The World Bank (WB)’ released a report on October 3 showing that East Asia and the Pacific’s annual urbanization rate of 3 per cent has helped lift 655 million people out of poverty in the last two decades.
However, the report titled Expanding Opportunity for the Urban Poor indicates there are still around 250 million people living in slums due to the low incomes or inadequate affordable housing.
In the briefing, the WB’s representative affirmed that Vietnam is the leading country in the region in terms of urban upgrading. According to the report, Vietnam currently has a rapid urbanization rate of 3.3 per cent per year, almost double the growth rate of national population.
Hanoi and Ho Chi Minh City are successfully harnessing the potential of urbanization with income in these cities almost double the income of rural areas, even after adjusting for living costs.
Youth account for a growing number of urban migrants. Within the last five years, there has been 23 per cent of youth between the ages of 21 to 25 moving to the cities, while the youth unemployment in urban areas is increasing.
Due to rapid urbanization, there is an estimated need for 374,000 additional housing units in Vietnam’s cities each year. In order to address this problem, the report suggests that Vietnam will need to develop a flexible and multifaceted system to manage the supply of housing, encourage more affordable housing, enable the provision of transport links for sub-urban areas, and ensure the participation of private and rental housing developers.
The government of Vietnam is taking a pro-active approach to address the increasing demand for housing in urban areas with the US$1.4 billion stimulus package to offer loans to middle-class homeowners and the Housing Law put in place in July 2015 and other important regulations and policies.
WB’s representatives said that rural immigration is not the cause of urban poverty. The point is that we can not stop the flow of rural migrants as they move to the cities to seek for better life; therefore, the government needs to expand opportunities for them via policies to attract investments in education, supply better services as well as implement programs to support disabled and elderly people who cannot participate in the labor market.
“Rapid urbanization is a challenge and an opportunity. Provide low-income residents with affordable transport services or housing, so they can save for their children’s education. Ensure that social protection program is in place to help families cope during difficult times, such as in the aftermath of natural disasters,” said Judy Baker, World Bank Lead Urban Specialist and lead author of the report.
The report recommends ten guiding policy principles that can be adapted to specific circumstances. They include connecting the urban poor with jobs markets, investing in integrated urban planning, ensuring affordable land and housing, recognizing the rights of all citizens to the city, targeting marginalized sub-groups among the urban poor, strengthening local governance and embracing citizen engagement, and investing in better data and information systems, for evidence-based policy making.
