Human Investment Helps Enhance Competitiveness

“Without investing in people, returns from global markets – or foreign direct investment – will remain limited. Investing in human potential is also vital for Vietnam to enhance its competitiveness, and to fully benefit from global economic integration,” said Ms Pratibha Mehta, UN Resident Coordinator in Vietnam, at the launch of Human Development Report 2013 themed “The Rise of the South: Human Progress in a Diverse World” in Hanoi.

Significant progress in Vietnam’s Human Development Index (HDI)

According to the UNDP Human Development Report 2013, Vietnam is one of forty high-achieving countries which performed better than predicted in recent decades. HDI of Vietnam increased 41 percent in the past two decades. In 2012 Vietnam ranked 127th out of 187 countries – which is in the ‘medium’ category of human development category.

The Report suggests four key areas to ensure that we continue to make progress in human development: Enhancing equity; Enabling greater participation of citizens; Confronting environmental pressures; and Managing demographic change.

Mr Bui Thanh Son, Deputy Foreign Minister of Vietnam, said Vietnam always regards its people as the centre of its policies and driver of the development process. Human development plays an extremely important role in achieving national development goals as it is one of three breakthrough stages in the Vietnam social and economic development strategy from 2011 to 2020.

In more than two decades of doi moi (renovation), this policy has been translated into national development programmes, policies and strategies and brought in very important results. Vietnam has achieved many Millennium Development Goals (MDGs) ahead of schedule, particularly those on poverty reduction, universal primary education, and maternal health and reduced mortality rate of children under five.

He said UNDP’s assessments in this report reflect the recognition of international community, including UN organisations, for the determination and effort for human development of the Government and people of Vietnam in recent years and asserted the correctness of human development policies in Vietnam.

“We appreciated the report’s recommendations for continued human development orientations in developing countries, including Vietnam, and we will continue to make every effort to achieve higher human development results in the current process of accelerating industrialisation and modernisation,” he asserted.

The Rise of the South

“By 2030, more than 80 per cent of the world’s middle class is projected to be residing in the South. The Asia Pacific Region will host about two-thirds of the world’s middle class by 2030, with billions of people becoming increasingly educated, socially engaged and internationally connected, though at significantly lower income levels than their counterparts in the middle class of the industrialised North,” said the report. The South has risen at an unprecedented speed and scale. Never in history have the living conditions and prospects of so many people changed so dramatically and so fast.

The report shows remarkable progress in Southeast Asian nations is not only seen in Vietnam but also in Indonesia, Vietnam, Malaysia, Thailand and Brunei. The combined economic output of three leading developing countries alone – Brazil, China and India – will surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom and the United States. In 2011, 61 of the world’s biggest corporations on the Fortune 500 list were Chinese, eight were Indian and seven were Brazilian. Just five years earlier, China had 16 on the list.

How have so many countries in the South been able to transform their human development prospects? Across most of these countries, there have been three notable drivers of development: a proactive developmental state, tapping of global markets, and determined social policy innovation. These drivers do not spring from abstract conceptions of how development should work; rather, they are demonstrated by the transformational development experiences of many countries in the South.

“Economic growth alone does not automatically translate into human development progress. Pro-poor policies and significant investments in people’s capabilities – through a focus on education, nutrition and health, and employment skills – can expand access to decent work and provide for sustained progress,” said the report.

However, the report recommends that the policy waist, tightening the short-term vision, the last inequality and the political system inefficiencies that could threaten the development of national and the world if not addressed promptly.

The report warned, however, that short-sighted austerity policies, persistent inequalities and unresponsive political systems could threaten global and national progress unless corrected.

East Asian countries also face many of the same challenges of developing countries in other regions, such as ageing populations, environmental risks, political pressures and inequality. Therefore, countries will need to stay smart to maintain their momentum.

New institutions can facilitate regional integration and South-South relationships. In this regard, the report recommends the establishment of a new South Commission to share knowledge, experiences and technology as well as to promote trade and investment across the South. Emerging powers in the developing world are already sources of innovative social and economic policies and are major trade, investment and increasingly development cooperation partners for other developing countries.

Anh Mai