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Relationship between Social Security and the development of the Labour Market in Vietnam

Relationship between Social Security and the development of the Labour Market in Vietnam. Berlin, dated 9 th October 2012. Relationship between Social Security and the development of the Labour Market in Vietnam. Presented by: Dr. Bui Sy Tuan

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Relationship between Social Security and the development of the Labour Market in Vietnam

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  1. Relationship between Social Security and the development of the Labour Market in Vietnam Berlin, dated 9th October 2012

  2. Relationship between Social Securityand the development of the Labour Market in Vietnam Presented by: Dr. Bui Sy Tuan Institute of Labor Science and Social Affairs, Ministry of Labor Invalids and Social Affairs of Vietnam

  3. Content I. OVERVIEW OF SOCIAL SECURITY OF VIETNAM II. RELATIONSHIP BETWEEN SOCIAL SECURITY AND LABOUR MARKET IN VIETNAM III. CHALLENGES

  4. Part I: OVERVIEW OF SOCIAL SECURITY OF VIETNAM

  5. Social security: 3 pillars/components Labor market (Training, job matching, credit, labour export) Insurance (social insurance, health insurance, unemployement insurance, crop insurance) Social assistance (cash transfer, poverty reduction, social services)

  6. Regard to the polices on “labour market” There are 3 components as: (i)support to access education and vocational training system, to agriculture, forestry extension services or supports for self – employment; (ii) support to access to the labour market information and; (iii) support for accessing accredit for job generation, or production expansion, or shifting to other business/ production with higher productivity or better income.

  7. Regard to the policies on "social insurance" • Thisistheriskmitigation measures that are most effectivefor people. Insurancepolicies are considered as the"backbone" ofsocial securitybecauseit createslong-term stabilityofthesocial securitysystem. All “expenditures” of benefits are mobilized from the"contribution" ofinsuredentities(people, businesses, and partial fromtheState budget) • Compulsory social insurance; • Voluntary social insurance; • Unemployment insurance; • Health Insurance

  8. Regard to policies on "social assistance": This is the risk mitigation interventions that support people so that they do not fall into impoverishment. The beneficiaries of these policies are mostly vulnerable groups, the poor; therefore the responsibility of ensuring social security belongs to the State. Social support is classified into two groups as regular assistance and emergency assistance

  9. Part II: RELATIONSHIP BETWEEN SOCIAL SECURITY AND LABOUR MARKET IN VIETNAM

  10. RELATIONSHIP BETWEEN SOCIAL SECURITY AND LABOUR MARKET IN VIETNAM

  11. Social security in active labour market • More than 20 credit policies for vulnerable: poor, students, SME enterprises • National Employment Promotion fund since 1992, creating 300,000 jobs annually • Since 2009: Vocational Training program, to support 1 million rural workers annually • Credit policies to support 63 poorest districts on labour export program • Increasing labour market information

  12. Social Insurance • Social security Law (2006): 3 types: Compulsory, voluntary & unemployment benefits • Beneficiaries from 3 schemes increased very fast: 9,6 mill, accounting for 20% of total labor force • In 2010, about 13% of retired people received pension

  13. Health Insurance • Health insurance Law (1/7/2009) aiming at universal coverage in 2014: • Gov support full/part support for poor, near poor, ethnic minority, farmer.. • Large investment in building heath care infrastructure • By 2010: Cover 65% of population (50% are vulnerable)

  14. Social assistance • 2 program: Regular assistance and emergency • Regular: Decision 13/2010/NĐ-CP: cover 12 widely proportion of population (beneficiaries increased from 416.000 (2005) to ,6 mill (2010). • Poverty reduction program: (i) increase accessibility to basic social services; (ii) increase production capacities (land, credits.. ) and labor export; (iii) building up basic infrastructure in poorest districts • Poverty line: 1.6-2$/day and update with CPI increase • Program to support 63 poorest districts

  15. Overall assessment Achievements: • State always paid attention on building and implementing the social security policies. • The legal system and social security policy is increasingly supplemented and perfected. The coverage of policies have been more and more expanded, the level of benefits raised for many schemes. • Resources for implementing social welfare policies are financed with contribution from the state budget and other social actors.. The above results have contributed to the stabilization of the labor market, providing job security for workers, especially the poor, low-income workers, the unemployed, the workers of vulnerable groups, improving the quality of human resources, especially in the mountainous and ethnic minority areas.

  16. Overall assessment Weaknesses: • Job creation and poverty reduction is not sustainable, high percentage of poor and near - poor households falling back into poverty; • The quality of education and training fails to meet the development requirements; progresses of universal education results in many mountainous areas, ethnic minority areas took place in slowly; • Quality of protection and health care services has not met the demands of the people, especially the poor, people in remote areas, ethnic minority areas; • Rate of child malnutrition is high and the reduction took place slowly; • Low coverage of social insurance, health insurance. The difference in social welfare progress indicators between mountainous and ethnic minorities with the national average level is still great.

  17. Overall assessment Causes - Still a poor country, resulting from sever war consequences and frequent natural disasters that caused great damages. - Social security policies have been slowly adjusted to be in line with the economic policies. Absence of effective measures to narrow the gaps in living standard and social welfare status between regions; - poor enforcement policies and legislation; low efficiency of coordination between ministries and localities in practicing and function the state management. - Inspection and monitoring has not been taken seriously and strictly in many provinces. - Resources for implementing social welfare policies is still limited, mainly from on the state budget; the resources mobilized from society is limited

  18. Part III: CHALLENGES

  19. Country context for 2012-2020 GDP growth stable >> Vietnam aims at becoming a middle-income country by 2020; Entering a period of Demographic bonus but also Aging population; Potential deficit of current Social Security Fund . More dynamic labour market development: Moving from rural to urban, agriculture to non agriculture; labour export require more flexible and portable social security policies. Support to people to cope with adverse social impacts from International economic integration International concept and initiative on Social Protection Floor for all.

  20. Key Principles of Social Security for year 2013-2020 Universal, all persons have the right to be safeguarded from social protection and have access to social protection system; Solidarity, means the linkage, support, sharing between individuals, between social groups and state; Equitability and sustainability, binding responsibilities and benefits, between contribution and benefits; Promoting responsibility of individuals, families and communities in ensuring the social protection; Special supports to the poor, vulnerable groups to ensure the minimum subsistence living level in case of risks that cause temporary or forever loss or reduction of income.

  21. Ojective and Targets Overall objective:to gradually expand the coverage and participation of people in social security system; by 2020, basically ensuring that all people get access to and benefit from social security policies; ensuring minimum living standard for the people, contributing to sustainable poverty reduction, political and social stabilization. Targets:include all people, priorities are given to vulnerable groups, including the poor; people living in remote, mountainous and ethnic minority areas; workers in rural areas and informal sector; unemployed workers; the disabled; children; old-age and sick people; those affected by natural calamities, economic and social risks.

  22. Main targets Hanoi, 19 April 22

  23. Main targets (cont.) Hanoi, 19 April 23

  24. Policy measure 1: Support better job and income for vulnerable and poor Increasing accessibility to vocational training Increasing labour shift from rural to non rural sector Better policies to support mobility, especially for rural migrants Public work program for rural and poor Credit policies for labour export program Increasing labour market information and job replacement services Hanoi, 19 April 24

  25. Policy measure 2: Increase coverage of social insurance Better implementation for formal sector Increase associability to vulnerable groups: (i) Pilot partly subsidized contribution for farmers to participate in crop/ agriculture insurance; (ii) creating incentive for informal sector to participate in voluntary social insurance; (iii) Pilot support voluntary social insurance program for the working poor with partly subsidized by Government Increase financial sustainability of Pension fund: Gradually transfer from PAYGO into the NDC financial mode Pilot the social pension for the elderly Hanoi, 19 April 25

  26. Policy Measure 3: Towards Universal coverage of health insurance and quality of health sector Health insurance: • More incentive to target to the rest of 40% of population have not been covered • Enhance accessibility, quality of services; • Better and more benefits to the eligible Health care sector • Pricing model for services; • Build standard treatment procedures • Gradually withdraw from assistance projects by 2020 • Enhance infrastructure, human resource of health sector. Hanoi, 19 April 26

  27. Policy Measure 4: Increase coverage and better targeting of social assistance Increase the coverage: 2-3% of population Ensuring minimum living standard for the people, political and social stabilization. Pilot cash transfer to hard-core poor; children and elderly New government program to support poor, social target groups Public Private Partnership in providing social services, specially in rural, Mainstreaming gender in designing and financing SP assistance program Increase accessibility of urban migrants to social services Hanoi, 19 April 27

  28. Concerns to be shared • Common languages on Social protection at International and national levels: • Initiative on Social Protection Floor for all and Road map for universal targeting: building Government Donor Partnership on implementation of strategy ; • Policy to support special groups: Cash transfer for hard core poor; conditional cash transfer for the children from poor HH to go school; • Community based schemes: Pilot Community Development Fund, Community Disaster prevention Fund; • Strategy for participation of informal sector in voluntary social insurance schemes:

  29. Thanks for your attention

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