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Economic growth and social progress in Ho Chi Minh City

(LLCT) - For more than 30 years of renovation, Ho Chi Minh City has recorded great achievements in economic growth and social progress which is reflected in the growth of GDP, average income, healthcare, employment, hunger elimination, and poverty reduction, etc. However, conflict between economic growth and social progress is rising, especially the broadening gap between the rich and the poor, and the increasing numbers of unsolved social problems. With an analysis of the situation, the article offers possible solutions to better solve the relationship between economic growth and social progress in the City in the coming time.

Key words: Economic growth, social progress, Ho Chi Minh City.

1. Economic growth and social progress in Ho Chi Minh City

Ho Chi Minh City (HCMC) is a major economic, cultural, scientific and technological center, an international exchange hub, a place of potential and advantages for economic, cultural and social development. Currently, it is strongly influenced by the globalization of the 4.0 Industrial Revolution. In this context, the implementation of economic growth and social progress has always been grasped by the City’s Party Committee and authorities at every step, and policies to achieve the development strategy objective include “Improving the quality of growth and competitiveness of the city’s economy, connecting economic growth with cultural development, human construction, social progress, justice, and environmental protection; improving social welfare and citizens’ living quality. Building a good quality, civilized, modern and sentimental city”(1).

a. Achievements

Economic growth: The city’s economic growth rate is high due to appropriate development guidelines and policies. In the period before the renovation (1976 - 1985), the average GDP growth rate of the city was only 2.7% annually. In the 30 years of renovation (1986 - 2016), the average rate was 10.7%, which was 1.6 times higher than the national average. Year over year GDP growth was 8.25% in 2017(2).

Economic structure has also shifted positively towards service-industry-agriculture. In 2015, the city’s economic structure is: Services (59.9%), Industry (39.2%), and Agriculture (0.9%)(3).

HCMC is a place with a high number of industrial parks, production zones, and hi-tech parks, modern trade, and service infrastructures which have created a driving force for the process of urbanization, service development, building a smart city, and improving the quality of life for citizens. Related to this, on November 24th 2017 the 4th session of the XIV National Assembly passed a Resolution on piloting specific development mechanisms and policies in HCMC, effective from January 15th 2018 for 5 years. This Resolution created opportunities for building a transparent, flexible environment, attracting investments for socio-economic development, and effectively mobilizes resources for sustainable growth.

About social progress: HCMC has actively developed plans and action plans to ensure the principles of distribution according to labor results and economic efficiency, as well as according to capital contribution and other forces in production, business, and social welfare. The city aims to integrate economic development with social progress and justice, ensuring that all people have fair access to education and health, culture, and enjoy the development achievements of the City. HCMC also focuses on building harmonious, stable, and progressive labor relations in enterprises. In addition, the City promotes sustainable poverty reduction measures and wishes to reduce the gap between the rich and the poor and between the urban and suburban areas. Furthermore, HCMC strives to improve the quality of people’s lives, help disadvantaged and marginalized people, and ensures a safe and happy life for all people to build a modern and progressive city.

According to the report of the City People’s Committee (2017): Workforce development has been improved in quantity and quality through raising the quality of vocational training (the proportion of trained workers is estimated at 77.5%), organizing career centers, job fairs, and providing jobs for 323,225 people(4).

The people’s healthcare has made important progress in multiple areas by increasing the network of health centers - from 449 in 2012 to 462 in 2016(5) –and by re-organizing the organizational structure from local to municipal level, improving the quality of the medical staff. The rate of child malnutrition among children under 5 years old decreased from 5.3 % in 2011 to 4.1% in 2015; the mortality rate among children under 5 years old in 2011 was 10.04%, and was below 10% in 2015(6). In 2015, the number of children under 1-year-old who were fully vaccinated reached nearly 92%. The average life expectancy of city residents is 76.2 years (compared to the countrywide average of 73.2). In comparison to regional countries, this is clearly a great achievement of HCMC, as the average life expectancy of Thailand is only 72 years, while Malaysia’s is only 73.3 and has an infant mortality rate of about 16%(7).

The hunger elimination and poverty reduction program is also a bright spot. Through 5 phases with 8 adjustments of the poverty line in accordance with the conditions of socio-economic development, the city is currently implementing phase 5 (2015-2020), in accordance with the 5-dimensional poverty approach towards households with incomes from over 21 million VND/person/year to 28 million VND/person/year, including: poverty (social deficit dimension): education and training; medical; employment and social insurance; living conditions (accordance with Resolution No.15/2015/NQ-HDND dated December 9th 2015 of the Municipal People’s Council on HCMC’s sustainable poverty reduction program for the period 2016-2020 and Decision No.58/2015/QD-ND People’s Committee dated December 31st 2015: Promulgating the standard of poverty and pro-poverty in the city for the period of 2016 – 2020). As reported by the Municipal People’s Committee: by the end of 2017, the number of poverty is 25,461 households (1.28 %), the number of households at the poverty threshold is 38,116 (1.91%)(8).

In terms of income inequality in society, according to the HCMC Statistic Office, in 2015 the income of group 1 (the 20% of the lowest income people) was 1,837,800 VND/person/month, up 4.2 times compared to 2004; income of group 5 (the 20% of the highest people) was 11,894,600 VND/person/month, up 4.5 times compared to 2004. The income gap coefficient between group 1 and group 5 expanded from 6.2 times in 2004 to 6.5 times in 2015. This means that the income gap in HCMC between the richest and poorest groups has not improved; however, this difference is still lower than the country average of about 9.7 times.

Spending of citizens is constantly expanding, in accordance with the per capita income of HCMC increasing from 552 USD (1990) to 1,365 USD (2000) and 5,538 USD (2015), 2.62 times higher than the national average. In 2004, the average expenditure per person per month across the city was 826,800 VND, in 2010 it was 2,058,000 VND and in 2014 it was 2,643,400 VND(9).

The Human Development Index (HDI) has improved accordingly. According to the UNDP Report (2015), Vietnam’s HDI in 2012 was 0.752 (up 13.56% compared to in 1999), in which HCMC ranked second (after Ba Ria - Vung Tau) with a score of 0.820. The HDI index of HCMC in the 2008 – 2012 period increased by 1.57% per year on average, 1.7 times higher than the national HDI growth. UNDP has stated that HCMC and Da Nang have similar HDI values as Poland and Croatia(10). This testifies to the city’s efforts in carrying out the human growth model.

The statistics and the above analysis show that the economic growth in HCMC has contributed to improving the people’s lives and promoting social progress. This is an important driving force for ensuring a sustainable development of the city and competitiveness with other provinces, maintaining its position as one of the economic centers of the country, and a city of good quality that is civilized, modern, and sentimental.

b. Limitations

In addition to the achievements, the implementation of economic growth and social progress in HCMC still has limitations that need to be resolved.

Firstly, regarding economic growth: In fact, the economic growth of HCMC is relatively high, but it is not yet sustainable and commensurate with the potential of the City(11); internal economic restructuring is still slow, the proportion of high-value sectors and services is still low, industry is still heavy in processing nature, the business environment remains unclear, there has been slow development of supporting industries, science and technology content in products’ value is still low: in short, the growth is not coupled with reducing income inequality and rich-poor disparity among sectors of population or between urban and rural areas .

Secondly, the connection between economic growth and social progress is not synchronous or thorough. Due to the pressure of economic growth, many districts are less interested in cultural development and social progress. When planning and building socio-economic development programs and projects, many localities only focus on economic benefits, not paying adequate attention to social progress and justice. At the same time, the policy system to implement economic growth and social progress is not consistent with reality and is slowly revised; cultural institutions are asynchronous and incomplete, leading to many cultural legacies -both tangible and intangible - becoming lost or altered. Social evils and crimes (especially among young people) are causing worries. The weakness in State management of culture has not been overcome. The struggle to prevent harmful cultural products (especially on the Internet) faces many issues.

Thirdly, the benefits brought by economic growth are not evenly distributed among social strata, “unsustainable poverty reduction efficiency”(12) means that the pace of poverty reduction tends to slow down. During the 2009-2013 period, the number of poor households was 0.71%, but the city adjusted to the new worldwide standard for measuring poverty, so the number of poor households increased by 2.39% in the 2013-2015 period; “the disparity in life and cultural enjoyment between the inner city and suburban people is becoming greater”(13); and the rich-poor gap is increasing.

Fourthly, the healthcare services and treatment options for people are still limited, especially in local areas. In terms of health, the healthcare network has been expanded but is not yet rationally distributed and remains inconvenient for most people. The quality of medical examinations and treatment has not met the requirements, especially at the grassroots level. The current training of healthcare human resources is also facing difficulties in terms of both quantity and quality. Many hospitals are currently facing a crisis of human resources, especially in suburban areas. Investment in facilities has received significant attention, however it still has not met the needs of patients. There is a lack of general hospitals in the outskirts of the city to reduce overload from inner city hospitals.

2. Some solutions to better implementing economic growth with social progress in HCMC

HCMC has defined the important objectives in the current socio-economic development as follows: “Associating economic development with social progress and justice, ensuring that all people can fairly approach education, health, culture, and enjoy the development achievements of the city”(14). In order to successfully implement the above task, here are some possible solutions:

Firstly, every Party Committee member, government and industry agency worker, social organization member and citizen needs to be thoroughly and deeply aware of the implementation of ‘economic growth-cum-social progress’ at each step, each strategy, and each policy of socio-economic development in the city. By spreading this awareness, we can create unity and action in the political system of the city, aiming at the humanitarian development objectives.

Secondly, promoting the formulation, adjustment, and improvement of mechanisms and policies to implement economic growth and social progress must be a priority. It is necessary to determine which social issues need to be addressed first, meeting the social objectives and policies. Social policies and programs need to be confirmed separately to be appropriate to each object, each locality, and each specific social issue at each specific time. The Party Committee and the municipal authorities should continue to improve management in mitigating the administrative apparatus, strengthening the assignment and classification of management in a clear, reasonable manner, enhancing the autonomy, authority and responsibility of the districts to maximize the creativity of organizations in managing, administering and implementing policies and programs.

Thirdly, enlist international support through strengthening communication and promotion of programs to seek foreign aid; implement the committed objectives when receiving aid; and increase publicity and transparency in the use of international aids.

Fourthly, promote socialization of health, piloting the establishment of medical examination and treatment facilities in the form of public-private cooperation and hospital management models as public-utility enterprises; speed up the implementation of universal health insurance; encourage and support creative ideas, promote innovation and development, especially in the fields of economy, society, science-technology, culture, art, and more. Social development must focus on building a rational social development model, and expand the low-income social class on the basis of constantly improving people’s lives.

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Endnotes:

(1), (3), (11), (12), (13), (14) Ho Chi Minh City Party Committee: Documents of the 10th Congress, Ho Chi Minh City, 2015, p.119, 65, 101, 104, 34, 39-40.

(2) Source: HCMC Statistical Yearbook 2017 and Vietnam Statistical Yearbook 2016.

(4), (8) HCM City People’s Committee: Report on the City’s socio-economic situation in 2017: problems and solutions in 2018. No.217/BC-UBND, dated 26-12-2017, p.9, 16.

(5), (7), (9) HCMC Statistical Office: Ho Chi Minh City Statistical Yearbook 2016, Youth Publishing House, Ho Chi Minh City, 2017, p.311, 347, 327.

(6) HCMC Party Committee: Major issues of the 10th Congress of Ho Chi Minh City Party Congress, period 2015-2020, p.89.

(10) UNDP: National Report on Human Development in 2015 on “Human Growth”, Social Science Publishing House, Hanoi, 2016, p.36.

Dr. Nguyen Minh Tri

Ho Chi Minh City University of Technology

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