Relationship between Social Security
and the development of the Labour Market in Vietnam
Berlin, dated 9th October 2012
1
Relationship between Social Security
and 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
Content
I. OVERVIEW OF SOCIAL SECURITY OF VIETNAM
II. RELATIONSHIP BETWEEN SOCIAL SECURITY AND LABOUR
MARKET IN VIETNAM
III. CHALLENGES
3
Part I: OVERVIEW OF SOCIAL
SECURITY OF VIETNAM
Social security: 3 pillars/components
Labor market
(Training, job matching,
credit, labour export)
Insurance
Social assistance
(social insurance,
health insurance,
unemployement
insurance, crop
insurance)
(cash transfer, poverty
reduction, social
services)
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.
Regard to the policies on "social insurance"
This is the risk mitigation measures that are most effective for people.
Insurance policies are considered as the "backbone" of social security
because it creates long-term stability of the social security system. All
“expenditures” of benefits are mobilized from the "contribution" of
insured entities (people, businesses, and partial from the State budget)
- Compulsory social insurance;
- Voluntary social insurance;
- Unemployment insurance;
- Health Insurance
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
Part II: RELATIONSHIP BETWEEN
SOCIAL SECURITY AND LABOUR
MARKET IN VIETNAM
RELATIONSHIP BETWEEN SOCIAL SECURITY
AND LABOUR MARKET IN VIETNAM
Social Security
Active Labour Market
Passive Labour Market
(Training, job matching,
credit, labour export)
(Social insurance
and Social assistance)
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
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
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)
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
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.
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.
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
Part III: CHALLENGES
Country context for 2012-2020
• GDP growth stable >> Vietnam aims at becoming a middleincome 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.
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.
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.
Main targets
TT
1
2
Indicators
2015
2020
Participation in health insurance (millions)
91,7
96,2
Of which: Fully subsidized
29,4
25,5
Partly subsidized
36,9
38,7
- Coverage rate by health insurance ( %)
80,0
90,0
Participation in social insurance (millions)
20,2
28,4
- Compulsory (formal sector)
16,0
22,0
- Voluntary (informal sector)
4,2
6,4
38,4
51,8
- Coverage of total labor force (%)
Hanoi, 19 April
22
Main targets (cont.)
I
N
3
4
Indicators
2015
2020
- Participate in Unemployment scheme
(million)
10,0
15,7
Coverage of total labor force (%)
19,01
28,64
2,0
2,3
1,70
1,80
2,2
2,4
1,9
1,9
Paticipation in social assistance schemes
(million)
of which: Regular assistance
- Coverage % of population
of which, coverage of regular assistance,
Hanoi, 19 April
23
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
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
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
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
Concerns to be shared
1. Common languages on Social protection at International and
national levels:
2. Initiative on Social Protection Floor for all and Road map for
universal targeting: building Government Donor Partnership on
implementation of strategy ;
3. Policy to support special groups: Cash transfer for hard core
poor; conditional cash transfer for the children from poor HH to
go school;
4. Community based schemes: Pilot Community Development
Fund, Community Disaster prevention Fund;
5. Strategy for participation of informal sector in voluntary social
insurance schemes:
Thanks for your attention