The national poverty line of Viet Nam is to be raised to 300,000 dong (US$18) and 390,000 dong ($23) per capita per month in rural and urban areas respectively to reflect rising inflation. The poverty line is the minimum level of income considered necessary to achieve an adequate standard of living.

The new figures were formulated following consultations between the Ministry of Labour, Invalids and Social Affairs and the Ministry of Planning and Investment and the General Statistics Office.

The rural and urban poverty line currently stands at 200,000 dong ($12) and 260,000 dong ($15) monthly per capita in rural and urban areas and was introduced in 2005. It takes into account basic daily food needs and the cost of clothing and accommodation, health care, education. travel and social communication.

Of a family's total income, 40 per cent is calculated to go on food. The consumer price index (CPI) stood at 12.63 per cent in 2007 and 18.44 per cent in the first half of 2008. It is expected to reach between 24.5-28.5 per cent by the end of the year.

If the 2007 CPI is taken into account (12.63 per cent) and the 2008 CPI (24.5 per cent) the poverty line would stand at 270,000 dong for people living in the countryside and 360,000 dong for people in urban areas. By late 2008, it is estimated that there will be 2.9-3.1 million households classified as poor in Viet Nam, accounting for 15-16 per cent of the population.

The new poverty line is based on the 2007 CPI of 12.63 per cent and a 2008 CPI of 27.5 per cent (300,000 dong and 390,000 dong per capita monthly incomes).

With the poverty line set at this higher threshold, it is calculated that there will be between 3.2-3.4 million poor in Viet Nam, accounting for 16.5-17.5 per cent of the population. The Ministry of Labour, Invalids and Social Affairs has said that from 2009 if the CPI surpasses 10 per cent , the ministry will ask the Government to re-adjust the poverty threshold.

Aside from other benefits, poor students can access credits facilities, while those close to the poverty line can receive Government subsidies on voluntary health cards.

This article first appeared on www.vietnamnews.vnagency.com.vn

July 23, 2008

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