% of commune has secondary school, • 12.9% of commune has high school.

Rapid development of healthcare network, more attention and investment for provincial and district hospitals and communal healthcare stations

• 99.39% of commune has healthcare station,

• 77.8% of commune has certified national standard.

• To 2011, 94.2% of village has healthcare staffs.

Ethnic culture is preserved. Broadcasting infrastructure, communication is paid attention:

• Broadcasting of over 90%

• Television broadcasting coverage of nearly 80%,

• 98.7% of commune has cultural posts.

Poverty fell continuously, albeit high

The poverty rate of mountainous areas is still high: In 2012, North West – 28.55%, North East – 17.39%, Central Highlands -15.58%, North Central – 15.01%, the national average of 9.64%.

Phase 2 of Program 135: • Poverty rate fell from 57.5% to 49.2% as compared to the target of

30%.

• Only 41% households have income per capita above VND 3.5 million/year, while the target is 70%.

• The entrance rate of primary and secondary at the right age is much lower than the planned figures (85.4% vs. 95%; 70.9% vs. 75%).

Despite high investment, infrastructure system is still weak and in shortage, some are often damaged by natural disasters. Low quality of human resources.

2. Assessment of social impacts of public investment project

• Assessment of social impacts is the process of forecasting, analyzing and recommending solutions for the consequences of the development project that can have on the people to obtain the harmonized and sustainable socio-economic-environment outcomes

• Assessment of social impacts is the mechanism to foresee opportunities, challenges, impacts and social risks incurred by the project so that the investment project can be adjusted.

•Assessment of social impacts is a dialogue between different stakeholders (authorities, enterprises, communities, households and individuals)

• It should be implemented during or with Assessment of environmental impacts.

Types of social impacts

1. Impact on the physical aspect of life (eating, wearing, working, traveling, schooling).

2. Impact on the spiritual aspect of life (information, communication, emotional activities).

3. Impact on health and living environment.

4. Impact on culture (changing of habit, social values, religion…)

5. Impact on community activities (exchange, community service, common activities)

Purposes of SIA

Forecast, analyze the impacts of development

programs, projects on people (community,

households, social groups, individuals).

Define and minimize negative impacts.

Increase the socio-economic benefits of

development programs, projects.

Support the administration of social changes

Principles of SIA

• Ensuring the objective approach of direct and indirect impacts of the project on community, household and individual.

• Analyze the equality of impacts: Clearly define the advantaged and disadvantaged people; special attention should be paid to disadvantaged and vulnerable groups.

• Mobilize widely the participation of being-affected people in the planning, decision-making and implementation of the investment project.

Contents of SIA

• Determining the types of social impacts (lifestyle, culture and habits, social values, religion, community relationship, quality of life, safeness, the ability to live together, ensuring future, health, spirit and feeling of happiness).

• Assessing the scope of social impacts (space, time, target groups, level of impacts, consequences)

• Analyzing the reasons (change of residential location, population, livelihood, infrastructure, public services, living environment, institutions).

• Proposing the solutions and developing action plan for minimizing the negative impacts.

• Developing monitoring mechanism and schedule.

Some key questions in SIA

1. Who is affected?

2. Does the project take into account the demand, benefits and ability of beneficiaries?

3. Is there any factor affecting those people?

4. Is there any group that need special attention (women, old people, children, ethnic group,…)?

5. Is there any plan or solution for preventing and mitigating the negative impacts?

6. Does the project need to change anything for ensuring the benefits and the people’s participation?

7. Which solutions should be for improving the coping strategies of the people and other related partners?

Steps in SIA1. Prepare plan, taken into account the participation of

community.

2. Preliminary describe the context and contents of expected program, projects.

3. Define the types and scope of main social issues incurred social criteria

4. Forecast and evaluate the expected impacts, trends and its impact intensity.

5. Analyze reasons and solutions.

6. Develop and implement the solutions an action plan for minimizing negative impacts.

7. Develop and implement the monitoring schedule.

Choosing the information system for assessing social impacts is the prerequisite

Indices

Indicators

Information

Data

Statistics

Access to economics + society + environment: Measuring the quality of life

Access to economics + society

Human Development Index (HDI)UNDP 1990: comprising of 3 pillars: economic

condition (GDP per capita), education and health (life expectancy). The value of HDI ranges from 0 (min) to 1 (max)

• Economic (K): GDP per capita at PPP: from $100 (=0) to $40.000 (=1)

• Education (G): [adult (>15 years) literacy rate x 2/3] + [gross enrollment ratio at all levels x 1/3]: from 0% (=0) to 100% (=1)

• Health (S): Life expectancy from 25 (=0) to 85 (=1)

HDI = (1/3 x K) + (1/3 x G) + (1/3 x S)

Access to society + environment: MDGs

Millennium Development GoalsComposition of 8 groups of criteria (social and environmental ones), including 18 ratios and 48 criteria:

1. Poverty reduction2. Universal primary education3. Gender equality4. Reduction of child mortality rate5. Improving maternal health6. Combating HIV/AIDS, malaria,..7. Environmental protection8. Global partnership for

development

Happy Planet Index (HPI)Introduced by New Economic Foundation (UK). Comprising of criteria: = (Experienced well-being x Life expectancy) : Ecological Footprint= It ranks (country, region,…) on how many long and happy lives they

produce per unit of environmental input.

Implication: Happiness does not mean being rich and more consumption.

Bhutan: Gross National Happiness (GNH)

In 1972, Bhutan (1 million people) proposed the definition of “Gross national happiness” (GNH) than only the GDP.

• Four components of GNH include: (1) sustainable socio-economic development, (2) cultural preservation, (3) environmental protection; and (4) good national governance.

• The four components is disaggregated into 9 sectors: (1) psychological well-being, (2) health, (3) education, (4) Time use, (5) Cultural diversification, (6) Good governance, (7) Community vitality, (8) Environmental protection, and (9) standard of living.

• Comprise of 33 indicators

Defining the group of criteria and main ratio in assessment of social impacts

• Demographics (population, ethnic, gender, age, migration…)

• Community’s resources (land, natural resources, infrastructure, business ability, market…).

• Livelihoods, living conditions, demand of household.

• Community organizations (capacity of authorities and local communities, tradition and habit, social organizational, linkage capacity, …).

• Development institution (plans, schedules, demands,…).

Some methodologies for SIA

1. Comparison of current context and prospect of having a project.

2. Trend analysis based on statistics.3. Using multipliers in population projection

and ratios of employment, housing, income,…

4. Extrapolation from external experience.5. Formulating scenarios based on impact

analysis. 6. Expert consultation.7. Application of quantitative forecast models.

Some notes in SIA• Clearly classify the affected groups.

• More attention for impacts on vulnerable groups (the poor, ethnic minorities, disable people,..)

• Define the priorities (target group, sector)

• Be vigilant with prejudice and previous patterns.

• Develop the solutions for minimizing the certain impact (individuals, households, community – types of lost, ...)

• Pay attention to different layers of impacts and its spillover effects.

• Better livelihoods of the affected people.

• Compensation as the last solution.

Deepening participation of people on the formulation and implementation of investment

project is key to social efficiency

• Decree 29/1988 and 79/2003 on the grassroots democracy• Ordinance of the Standing Committee of National

Assembly No. 34/2007/PL-UBTVQH11 on 20/4/2007 on the implementation of democracy at ward, commune and town level: – Chapter II: Contents published for the people– Chapter III: Contents discussed by and decided directly by people 1) Discuss and directly decide 2) Discuss and decide by authorized agencies 3) Responsibility of implementing the contents discussed and

decided by the people– Chapter IV: Contents proposed by the people before approval by

authorized agencies– Chapter V: Contents supervised by the people

Main steps in mobilizing the community’s participation in the investment project

1. Awareness raising for the community

2. Consultation from the community for the preparation of the project

3. Mobilization of the community’s contribution in the formulation of the project

4. Mobilization of the community’s contribution in the implementation of the project

5. Community’s role in supervising and monitoring

6 steps in community consultation

• Step 1. Define the objectives of consultation

• Step 2. Choose the consulting method

• Step 3. Defining the target group

• Step 4. Preparation the detailed action plan

• Step 5. Consultation• Step 6. Incorporation

of comments and making decision

Objectives

Methodology

Target groups

Planning

Consultation

Decision

Impacts of consultation from community

If no consultation from community:• Do not incorporate the real demand of people• Can not exploit local awareness• Can not mobilize local resources in developing

and implementing project• No consensus, no participation and opposition

from the people Consultation can helps:• Choosing the appropriate alternatives• Mobilizing more contributions and valuable

resources• Gathering all excellent ideas.

Some notices on the participation of community

• Contribution of community – not only increasing the financial resource but also raising awareness, building capacity for community;

• The sooner the participation of community, the better chance for having support

• The participation of each people in the community is very different

• People’s ideas should be grouped up for things related to their benefits

• Can not replace consultation from community by “shortening” way of getting comments from the representatives of organizations.

Supervision of community(Ordinance 34/2007/PL-UBTVQH11)

1. Through the operation of People’s Supervision Committee, Community’s Investment Monitoring Committee.

2. Directly supervise through claim, accusing, petition to functional agencies or petitioning via the Viet Nam Fatherland Front, members of communal father front, people’s supervision and investment monitoring unit.

Requirements of responsibility of agency, organizations, individuals in the people’s monitoring.

1. Provide necessary information and documents timely for People’s Supervision Committee, Community’s Investment Monitoring Committee;

2. Reviewing, solving and timely answering the claim, accusing, petition of residents, recommendations of People’s Supervision Committee, Community’s Investment Monitoring Committee and Viet Nam Fatherland Front...

“Restructuring public investment could be an self-injured treatment of Vietnam’s economy in the coming time. This reform will stop the term thinking , leading to the “achievement disease” investment and moreover, we need to refresh our mindsets”.

(Vietnamnet 26/10/2011)

The principles of sustainable development: Harmonized development of economic-culture, social-environmental protection.

Incorporate the long-term objectives with pressing demands.

Transparency and widely participation of the people

3. Restructuring public investment from the view of social development

Transparency in public investment for anti-corruption

Corruption Perception Index (CPI) draws on the 13 different surveys (may not be necessary 13 in all countries) of 11 international organizations on the popularity and scale of the corrupted money.

  2001 2002 2003 2004 2005 2006 2007 2008 2009

Singapore 4 5 5 5 5 5 4 4 3

Japan 21 20 21 24 21 17 17 18 17

Korea 42 40 50 47 40 42 43 40 39

Malaysia 36 33 37 39 39 44 43 47 56

China 57 59 66 71 78 70 72 72 79

Thailand 61 64 70 64 59 63 84 80 84

India 71 71 83 90 88 70 72 85 84

Viet Nam 75 85 100 102 107 111 123 121 120

Philippines 65 77 92 102 117 121 131 141 139

Indonesia 88 96 122 133 137 130 143 126 111

Laos         77 111 168 151 158

Cambodia         130 151 162 166 150

Thank you very much for your

attention

People discuss

People implement

People check

People know

Sustainable development