Hanoi’s “Poor List”

The following is an excerpt from our latest bulletin: Empowering Hanoi’s Poor. In it, we discuss the matter of the Hanoi government’s “poor list”, a list of poor households that are eligible to receive services and subsidies from the government. We also feature the “poor list” prominently in our infographic.

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The Vietnam government’s provision of services for the poor utilizes a targeting system based on household income levels. The Ministry of Labor – Invalids and Social Affairs (MOLISA) constructs the list of poor households based on a poverty line of VND 653,000 (US$ 32.65) per person per month in urban areas and below VND 400,000 (US$ 20) in rural areas (as of 2012)[1], and household income is assessed based on household surveys and community discussions. The list of poor households is updated annually.[2]

In every interview regarding government services in Hanoi, our sources never failed to mention this infamous “poor list” and what they believed were its flaws. The main concern is that many consider the poverty line to be set unrealistically low. The “poor list” threshold of US$ 12.50 per month is even lower than the US$ 1 per day poverty line used a decade ago. Locals argue that there are a large number of households that are unable to meet their basic needs despite having a household income that is too high for poor list eligibility. The 2011 Human Development Report argues that Vietnam needs to expand its coverage for social services in order to achieve higher levels of human development. It states that the “the system of subsidies and benefits available to the poor and disadvantaged is not yet sufficient to ensure universal access to social services”.[3]

 The seemingly obvious solution to this flaw is to raise the threshold, granting more households access to government assistance. However, this solution entails either an expansion of the government budget for poverty alleviation efforts or a smaller share of the pie for each household. As government budgets are unlikely to grow so significantly within one or two years, the most likely outcome of expanding the “poor list” is that each household will receive reduced benefits, which can severely lessen the impact of the assistance on the whole.

Thus, a more sustainable solution would be for other organizations to step in and cater to the needs of the in-betweens – those too wealthy for Vietnam government assistance but still too poor to sustain a decent living. It is important to consider that the “in-between” households have more resources at their disposal than the “poor list” households. They can be assisted in ways such as better employment opportunities or skills training, which are more viable for smaller organizations compared to efforts like building free water pumps or free health clinics.