VietNamNet Bridge – Nguyen Tri Hieu, a financial expert talks to Tien Phong (Vanguard) Newspaper on the importance for the country to create a level playing field to people from all social strata.

Nguyen Tri Hieu. — Photo vov.vn

Don’t you think the increase in the percentage of people getting rich from real estate, stock exchange and virtual currency has raised an alarm for Vietnam?

In developed countries, the middle income class accounts for between 50-70 per cent of the country’s population. It is indisputable these people are the driving force for their national economic development. For Vietnam, we should be happy to have more and more people getting rich quickly. But, Vietnamese people, who are in the middle income class, are not evenly divided. The number of people who earn US$3,000 per month is much smaller than those with an income of US$1,500 – 2,000 per month. This is an issue for us to consider how to have more evenly distribution of income among these high earners.

In Vietnam, the monthly income of a poor household is very low, particularly those live in the countryside or remote areas. For example, most of the poor people live in small and poor housing conditions with an average between 2-4 sq m per person and poor sanitation and health care facilities as well as education.

It is undeniable that the gap between the rich and the poor in our country is getting wider and wider. This phenomenon is rather normal in any developing society. The issue here is how to improve the living conditions for poor people whose monthly income is below average.

It is a fact in Vietnam the “quality” of the income of the middle class is also quite different from the foreign peers. How do you respond to that?

In the US, on an average, the income of a person in the middle class is about US$50,000 per annum. These people mostly work in major companies. Even in the countryside, most of the middle income people work on big farms with stable income. Of course, the segment of people becoming rich from real estate is not really big – they are not the dominant players in the country’s economy. However, in Vietnam, even with people who have won the title “billionaire in US dollars”, most of them come from real estate or having close relations with people in power and business people.

Many people have made money in business through stocks and real estate. This has become a concern for Vietnam as it might become a bubble in the national economy. Is this an indication of the unbalance in the national economy in the perspective of production economy or trade? 

I should say the majority of the middle income or rich class in other countries has been distributed rather evenly from region to region. But in our country, most of them live in big cities like Hanoi, HCM City or Da Nang. Meanwhile, there is a big gap in the income of people living in cities and rural areas. For example, people living some 100 km from HCM City have big problem of sanitation, including clean water and environment.

Compared with other regional countries, income of the middle class in Vietnam at present is just about the income of South Korean people 20 years ago. So in your opinion, what should Vietnam do to have more people joining the middle income class in a near future?

In my opinion, the first thing Vietnam should do is to have a balance between the rich and the poor. To achieve this target, it is important to create conditions for everyone to have opportunities to get rich. However, in my opinion, what Vietnam should do right now is to slash the number of poor people while trying to raise the percentage of poor people to join the club of middle income people. To do that, in my opinion, the first thing we should do is to reform the national education and vocational training system.

The other point I want to mention is the corruption problem. It is undeniable that corruption is a factor creating a big gap between the rich and the poor in Vietnam. Only when we are able to narrow the gap between the rich and the poor, could we be able to win the battle against corruption.

In my opinion, public investment should focus more on infrastructure development and on social security – two important foundations for Vietnam become a prosperous nation.

Other point I want to mention is that Vietnam should focus more efforts in the course of international integration, particularly in the economy. Adding to that is the improvement of our IT technology and foreign language ability.

Source: VNS