A study on impacts of state-own investment on social infrastructure in northwestern vietnam

Nội dung text: A study on impacts of state-own investment on social infrastructure in northwestern vietnam

1. A STUDY ON IMPACTS OF STATE-OWN INVESTMENT ON SOCIAL INFRASTRUCTURE IN NORTHWESTERN VIETNAM MA. Nguyen Van Dai dainv@neu.edu.vn Faculty of Planning and Development, National Economics University, Hanoi, Vietnam Dr. Bui Trung Hai haibt@neu.edu.vn Political and Student Affairs Office, National Economics University, Hanoi, Vietnam MSc. Deo Thi Thuy deothuy@gmail.com Faculty of Political Theory, Tay Bac University, Son La, Vietnam Dr. Phan Thi Thu Hien hienttneu@gmail.com Faculty of Investment, National Economics University, Hanoi, Vietnam Abstract The Northwest region is a difficult area of the whole country, although it is invested from the budget with a large capital. This fact stems from the characteristics of topography and low starting point in socio-economic development as well as the effectiveness of state-owned investment in the Northwestern area is still limited, low social spillover. The data used in this study consists of 2 parts: secondary data from the General Statistics Office of Vietnam and reports from the provincial authorities in the Northwest Region. In addition, primary data from the authors' survey is also used to analyze the impacts of social infrastructure investment based on the perceptions of beneficiaries. The main findings from this study include: Spillover effects from investment in social infrastructure are not commensurate with investment resources; The contribution of social infrastructure investment to social aspects remains unsustainable. Key words: Investment, social impact, state-own investment, social infrastructure 1. Introduction Two economists Paul Samuelson and William Nordhaus argue that investment is a sacrifice of present consumption to increase future production due to an expansion in capital stock. Investment includes tangible capital (factories, machines ), invisible capital (intellectuals, labor force ). Social infrastructure is a 532
2. combination of facilities, places, spaces, programs, projects, services and networks that maintain and improve living standards and quality of life in the community. More specifically, social infrastructure includes housing, scientific facilities, schools, hospitals, cultural and sports facilities and equipment in sync with them. This is an essential condition to serve and improve the living standards of the local citizens, fostering and developing human resources in accordance with the process of industrialization and modernization of each country. Thus, social infrastructure is a collection of a number of sectors with a nature of social services meeting basic needs of human beings. The products they create show up in the form of services and are often public, linked to human development both physically and mentally. Infrastructure investment tends to be large, costly and long-term so that the private sector cannot sustain them. Therefore, the government will play an important role in planning, delivering infrastructure through public investment (Aghion et al., 2013). However, in recent years, public-private cooperation initiatives have been built to sustain and finance large projects such as new demand and technology among rich countries while poor countries in the Global South are frequently in lack of investment to afford high demands of public infrastructure, particularly roads and schools. The private sector and multilateral organizations can also play a role in providing valuable supervision and technical expertise to these infrastructure projects, forming an important component to successful completion. Calderon, Moral-Benito and Serven (2011) conducted an empirical assessment of the long-term output elasticity of infrastructure covering 88 countries between 1960 and 2000. By correlating GDP with human capital, physical capital, and infrastructure measurement, they indicated that output elasticity of infrastructure is statistically significant ranging from 0.07 to 0.10. Similarly, Canning and Bennethen (2000) used panel data from 62 countries during the 1960-1990 period. By achieving a constant return to scale, the output elasticity of the public physical infrastructure is measured at 0.09 for road and power, respectively. In the case of Vietnam, the Northwestern region accounts for a relatively high proportion of public investment with the aim to tackle the developmental issues such as hunger and extreme poverty, high drop-out rate, poor access to healthcare system, low quality of cultural and social facilities. However, the social impacts of this type of investment are the big question for policy makers and local authorities. Research Methodology In this study, the authors used literature review as one of the main methods coordinating with qualitative analysis to study the impacts of social infrastructure investment on social aspects of the Northwest Region. The data used in this study 533
3. consists of two types: (i) Primary data from surveying people in the Northwest on the impact of investment in social infrastructure on their access to basic needs including education, healthcare, cultural activities Further, authors attempted to engage some local citizens for in-depth interviews to explore deep insights into social impacts of public investment on community life; (ii) Secondary data from the 2017 Yearbook and the reports on socio-economic infrastructure investment of the Northwest of Vietnam provided by local authorities. 2. Research results and discussion Improved but unsustainable access to education at all levels Education in the Northwest is closely correlated with the characteristics of the terrain and population distribution of the region. Provinces in the Northwest are all mountainous provinces with complex and difficult terrain. Therefore, investing in infrastructure development in education in the Northwest region is more difficult than the national average. Figure 1: Student-teacher Ratio among Northwestern Provinces Unit: % National average 20.3 17.6 16.7 Central Highlands 18.6 16.8 16.4 Hoa Binh 15.3 12.9 16.6 Son La 17.8 17 19.5 Lai Chau 14.2 17.2 13.5 Dien Bien 15 16.1 13.9 Yen Bai 19.5 18.4 17.5 Lao Cai 13.6 14.9 15.6 0 10 20 30 40 50 60 Student-teacher ratio (Primary) Student-teacher ratio (Secondary) Student-teacher ratio (High school) Source: Yearbook of GSO, 2017 and socio-economic yearly reports of Northwestern provinces The results of public investment in educational infrastructure represent mainly in the increase of schools, classes and conditions to ensure the teaching - learning process of teachers and students. Figure 1 shows three main indicators, including the proportion of student/teacher in primary, secondary and high school levels. It can be seen that this ratio at all 3 levels is 'more ideal' than the common level of the whole country and the Central Highlands, despite the difficulty of topography and education in the remote and mountainous areas where majority of ethnic groups live. 534
4. Figure 2: The Number of Student in each Class in Northern Vietnam 45 40 35 30 25 20 40.7 41.5 37.3 38.1 33.9 34.4 34.2 35.8 35 31.632.3 32.131.8 33.7 15 30.3 28.3 28.7 25.2 26.3 22.4 10 20.1 21.7 20.9 20.1 5 0 Lao Cai Yen Bai Dien Bien Lai Chau Son La Hoa Binh Central National Highlands average Student/class (Primary) Student/class (Secondary) Student/class (High school) Source: Yearbook of GSO, 2017 and socio-economic yearly reports of Northwestern provinces Similar to the student / teacher ratio, the percentage of students in a classroom in the Northwest region is quite small. The low number of students in the classroom can help teaching - learning better. This rate is lower in the Northwest than the national average and the Central Highlands, except for Son La and Yen Bai. This result can be explained by the current situation of educational infrastructure investment in the Northwest as follows: . The infrastructure and classrooms continue to be invested with the planning scheme of the school and class network and the new rural construction program, especially for educational institutions in the highlands, areas with extremely difficult socio-economic conditions, boarding and semi-boarding schools for ethnic minorities. . Schools associated with tourism, business, multicultural schools in the community have promoted advantages, achieved initial significant results, important in promoting and improving the quality of comprehensive education, management innovation, educational methods in the spirit of fundamental reform of education comprehensively; proactively and actively studying and directing activities of approaching the reform of the general education program (Lao Cai) . Scale and system of school networks are increasingly expanding to residential areas, meeting the learning needs of children in ethnic minority areas of 535
5. the province. All communes have preschools, primary and secondary schools; districts and cities all have high schools, vocational education and regular educational centers. Education and training continue to receive the attention of the whole economy; the network of schools and classrooms continues to be expanded. . Consolidating investment in schools and classrooms: Although the concretization rate varies among the Northwestern provinces, the results show positive signs. Specifically: The school consolidation rate reached 57.8% (Dien Bien); 59.1% (Son La); 83.7% (Hoa Binh); 62.8% (Lao Cai) Figure 3: Main reasons for limited access to schooling Unit: % 26 35 44 Stay home as a labor Tough transportation No schools available The education of the Northwest region is particularly concerned because it is the region with the highest concentration of ethnic minorities in the country with high illiteracy and dropout rates as well as low enrollment rates. Despite the fact that the size of a student class, the student / teacher ratio is good compared to the national level and many other regions but that only reflects a minimal part of the impact of education infrastructure investment. The reason for the difficulty in access to education is evident in the results of the survey. 26% of respondents said that they need to stay home as family labor and 30% revealed the lack of schools nearby. As a result, these causes became a tough barrier for education access at the high school level. Meanwhile, 44% of respondents said that transport infrastructure that is not convenient to move to educational institutions is one of the main causes of barriers in education. Obviously, improvement in school facilities if not accompanied by transport infrastructure from home to school, the impact will be limited according to the perceived perspective of the beneficiary of education. 536
6. “My home is quite far from school, in particular high school. It often takes me 2 hours to get to school by bike because the road quality is poor. I was born in a so poor family that my parents cannot afford relatively expensive school fee in private educational institution. That is why I have to attempt to attend school with much more effort” Song Pao Mua, aged 17, Son La Uneven results in healthcare Considering the common level of the whole country on the community-based healthcare system, the Northwestern region is the top priority area to focus on with higher level of development investment because there are many extremely difficult communes. In parallel with this fact, investment capital sources not only focus on capital from the state budget but also other sources. Figure 4: Staffs in Healthcare System among Northwestern Provinces Doctors/10000 populations Health staffs/10000 populations 50.1 50 42.7 40.37 40.33 40 29.7 30 24.88 24.74 22.92 20 10.51 10.98 7.75 8.21 7.71 10 6 5.81 6.23 0 Lao Cai Yen Bai Dien Bien Lai Chau Son La Hoa Binh Central National Highlands average Source: Yearbook of GSO, 2017 and socio-economic yearly reports of Northwestern provinces In terms of proportion, the ratio of doctors per 10,000 people and the proportion of health staffs per 10,000 people in the Northwest is much better than the national average and the Central Highlands. The proportion of doctors per 10,000 people in the Northwest reaches nearly 38 while this rate is only around 25 (nationwide), and 22 (Central Highlands). Meanwhile, the proportion of health staffs per 10,000 people in the Northwest is 8.52, higher than the Central Highlands (5.81) and the national average (6.23). 537
7. Figure 5: Medical Treatment Facilities Accessed by Local Citizens Unit: % 3 12 26 6 7 46 At home (shaman ) Communal medical service unit Private clinic Private hospital District hospital Provincial hospital (polyclinic) Prominent in the survey results of people on medical examination and treatment at health facilities is a group of communal health treatment and traditional remedies. In particular, the role of commune health centers has been confirmed with the proportion of 46% of people who regularly go to medical centers when they have health issues. This demonstrates the positive role of commune-level health care for people. However, 26% of people surveyed said they still use traditional healing methods from healers and wizards. The role of private and district hospitals is quite minimal. This result comes from the fact that long distance as well as transport infrastructure are still difficult to solve, so a few people use this type of medical examination at district level or higher. Another result is also noteworthy that among those who do not seek medical care at official health facilities, up to 50% are self-treated at home with experience, 25% used advice and medical assistance is not clear enough to help them seek medical or treatment facilities. The point is that there has not a home-based health facility and high medical examination and treatment fees appear in 20% and 5% of the respondents in the group who are not treated at the medical facility. Development of tourism, sport and cultural values According to the General Department of Tourism, the Northwest region possesses a great potential of tourism with great nature, unique culture and legendary history. Naturally endowed with a majestic beauty, unique in terrain, climate, geology, landscapes and ecosystems, the Northwest is a special tourist attraction. Northwest with Fansipan summit is called the summit of Indochina, is the desire to 538
8. conquer by many people; Sapa Town in clouds with cool year-round climate; national landscapes Mu Cang Chai; The vast Pa Khoang Lake is located in the middle of a majestic natural landscape with rich vegetation and mild climate; Muong Phang forest is one of national nature reserves with many rare and precious animals and plants of Dien Bien province; Mai Chau valley is peaceful with the colors of plants, rice fields and interspersed with small houses; Moc Chau plateau is large and beautiful with many flowers blooming in the Northwest mountains such as flowers, plum blossoms, cherry blossoms The beauty of the mountains and the Northwest culture always urges travelers away from vibrant cities to reach the open, majestic, peaceful and mysterious heavenly land. Along with the advantages of landscape, traditional culture of ethnic groups is also a highlight in the Northwest tourism resources. The Northwest is home to many ethnic groups such as Tay, Nung, Thai, Muong, Mong, Dao, Kinh, Hoa, Kho Mu, Lao, Lu, Ha Nhi, Khang, La Hu, Si La, Phu La and Bo Y, Mang, Giay, Xo Dang, Lo Lo, Pa Tag, Phu La, Co Lao, La Chi with a large and rich cultural space. Many ethnic groups still keep intact with their traditional cultural identity in customs, practices, festivals, costumes, musical instruments, folk songs and dances such as the Long Tong festival, Khau Vai love market, Then singing, Pi Cap music instrument or in community behavior, housing architecture, village markets Northwest cuisine has its own characteristics and differences. Compared to other regions with chicken, broiled fish, buffalo skin mannequin, buffalo meat and kitchen, Thang Co The result of cultural - sports - tourism group in the Northwest region is considered a bright spot. In the period 2011 - 2017, the cultural infrastructure, sports and tourism in the province were paid attention to, so that the cultural, sports and tourism infrastructure of the provinces have developed, facilitating the organization of provincial, regional and national scale cultural, sports and tourism activities to attract domestic and foreign tourists, contributing to improving the spiritual life for ethnic people in the province. Many cultural works were built with typical high investment rates such as: Provincial Sports Training and Competition Center; Provincial multi-purpose stadium; Provincial stadium; Provincial multi-cultural house; Provincial Museum House; Provincial Exhibition and Information Center with a total investment of VND 800 billion in Lao Cai for Northwestern National Tourism Year (2017) (Lao Cai); Lai Chau has a significant improvement in tourism infrastructure, so far the province has 6 provincial tourist centers. The number of domestic and international tourists coming to the province has increased continuously, about 240 thousand people (2017) increased by 2.35 times compared to 2011. 539
9. 3. Conclusion and policy implications Based on the results of the analysis of impacts of social infrastructure investment in the Northwestern Region on education, health, culture, sports and tourism, this study shows that spillover effect of public investment in social aspect is not commensurate with investment resources; The contribution of social infrastructure investment to social aspects remains unsustainable. This is reflected by first, the quality of investment projects is not guaranteed; secondly, the spreading effect on the beneficiary's life is limited based people's perception. In addition, this impact is not even making a large gap between the provinces in the Northwest Region. The policy implications drawn from the results of this study include (1) Improve the quality of socio-economic development planning and develop an overall investment strategy; (2) Investment decentralization needs to comply strictly with the law and according to the principle of decentralization; (3) Increase investment in science and technology and develop human resources. References 1. Aghion P., Besley T., Browne J., Caselli F., Lambert R., Lomax R., Pissarides C., Stern C., Van Reenen J., 2013, “Investing for Prosperity”, LSE Growth Commission. 2. Calderon C., Moral-Benito E., and Serven L., 2011, “Is Infrastructure Capital Productive? A Dynamic Heterogenous Approach”, Policy Research Working Paper, No. 5682, The World Bank. 3. Canning, D. and E. Bennathan, 2000, "The social rate of return on infrastructure investments," World Bank Working Paper, WPS2390, World Bank, Washington DC. 4. Liang Chuan (2008), ‘Infrastructure Development in China’, in Kumar, N. (ed.), International Infrastructure Development in East Asia – Towards Balanced Regional Development and Integration, ERIA Research Project Report 2007-2, Chiba: IDE-JETRO, pp.85-104. 5. Mu R, Van De Walle D (2007) Rural roads and poor area development in Vietnam. World Bank Policy Research Working Paper No 4340, The World Bank, Washington, DC 6. T.R. Lakshmanan (2011), The broader economic consequences of transport infrastructure investments, Journal of Transport Geography 19, pp. 1–12 7. World Bank (1994), World Development Report, Oxford University Press. 540