The Government's social protection support policy has struggled to prevent vulnerable people from falling into poverty and to protect those already poor from descending deeper into poverty due to COVID-19 pandemic, a survey has found.

A fruit vendor in Hanoi. COVID-19 pademic and its negative impacts make informal
workers like her face more difficulties to make a living. — VNA/VNS Photo Thanh Tung

The survey was run by the United Nations Development Programme, UN Women and the Centre for Analysis and Forecast under the Vietnam Academy of Social Sciences (CAF/VASS) to assess the impacts of the COVID-19 pandemic on vulnerable households, especially those of ethnic minorities and internal migrant and informal workers.  

The telephone survey conducted in April and May this year got responses from 930 vulnerable households and 935 household businesses, micro small and medium-sized enterprises in 58 out of 63 provinces across Vietnam.

The survey's findings were included in the report 'COVID-19 Socio-economic Impact on Vulnerable households and Enterprises: a gender-sensitive assessment' that was released last week.

Under Vietnam’s social protection support packages targeting vulnerable groups, financial support was given to people for three months from April to June.

Regular social assistance beneficiaries and people who contributed to the nation including veterans were eligible for VND500,000/person per month; poor and near-poor people VND250,000/person per month, workers with temporarily suspended labour contracts without salaries VND1.8 million/person per month; informal workers who lost their jobs without labour contracts and who lacked social insurance VND1 million/person per month; and affected household businesses with annual revenue less than VND100 million VND1 million/month.  

According to the Ministry of Labour, Invalid and Social Affairs, by June 18, the cash transfers have been made to 98.7 % of regular social assistance beneficiaries, 109.8 % of those who contributed to the nation (more were found eligible than the initial estimate) and 72.1 % of poor and near-poor households.

In sharp contrast, only 1.14 % of eligible workers with temporarily suspended labour contracts received support. Just 0.24 % of workers who had their contracts terminated and were not eligible for unemployment insurance benefits were aided, with the figure being 0.6 % among workers without labour contracts and social insurance that lost their jobs.

As for household businesses with annual revenues of less than VND100 million that suspended operations due to the pandemic, just 1.28 % got the cash.

“If the Government’s social protection package was delivered on time, for example, if monthly cash transfers were made in April and May and reached all the originally intended groups, the national income poverty rate could have been as little as 17.2 % and 9.9 % instead of 26.7 % and 15.8 % if no cash transfers were made in the two months,” said Director of CAF/VASS Nguyen Thang.

The report shows COVID-19 has caused income to decline substantially across vulnerable households and workers, resulting in a surge in transient income poverty and pushing chronically poor households further into income poverty.

The highest decline in household income due to COVID-19 was recorded in April, with the average income of surveyed households in the month only 29.7 % of the December 2019 level. The figure increased to 51.1 % in May.

The average income of surveyed households declined by more than 70 % in April and 49 % in May, compared to December 2019.

“Transient poverty was a challenge for poverty-targeting of social protection support to lessen the negative impacts of the pandemic,” Thang said.

“The rapid change in the poverty situation resulted in the social protection support package missing many households and people that became poor and near-poor since the pandemic's outbreak, notably the vulnerable (lower middle income) households in rural areas,” he added.

The report also identified several groups left out of or under-served by the Government social protection support package, both by policy design and implementation. 

For examples, families of young workers, especially those with small children, single mothers and/or single bread-winners, those without savings and with house rent burdens, families with members suffering from serious illnesses and under treatment in specialised hospitals, with people with disabilities and the elderly.

These families by design were not eligible for the social protection package even though many of them lost jobs and income and became poor/near-poor. 

Complex rules and procedures in identifying and verifying eligibility prevented several groups from accessing the package. 

These groups include formal workers that lost jobs or had their hours or wages cut but were not eligible for unemployment insurance benefits, informal workers that lost their job or experienced income reductions and affected enterprises that had insufficient resources to pay their workers. 

People also found barriers to accessing Government support, such as the requirements for applications for support for laid-off workers to be submitted by their employer, or applications for support for internal migrant workers to be certified at both the original and destination places of migrant workers.

Caitlin Wiesen, Resident Representative of UNDP in Vietnam, said the actions of the Government of Vietnam and the innovation of the Vietnamese people had been key to Vietnam’s initial success in containing the COVID-19 pandemic and in limiting its negative socio-economic impacts. 

“I believe that similar anticipatory approaches and innovations will play a critical role in helping Vietnamese enterprises and people achieve a bold, sustainable, resilient and gender-sensitive recovery”, she said.

Elisa Fernandez, UN Women Vietnam Head of Office, said the impacts of the COVID-19 pandemic were not equal among different groups of people, nor between women and men. 

“COVID-19 may be more lethal for men, but the socio-economic impacts of the pandemic are hitting women the hardest and exacerbating existing social and economic inequalities.

"A recent study by McKinsey shows that at the global level, women’s jobs are 1.8 times more vulnerable to this crisis than men’s jobs.

"Women make up 39 % of global employment but account for 54 % of overall job losses”, Fernandez said.

“If gender differences in the economic impacts COVID-19, including the burden of care and risk of gender-based violence, are not addressed adequately, it could have a serious impact on women's ability to fully participate in the economy in the longer term. 

“Gender-responsive recovery measures should include strengthening childcare support and respond services, enable women’s access to new sources of employment, reskilling opportunities, and access to credit for women-lead business”, Fernandez said.

Thắng from CAF said a top priority was to assist people and communities vulnerable to extreme poverty because of the pandemic.

“The impact of lost employment and earnings is felt most deeply by the poor. Government action should help those people who have the smallest margin of safety, for whom the loss of income for a few months is catastrophic,” he said.

He emphasised the need to speed up public work programmes that would help generate jobs and incomes as well as cash transfers to protect the livelihood of vulnerable people and boost domestic demand.

He also suggested expanding regular social assistance - cash transfer - targeting categories such as people with disabilities and their carer, children under 6 and elderly aged from 60 to 79, pregnant women or considering the expansion to single-parents working in informal sectors.

A residence-based system of social protection, which excludes internal migrant workers, should be changed to the one based on national citizenship, for example through the digitalisation of registration and verification of eligibility to the application of digital payment tools.