Government spending on social protection in Vietnam, as in many places, is at risk. Beyond the continual need to justify current and proposed future expenditures, there is a more pressing need to make the case for protecting current levels of expenditure in the face of IMF calls for fiscal consolidation.
At the same time, the Government of Vietnam is committed to expanding coverage of social protection, with ambitious objectives and targets for expansion over the coming decades expressed in the Master Plan for Social Assistance Reform and Development and the Master Plan for Social Insurance Reform. Achieving these objectives will very likely require not only protecting, but increasing, investment in social protection in the immediate and medium term. Therefore, setting priorities for how the expansion will proceed, and at what pace, will be critical to ensuring the success of the overall reform agenda.
Since 2015, Development Pathways has supported development partners and the Vietnamese Government in its wide-reaching social protection reform process. Continuing this commitment, Development Pathways was commissioned by the ILO in 2018 to review Vietnam’s social protection expenditures, including proposing a framework for assessing the adequacy of existing tax-financed benefits and offering proposals for improving and protecting their value going forward. Philip James and Shea McClanahan engaged with the ILO and top technical experts from the Government to refine proposals for benefit adequacy and the implications for the Government’s goals for expansion of social protection.
Their work also entailed exploring the evolution and projection of expenditures under the pre-1995 pension regime — which pays tax-financed pensions to people who were state employees prior to 1995 — to assess the potential to free up resources for other social protection commitments. As part of this work, Bjorn Gelders and Shea McClanahan led participatory workshops to train key personnel in the Ministry of Finance.