(Luận văn thạc sĩ) the role of local authorities in promoting voluntary social insurance (VSI) in rural areas the case of melinh district, hanoi

UPPSALA UNIVERSITÉT &
VNU UNIVERSITY OF ECONOMICS & BUSINESS
UPPSALA
ƯNIVERSITET

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MASTER THESIS OF MPPM

THE ROLE OF LOCAL AUTHORITIES IN PROMOTING
VOLUNTARY SOCIAL INSURANCE (VSI) IN RURAL AREAS:
THE CASE OF MELINH DISTRICT, HANOI

Author:

Le Thi Lan

Supervisor:

Dr. Sven-Erik Svard

Local supervisor: Assoc.Prof Dr. Tran Thi Thanh Thuy
Class:

MPPM - INTAKE 7

H a n o i, J a n u a r y - 2 0 Ỉ 5


ABSTRACT
Title:
THE ROLE OF LOCAL AUTHORITIES IN PROMOTING
VOLƯNTARY SOCIAL INSURANCE (VSI) IN RURAL AREAS:
THE CASE OF MELINH DISTRICT, HANOI.
Level: Thesis o f M aster Program in Public Management.
Author: Le Thi Lan
Supervỉsor:

Swedish supervỉsor: Dr. Sven-Erik Svard
Vietnamese supervisor: Assoc. Prof. Dr. Tran Thi Thanh Thuy
M aster dense day: Dec 5th, 2014
Aim:

Voỉuntary soci imurance (VSI) is created for mobilizing resources from the
society and encouraging the responsibilit}’ o f the people, reducing the
dependences o f the people to State budget, whiìe improving their readiness to

solve their own problem and that o f community as it comes. Hoxvever, i t ’s
diffìcuỉt to promote VSI in general and in ruraỉ area in particular due to the
limitation o f job and opportunities, low income and awơreness...
Accordingly, local authorities supposed to abide well the regulation on the one
hand and creatively and actively adapt and promote policies that match with
the speciíìc context o f the locality. This thesis used the case o f Melinh district

(Hanoi, Vietnam) to tell a story and to dravv some lesions to be shared on this
topic. This research aims to:
- Review related theories;
- Summarize key related policies and regulations o f the Central govemment,
Hanoi and Melinh authorities
- Make a stake-holder analysis and overvievv o f the current situation,
shedding a light to the achievem ents, shortcom ings, cause and effects o f VSI
effort in Melinh.


Method:
This research has employed both desk-based research revievv and empirical
research including: interview, survey questionnaire to gather information for
analyzing (100 random interviews with native farmers have been conducting,
bringing in lots o f insight about the avvareness, need and capacity o f farmers
in taking part in VSI scheme); a comparative approach for analyzing
information (betvveen policy and practice; theory and policy, practice;
intemational and Vietnam; Socson district and Melinh district). Quantitative
analysis

and

qualitative

interpretation

o f data have

been

used.

The

triangulation helps limiting disadvantages vvhile enhancing the advantages o f
each method for ensuring the reliability and validity o f the íindings.
A stake-holder analysis and the Force Field model o f the drivers and the
restraints o f the change analysis have established the backbone o f analysis o f
the research. Attaching to that, K otter’s theory on leading change helps to
shed a light on the interpretation o f the related policy and practice.
Result & Conclusions:
- Pursuing
- SI is the

sw is o f importance to any states, regardless types and time.
one o f main tools o f sw. Hovvever, the burden to the State budget

on this matter creates a place for many initiatives including VSI.
- VSI has a great advantage in mobilizing idle and ready Capital o f citizens for
budget and increases the sense o f the people in preparing for the risk
situations in the future by VSI, helping the people ensure their better life in
future, enhancing welfare and social development in general, especially in
rural areas. However, “voluntary” capacity requires a number o f conditions
for the membership to afford and take part such as awareness, effectiveness o f
legal system, incom e...
- In Vietnam, VSI in rural area has been the subject o f a system o f law and
regulations, practice and research.


- Using the case o f M elinh’s local authorities in promoting VSI in rural area,

this research has found out:
+

Achievements

o f VSI:

avvareness,

regulate,

organization

structure,

incentives. Thanks to the effect o f Vietnam Social insurance, NGOs, massmedia, famers, Central govem m ent and local authorities.

+ A number o f shortages due to a range o f constraints: Local authorities take
for granted; men move to city to find a job because o f urbanization in rural
area, matter such as needs more time for family members to discus...
+ A ccording the role o f local authority in the future (implementing policy
better by m aking regulations, choosing key person vvho in charge o f
prom oting VSI, choosing mass-media and speakers...), change must be in
place if the situation to be improved and leading change should be a subject
for discussing. K otter’s 8-steps model o f change can be a good reference for
local authorities.
Suggestions for future research:
Further research can be conducted to explore the way VSI can be better
promoted in the future through integrating practically socio-economical
developm ent strategy with VSI.

Contribution o f the thesis:

-Thesis indicates the potential for the Central government and ỉocaì
authorities:
+ Stake-holder analysis suggests a better analysis o f íorces in the society in
the course o f promoting VSI.
+ Some speciíĩc solutions
+ Suggest better leadership skills to lead change.
- For researcher:
+ Helps researcher understand, better use and adapt some theories and
approach.
Key vvords: Voluntary social insurance, rural areas, Melinh, local authorities,
K otter’s leading change, quality o f life.


TABLE OF CONTENTS

LIST OF ABBREVIATIONS AND A C R O N Y M S ............................................... 2
LIST OF TABLES AND FIG URES...........................................................................2
1. IN T R O D U C TIO N ..................................................................................................... 3
1.1. B ackground...........................................................................................................3
2.2. Research question............................................................................................... 7
2.3. Research purpose................................................................................................ 7
3. FRAME OF R EFER EN C E...................................................................................... 8
4. RESEARCH M E T H O D S ........................................................................................ 9
5. EM PIRICAL D A T A ................................................................................................ 11
6. DESCRIPTIVE A N A L Y SIS..................................................................................11
6.1. Social insurance and Voluntary social Insurance as a policy tenn.................. 11

6.1.1. Social Insurance (SI) ................................................................................. 11

6.1.2. Voluntary sociaỉ insurance (VSI)........................................................... 14
6.1.4. From policy to reality................................................................................19
6.2. The case o f Melinh district............................................................................. 20

6.2.1. Brieffor Melinh district ...........................................................................20
6.2.2. The farmers willing to have VSI............................................................. 23
6.2.3. The reality ...................................................................................................26
6.2.4. Stake-holder analysis ............................................................................... 29
7. REFLECTIONS AND C O N C LU SIO N S........................................................... 34
REFERENCES..............................................................................................................39
APPENDIX 1:................................................................................................................41


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1. INTRODUCTION
1.1. Background
The concept o f social welfare can be understood as the protection o f
society, as the guaranteed society or the safety o f society) has appeared since
the govem m ent o f President Roosevelt (1933-1945) and attached to it is
íìnding the vvay to decide on Human Rights 1948 contract United States o f
America. Social welfare or guarantee society can be understood that the most
common is the guarantee o f an individual's life or the basis o f the members
live in society because society made. It enables members o f society to avoid
the basic loss o f income, empIoyment...from risks to stabilize social life. 1
T.H. M arshalTs (1950) proposed that social citizenship constitutes
the core idea o f a welfare State.2 But the concept must involve the granting o f
social rights. Welfare State cannot be understood just in terms o f the rights it
grants. It must also be taken in to account how State activities are interlocked
with the m arket’s and the fam ily’s role in social provision. The vvelíare State

is as a system o f stratiíication.3
However, in relation to economic policy, the concept o f social
welfare is understood as the uniíịrm measures o f social policy has a direct
effect not onỉy contribute to improving living facility but also protect the basis
o f each member's life in society from risks the direct impact to ensure survival
and socio-economic strata o f the population.
If according to the objectives o f the Commission o f the International
Labor Organization (ILO) in 1951, on the minimum standards o f social
vvelíầre is to be achieved: the medical examination, treatm ent and prevention
o f disease by doctors medicines, medical equipment and health Service when
people get sick; life assurance as involuntary loss o f all or part o f their income

1 Dr. Thanh, N euyen Dinh (2012), The main pillars o f the National Social Security System , Social Insurance
joum al.
Esping-Andersen (1990), The three political econom ies o f the welfare-state. p 2 l.
■ Esping-Andersen (1990), The threc political econom ies o f the welfare-state.


4

as well as keep the additional welfare payments for income themselves and
family members on a regular basis. When the above conditions have been met,
this understanding o f the interests or goals o f social welfare have been made.4
Social welfare (SW ) is o f importance in every State, at any stages o f
development. Thus, s w refers to those policies issuing protective in order to
protect people from risks o f economic and social loss or suffering.
Theoretically, social welfare supported to cover up all population groups.
M ore speciíically, social welfare refers to the protection o f society for its
members by a series o f public measures to shore up the deíicit cantilever
economic and social loss or reduction due to sudden power income because o f

sickness, matemity,

occupational

accidents and

occupational diseases,

unemployment, disability, old age and death, including the protection o f
health care and care for íam ilies with small children or when encountering
disaster groups.
Each nations, depending on political trends, economic levels - social,
historical development and different conditions that build a social welfare
system with the range o f participants and enjoy sales, financial methods and
different implementations.
Based on de-commodifìcation and stratification, welfare states are
different regimes in the difference countries. There are three welfare State
regimes that including the conservative regime (as Japan), the socialist regime
(as Svveden) and the liberal regime (as United State o f A m erica).5
Social Insurance is one o f the main pillars o f the social security
system, contributing to the progress and social justice, stabilize people's lives,
social and political stability. Given its signiíìcance, the state’s capacity and
budget are unable to cover everything because it needs to ensure public
investment in all sectors. Thereíbre, voluntary social Insurance (VSI) is
4 Dr. Thanh, Nguyen Dinh (2012), The main pillars o f the National Socia! Security System , Social Insurance
ịoumal
5 Espins-Andersen (1990), The three political econom ies o f the welfare-state.


5

created for mobilizing resources from the society and encouraging the
responsibility o f the people, reducing the dependences o f the people to State,
vvhile improve their readiness to solve their ovvn problem and community
when it c o m e s..
VSI has many advantages and beneíits. However, it’s diffícult in
implementation o f VSI. It has many difficulties due to many reasons,
especially for the rural areas with the lovv living Standard, lack o f awareness
o f SI and social responsibilities.
In Vietnam, accompany economic developm ent are prịund changes
in social policy system and especially social welfare system. Until now, the
social welfare system in Vietnam, despite various íeature o f a developing
country but have gradually improved and integrated with the social welfare
system o f the world, both in terms o f theoretical and practice.
The social security reform was carried out in 1995 and also ửequently
supplement or amendm ent promptly in accordance with the current situation
o f State o f the economy - social stages. Social insurance is considered as an
important management tool in providing the íinancial and material readiness
and support for the people in the case o f vulnerable or disadvantage situations.
SI is come to tenn.
Law on SI is the crucial framework based on it, the State regulates,
reflecting com m itm ent and the competence o f govem m ent to protect the
future, to ensure the readiness for any circumstances to happen and to
continuously improve the quality o f life. In particular, law on SI and its
regulations creates a guideline to direct behavior and activity o f both
individual

and groups tovvards fulfillment o f respectively

rights

and

obligations; sharing and providing support, ensuring equity and sustainability
o f the system.VSI in the rural areas faces the status that it’s agriculture
economy with low income, high risk in income and living Standard due to the
dependence to the nature. And rural areas are transitioning towards industrial.


6

So it’s a dilemma that although agriculture product is still the key but
agriculture area is narrovv, urbanization changes rural life vvays, income from
agricultural iníluences. It changes their minds on SI. It’s suggested that selffmancing for self protections should be applied and motivated for them in
order to get avvay for that situation.
Given the fact that, it’s noted that social Insurance (SI) in general and
VSI in particular have faced diffículties in getting introduced. Several causes
have been cited including:
1- From the public policy perspective: policy many shortcomings o f the
benetìts o f those who voluntarily participate in.
2- From the perspective o f the citizen,s capacity: that again is divided
into two categories: the awareness and economic situation and status.
3- From the perspective o f professional system: In which Vietnam
Insurance has a role to play.
Given that, the local govemment’s capacity plays a crucial role. This is
shown as a nevvly emerging tendency in Vietnam, matching the new philosophy
o f public administration within public refonn process.
In Hanoi and Melinh district, atĩer the Social Insurance Law in 2008,
studies has not proposed to VSI in rural areas o f Hanoi and the role o f local
govemm ent. In using a case study o f Melinh district in Hanoi, this research

discovers the underlying advantages o f VSI, requirements to boost up the
participation and the challenges that hinder the process. All o f this will be
conducted under the light o f an attempt to justify the role and capacity o f the
local govem m ent in the relation with related stake holders.
Before this research, there has been intensive research on social
Insurance, social welfare studies that aim to provide solutions that cover
Social, Health, unemployment Insurance or social insurance fund safety
through improvement o f policies, administrative rịrms, such as the role o f
the State in the implementation o f social Insurance policies(Bui Van Hong,


7

1997); Rịrm o f administrative procedures in the process o f implementing
social security policies in Vietnam (Linh Nguyen, 2010); Social security for
farmers in market economy context (Mai Ngoe Anh, 2009) ... The People's
Comm ittee o f Hanoi also had Planning o f social network developm ent base in
the province o f Hanoi in 2020, Vision 2030.
There’s a shortage o f researches o f VSI in the vvorld and in Hanoi.
M elinh is a suburban district o f Hanoi city with a large agricultural area. So
we need an in-depth research o f VSI in Melinh district for sampling o f rural
area in Hanoi. The thesis indicates potential for this policy can be
implemented more effectively to creating better quality o f life for rural
citizens. The theories and analysis frameworks o f leading change, leadership
skills were used throughout the research.
K otter’s theory on leading change shed a light on the judgm ent o f the
related policy and practice.
2.2. Research question
This thesis’s conduction to answer the following questions:
1. What are the benefits o f SI in general and VSI in particular?

2 What role do local authorities play in promoting VSI in rural areas in
Vietnam?
3. What are factors hinder them to play that role?
4. What type o f leadership and management system should be in
place for them to do it effectively?
2.3. Research purpose
This research aims at:
1. Understanding the theoretical and íoundation o f SI and VSI from
policy perspectives.
2. Briìng about the policy and regulations setting in Vietnam on that


8

2. Taking a picture on the case o f Melinh district, showing the
achievem ents and shortcom ings in introducing and prom oting VSI to the
com m unities, indentiíying the underlying causes.
4.

Provide

some

im plications

for

policy

formulation

im plem entation to increase the gap o f quality o f life betvveen the urban and
rural areas.
The purpose o f this study is not out o f desire to improve, promote
participation ín voluntary social insurance o f the people, períorm s social
w elfare policies in rural areas better. And hope to narrovv the gap quality o f
life between the inner city and suburban residents.
3. FRAM E O F R EFER EN C E
The K otter’s m odel o f leading change is selected since its relevance
and usetulness for the analysis. It has 8 steps belovv:

8. lnstitutionalizethe new approach
7. Build on the achieved change and add more
6. Plan to create quick wins
5. Empowerothers to act on the Vision
4. Communicatethe Vision

1. Create urgency

Dỉagram 1: K otter’s 8-steps model
Change leadership is associated with putting an engine on the whole
change process. The change process will be made go íaster and more
effíciently.

and


9

This theory helps to understand the essences and challenges o f change,

not impose but self-awareness; hovv to introduce o f change in public sector;
sustain the change impact through sense o f changing, convening the coalition
for change, capacity building bring in stake holders; Vision dravving in the
prosperity. It’s o f importance, especially in public sector. Example: The
citizens want to participate in VSI but not afford to do it (because o f living
cost). If the State wants the people take part in, the govemment has to create
jobs and awareness.
This theory provides a fram ework that helps to set up and realize the
change in terms o f the m indset, the administrative procedures and the
methods in vvhich coordination am ong govem m ent bodies (both from public
administration íunctions and proíessional organizations as vvell as the
voluntary institutions can vvork together).
In seeing the knovvledge and availability as well as the voluntary
behavior as the key to prom ote the advantages and beneíits o f VSI, the
Leading change theory helps to bring in a supplementary methods for current
managing change efforts that have been used in VSI promoting.
4. RESEARCH M ETH O D S
This research has used both desk revievv and empirical research for
this study. Some methods to collect data as: desk-based, intervievv, survey
questions, to analyses, com parative study (betvveen policy and practice;
theory and policy, practice; intem ational and Vietnam; Hanoi and Melinh
district).
We have combined both o f quantitative analysis and qualitative
interpretation o f data. The triangulations help us limiting dovvnside and
enhancing the advantages o f each method.
Desk-based

review

has

many

advantages

as

cheap,

rich

of

information, wide knowledge and variety data from policy, researches,


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joum als... But it has some disadvantages likely out o f date, extremely. Our
desk study has included some vvorks as belovv:
- We reviewed the policies o f VSI o f State from the Central to Melinh
district. We have collected related regulations and data on implement policy
o f VSI in Melinh district from 2009 to 2014 and continuing to collect
documents and data in some rural areas o f Hanoi vvhich have similar duty as
Melinh (reports from Vietnam Social Insurance Agencies, Hanoi Social
Insurance Agencies). So we have collected data on VSI promoting roles o f
local authorities o f some other district in vvhich has the same natural
conditions and has a similar population size (Soc Son district).
- We studied on many researches. They are scientiíĩc joum als, Master
thesis, Ph. D thesis, nevvspapers.

- We studied information on Vietnam social insurance’s website
- Reading some books and articles vvhich related to the subject to get
more information for the research.
We made some survey questionnaire to collect information o f
diffículties or obstacles that local government face in implementing and
sampling in 500 citizens o f 8 communes. We have done in-depth intervievvs
with 9 civil-servants in charge (M anager and executives in Social Insurance
Department).
We made analyses aíter we had described the situation to participate
in voluntary social insurance, which in Melinh district:
- We used the theoretical framework to identiíy some points,
including: the issues vveakness, the shortages and the achievements o f
promoting VSI in Melinh in the connection to VSI policy in general, the local
social and economic status, and the tired budget.
- We used the Force Field model to analysis the drivers and the
restraints o f the change.


11

- Some diagrams and charts are have been used as tools to get
overview the research.
These analyses make me identiíying the problems in promoting VSI
participation. I clearly that issue is the local govem m ents stand betvveen the
two sides, one side is a policy, the other side is the citizens.
5. EM PIRICAL DATA
The empirical data is m eaningíul for a research in vvhich the real life,
real-time evidence helps research is:
- Reliable
- Valid

- Closed to the situations.
Empirical data gained is shown and reílected in the next sections. The
designs are both structured and sem i-structure interviews.
In Processing, there's alw ays note-taking, cross-checking by data
gathered from desk-based.
6. DESCRIPTIVE A N A LY SIS
6.1. Social Insurance and Voluntary social Insurance as a policy term.

6.1.1. Social insurance (SI)
Insurance is considered as policy tool to help for social security. With
their inherent nature, SI is not "insurance" for workers themselves that
"insurance" for their income. O nly when employees participate in social
Insurance and their income is reduced, or lost due to lost or reduced capacity
to work, or working ability cannot be used due to the risk and Insurance

events , then they are "insured". In other w ords, reíers to "offset" clause is lost
or reduced income o f the em ployee, the subject o f social security income.
Impact also object (or objects assurance) o f SI are laborers and their families
in accordance with the provisions o f the social security legislation o f each
country.


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Therịre, it is necessary to distinguish between objects SI, SI
object's impact; benefíciaries o f social Insurance and social Insurance
participants:
Social security beneficiaries are the vvorkers and their families (as
deíĩned by law o f SI) SI arises vvhen the employee meets the insured event or
the risk insuring, the newly social security benìts (as dìned by the

Vietnam Social Insurance law current events and the risks covered include:
sickness,

m atemity,

occupational accidents and

occupational

diseases,

unemployment, retirement, death). SI Participants who are employees, the
employer and the State in some cases. Thus, employees can be both as social
Insurance participants and beneíĩciaries o f social Insurance. For example,
when employees participate in the social insurance, sickness, retirement ...
they are also beneíiciaries o f social Insurance, social insurance allowance

when they are sick or when they retire.
The operational objective o f social Insurance is implementing social
policies o f the State, contributing to a stable life for vvorkers and members o f
their families. Therefore, operation o f social insurance is non-profit activities
and aims o f social security. The value o f SI is the difference that the type o f
commercial Insurance market does not get, because they operate for prìt.

In Vietnam, policy and legal framework are shown on the resolutions,
lavvs and many regulations. The social insurance law was passed by the
N ational A ssem bly o f the Socialist Republic o f Vietnam XI, Session 09th
on 29/06/2006, w ith effect from 01/01/2007; particularly for voluntary
social Insurance and unem ploym ent insurance from 01/01/2008 from
01/01/2009. O rganization

structure o f Vietnam

has a system

vvhich

im pỉem ents policies o f SI.
Social Insurance is a guarantee to replace or compensate for part o f the
income o f the employee vvhen they are reduced or lost income due to sickness,


13

matemity, occupational accidents, occupational

diseases, unemployment,

vvorking age, or death, based close to the social insurance fund.6
And social Insurance principles in Vietnam SI Lavv as belovv:
The level o f social Insurance beneíits are calculated on the basis o f
premiums, vvhile social Insurance contributions and shared among the
participants o f social insurance.
The level o f compulsory social Insurance, unemployment Insurance is
calculated on the basis o f salary and vvages o f workers. Social Insurance
premiums are calculated on a voluntary basis income worker by choice, but
this income is not less than the minimum wage.
The employee had paid compulsory social insurance had paid
voluntary social insurance are entitled to pension and death allovvances based
on time o f social insurance contribution.

Social Insurance Fund is managed uniíied, democratic, open and
transparent, which is used for the right purposes, are accounted for
independent component tunds o f mandatory social insurance, voluntary social
insurance and unemployment insurance.7
The social insurance system is written in Article 4 o f SI Lawx as below:
- Compulsory social insurance includes the following modes: illness;
Matemity; occupational accidents and occupational diseases; Retirement; Death
survivorship.
- Voluntary social insurance includes the following modes: Retirement;
Death survivorship.
- Unemployment Insurance covers the íịllovving modes: Unemployment
benìts; Support for vocational training; Support to fínd work.
6 The national assem bly o f the socialist republic o f Vietnam, 2006, Law o f SI. article 3.
7 The national assem bly o f the socialist republic o f Vietnam, 2006. Law o f SI
* The national assem bly o f the socialist republic o f Vietnam, 2006. La\v o f SI


14

Hovvever, it shouldn’t rely on the State due to the gives íinancial
responsibility and burden it has to bear. In that sense, VSI is initiated and
designed to share with the State and promote the citizen’s responsibility for
them selves. In public management perspective, VSI is a particular mechanism
o f participation or public-private-partnership in dealing social issues.

6.1.2. Voluntary social insurance (VSI)
Voluntary social Insurance is a form o f social Insurance that
em ployees voluntarily participate, selected levels and modes o f play in
accordance with their income for social insurance.9 VSI has many advantages
as íbllovvs:

- State mobilizes idle and ready Capital o f citizens for budget and
increases the sense o f the people in preparing for the risk situations in the future
by VSI.
- VSI helps the people ensure their better life in íìiture.
- VSI enhances welfare and social developm ent in general, especially
in rural areas.
VSI and SI are also protection measurements. Promoting SI and VSI
is an implement to share the burden for the budget, share social responsibility
am ong members o f society.
Fund resources o f SI to be safe for always readily and timely payment
to the participants beneíĩt from the regime. Because o f the risk o f life are
alvvays in a State o f permanent, it can come to anyone, at anytime. SI fùnd is
also funding to achieve the objective o f general social welfare o f all people10.
Thereíore, VSI to be used safely, ensuring balance in the long tenn; must be
increased coverage. This is diffìcult but must drastically. According to the
Resolution no.21: "Respect voluntary social insurance is very important
direction because this is the object occupies a large number o f social, as
9 The national assem bly o f the socialist republic o f Vietnam, 2006, Law o f SI
10 Sinh, D o Van (2014), The People joum al no.205, p27


15

tầrm ers, íreedom labor , the low income ... is vulnerable” 11. However, they
differ in the audience participation and coverage in short.
In Vietnam, under the provisions o f the current Law on Social
Insurance, the insured object is a national voluntary Vietnam in working age
are not subject to compulsory social insurance. Meanvvhile, the subjects o f
com pulsory social Insurance in 5 groups include: people working under labor
contracts vvith a term o f three months or longer sufficient; officials and public

servants; defense workers, police workers; offĩcers, professional military
people's army; Officers, non-commissioned offícers and proíessional officers,
non-com m issioned officer in the police technical people; workers as salaried
cipher for the people's army and police people; commissioned officers and
soldiers o f the People's Army and commissioned officers and soldiers o f the
People's Police served a term; who work abroad have a term that vvas
previously compulsory social Insurance. Thus, participants in voluntary social

Insurance are quite sizable.
Hovvever, in practice, the number o f voluntary social Insurance
accounts for only about 0.3% o f the subịects involved. This figure seems
contrary to the wishes o f the majority o f people, especially people living in
rural areas. The consultation process the draft Social Insurance Law (as
am ended) o f the Commission Regarding social issues that many individuals
w ishing to participate in voluntary Insurance to receive a certain amount as

they become aging. Sum nature o f self defense is especially important for
people who living in rural areas, because o f the risk o f fanning is very large,
low- and no high stability. Moreover, people desire to participate in VSI as
vvell as hieh safety, sponsored by the State, while commercial Insurance to
potential risks and disadvantage.12

11 Sinh, Do Van (2014), The Peoplejoum al no.205, p27
12 Ha, 2014, The Peoplejoum al no.205, p28


16

C hapter IV o f Vietnam SI Law is about VS1. Section 1 (from article
69 to article t6) is regim e o f retirem ent and section 2(from article 77 to article

79) is death allow ance.13
A ccordingly, we can see, the current law has no provision matemity
allowances, sick for subjects participating in voluntary social insurance. This
is different from the object o f m andatory social insurance participants.
Based on proíitability criteria and participant criteria, there are many
issue types as follows:
T able 1: T he location o f VSI in Insurance market
Criteria

Compulsory

Social Insurance

Com m ercial Insurance

CSI

CCI

(Pension regim e, Death

(exp: non-life Insurance

allow ance, sickness regime,

Products as compulsory

m atem ity regime, occupational

Insurance o f civil liability

accidents and occupational

o f motor vehicle ovvners)

diseases regime, unem ploym ent
regime, retirement regime )

Voluntary

VSI

VCI

(Pension regim e, Death

(exp: many others life and

allovvance)

non-life insurance Products
as travel insurance, fire
insurance...)

The pension regim e has shown the value o f SI (both o f CSI and VSI)
that com m ercial insurance cannot.

The national assem bly o fth e socialist republic o f Vietnam, 2006, Lavv o f SI

17

6.1.3. Institution framework
In recent years, the policy o f voluntary social insurance is the level
Party and govem m ent interest. That policy embodied in the vvritten guidance
from the Central to local levels o f VSI, as follows:
- R esolution No. 21-N Q /TW o f the Politburo on strengthening the
leadership o f the Central Party on social Insurance, medical insurance period
2012 - 2020 .
- Government Decree NO.190/200/ND-CP of the Government dated
28/12/2007 guiding a number o f articles o f the Law o f Social Insurance on
voluntary social insurance. The provisions o f this Decree have done írom 1/1/2008.
- Program o f A ction No. 19-CTr /TU o f Hanoi Party Committee
- Planning No. 82/K H -People's Comm ittee o f Hanoi City People's
Com m ittee on strengthening the leadership o f the W orking Party on Social,
Health period 2012- 2020
- D ecision N 0 .999/Q D -SI, O ctober, 2014 from the Director General
o f Vietnam Social Insurance prom ulgated the Regulation on active agents o f
social Insurance voluntary social insurance, health Insurance.

- And the nevvest is Law on Social Insurance 2014 (Amendment)
vvhich has adopted by parliam entary o f the republic o f the socialist Vietnam
on N ovem ber 20th, 2014 .14
Resolution No. 21-N Q/TW o f the Politburo vvith big goals, consistent
unpopular w idely deployed across the country. Implementation o f Resolution
No. 21-N Q /TW dated 17.04.2013, Hanoi Party Committee issued the program
o f action o f

19 -CTr/TU

im plem entation o f city-wide party. Action

Programme aim s to raise avvareness and responsibilities o f committees,
organizing bodies, units and cadres, party members, civil servants, offícials
and people in the Capital in the im plem entation o f Resolution No. 21-NQ/ CT;
im plem ent effective policies, social insurance, m edicaỉ insurance period
ĐAI HỌC QUÔC GIA HÀ NỘI

14 w w w .baohiem xahoi.gov.vn, (N ov, 2014)

I

V _THÔNGTỊN
^ Tllir\
/ICM
ĨRUNG TAM
THƯVỊÊN
(J T 0 5 /I O T O Ắ Q Í


18

2012-2020; increased coverage o f social insurance participants, especially
voluntary social Insurance, towards the goal o f universal health Insurance.
Program m e o f A ction o f the Hanoi Party Comm ittee set specific goals to
strive to 2020, the city o f Hanoi, about 55% o f employees participate in social
Insurance; 45% o f em ployees participated in unemployment; over 85% o f the

insured population; Im proving the quality o f medical care Insurance, to meet
the needs and treatm ent o f the insured; Use safety and ensure the balance o f

the term; system o f social insurance, health Insurance is built in a modem,
proíessional,

efficient,

m eet the

requirements o f industrialization

and

m odem ization o f the econom ic Capital.13

People's C om m ittee o f Hanoi create the Plan N o.82 to implement the
program o f action N o.l9-C T r/T U o f the City Party Committee, Vice
Chainvom en o f People's C om m ittee, Nguyen Thi Bich Ngoe said: “At present
the rate o f the social insurance in Hanoi is about 32%, the percentage o f the
insured is 69 %, w hich is very remarkable results have yet to match the
requirem ents o f socio-econom ic developm ent o f the Capital” .'6 To enhance
the im plem entation o f stronger policies o f social and health insurances in the
province Capital, Vice chairwomen emphasized some important work needs to
be done to focus, such as: The governm ent comm ittees in districts district
should closely follow the direction and implementation o f policies and social

Insurance, health insurance in the province; determine the number o f subjects
participating social insurance, compulsory health insurance which assigned
speciíĩc responsibilities for organizations locally in the propagation and
expansion

o f social

Insurance participants,

MI; actively

interested

in

supporting people classified as poor, informal workers, farmers, pupils,
members o f these groups to conditionally participate in social insurance,
health insurance more. Social insurance agency o f Hanoi and all districts have
'*ĐH (M ay, 2 013), Hanoi city municipal deploys the resolution no.21, website: />lhN goc, N guyen Thi Bich (M ay, 201 3 ), Hanoi city municipal deploys the resolution n o .2 !, website:
http://baohiem xahoi.gov.vn/


19

to strengthen and actively coordinate vvith relevant agencies to revievv updates
o f new businesses subject to social insurance, compulsory health insurance,
bu sin ess requirem ents this strict im plem entation o f social Insurance law,

health Insurance. District leaders also have to strengthen the inspection, test
and urging the implementation o f policies on social Insurance, health

Insurance, and to take m easures to rem ove difficulties and social security
agencies especially

in reducing arrears, inspections, check Processing

enterprises violate SI, H ealth insurance. Improving the quality o f Service at
VSI, quality m edical care Insurance in hospitals and clinics as well as content
to prom ote íurther im plem entation.17
R eview the progress o f the policy:
- Tends increasingly better
- M ore and m ore speciíically
- Integration with other policy refonns on social and economic
d evelop m ent, w elfare and raising Capital.

6.1.4. From policy to reality
VSI in Vietnam: "The implementation o f pension payments and the
mode prescribed by law, the rights o f participants are increasingly expanding.
In particular, the formation, with the balance and preservation, grovvth,
contributing to invest in socio-econom ic development o f the social Insurance

fund is considered one o f the great successes o f the organization o f social
Insurance system VN. However, coverage is still lovv, 20% reached crisis
workforce; State enterprise arrears, evasion SI m uch.18 Thus creating no small
challenge with SI: potentially dìcit; ability to meet, especially in health care
(insurance) is not high.|i;

17 ĐH (M ay, 2013), Hanoi city m unicipal deploys the resolution no.21, \vebsite:
18 Sinh. D o Van (2 0 1 4 ), The People joum al no.2 05, p26
19 Sinh, D o Van (2014), The P eople joum al n o.2 05, p26


20

In current situation, local govem m ents have not played their roles to
their best:

- Policy o f ỉocal authorities is formalistic.
- Procedure o f local authorities has not person in charge o f VSI. Bureau
o f Labor Invalids and Social Affairs o f districts does not focus VSI.
- People's Committees o f districts and communes and towns in the
province is slow in realizing key policies. Example is Decision No. 999/QDSI dated 01.10.2014 o f the General Director o f the Vietnam Social Insurance.
People's Committees o f communes and towns have not been implemented
to compile dossiers and contracted as agents o f voluntary social Insurance.

6.2. The case o f Melỉnh district

6.2.1. Brief for Melinh district


21

r

KỈ.1 Noi Nlunicảpal

Ha Noi P»opl>'i

Part>- coiumittee

Council

Propliĩ?"* CotumUlve o ffic e

D e p a r tm e n t o f In d u stry
a n d T ra d e

D c p A i o n c n t o f P l.t n n in g
an d A ic h ite c tu r c

D e p a itn ic n t o í
E d u c a t io n a n d T ratn in g

D e p a r tm e n t o f ĩm a n c c

D c p a r t m c n i o íT r a n s p o r t

D r p .i i t m r n t o f N a t m a l
R c s o u ic c s and
E n v ir o n n íc n t

ỉ n d u s t r i a l P ark a n d
E x p o r t P io c c s s in g Z o n c
M a n a g e m e n t B o dĩ ti
U i b a n E ỉ u b c ll is h m e n t
B oard

V ie t N a m F a lh e ( I a u d
F i o n t C o m m it t c c

M u n ic ip a l C o m u ũ ttc c o f
N a u o n a lity

H a N o i C o n t> d e r a tio x » o f
L aboi

S ta te T r e a su r y

H a N o i V o u t li U n i o n

D e p a iim c n t o f S c ie n c e
an d T e c h n o lo g y

D c p a itin c tit o f
ln fo m ta i)o n an d
C o m m u n ic a tio n s
D ep a rtm en t o f J u stic e

S t a t e Lỉaixk

\V o m c i» 's U n i o n

D e p a r t m e n t o f L a h o i,
L n v a lid s a n d S o c i a l
A lT a ir s

D e p a r t m e n t o f C u l iu r c ,
S [ i o n s a n d T o u r is m

H a N o i T a x a tio n O ff» c c

V ctcra n s A ss o c id tio n

D c p a r t n iP n t o f
C o Q ỉi r u c u o n

M u n ic i p a l C u s t o m s

O ffỉc c

P e a sa n ts A s s o c ia tio n

D c p a t t m o n t o f F o i e ig n
A f ta ir s

A u t h o r i t y o f P la n n in p .
a n d I n v c s tn ic n t

D c p a r tn ic n i o f H o m e
A X í a iis

H a N o i P o l ic c

H:» N o i U n i o n o t
F r ie n d s h ip O i g a n i ^ a ú o n s

D e p a r t m e n t o f H e a lt h

D e p a iu u e n t o f
A g i i c u l t u i c And R u i.il
D e v e lo p m e n t

D U lric li am ! lo n o t

B a Đ in h D is u ic t

s

C a u G ia v O istn c t

B a V i D is tiic t

D o n (ị D a D iiit iic t

C h u ô n g M y D is t íic t

I la D ử n g D i s t n c i

D a n P h u o n g D is ttic t

H a i B a T r u n g D is t r ic í

T ow n

D o n g , A n h D is t r ic r
G i a l a rì 1 D is t r ic t

H o a n K ir m n is tr ic t
H o a i D u c D is o ic t
H o a n g M a i D is tiic !
L o n g B i r n D is t r ic l
M y D u c L >i5tnct
T a v H o D iỉtiic t
P h u c T h o L >istrict
T h a n h X u a n D is t r ic t
Q u o c O a i D is tiic t
S o u t h T u L i í m D is c r ic t
S<3C S o n L > istiict

N o r th T u L ic m O istT ict

T h a c h T h a t D is t v ic t
T h a n h O a i D is ơ ic t
T h a n h T n D is ttid
T h i i o n g T ĩ n D is t r ic t
U n g H o a D is tn c t
P h u X u y c n D is tn c t

Diagram 2: The political system o f Hanoi city [Source: Hanoi portal]


22

Melinh district is located in the northem o f Hanoi. The district has an
area o f 14251 ha o f natural land and a population o f approximately 220.362
people, 16 communes and 2 towns. The district is in the process o f
industriaỉization and urbanization. Melinh district was the íĩrst Prime M inister
to approve the general direction o f urban planning Melinh 2020 (Decision No.
208/2004/QD-TTg dated 12/13/2004). This is the basic condition for M elinh
economic developm ent - social.20
By adjusting the plans to build the Capital Hanoi was approved by
the Government Prime M inister's Decision N o.l259/Q D -T T g dated 26/7/2011
For Melinh district: Urban areas and basic industries remain under the old
planning area is somewhat narrovver; The rest is rural agricultural areas o f
high-tech and eco-tourism, green belt.21
In recent years, the district has striven successfully implement
comprehensive political tasks o f the locality. Speed economic grovvth
increased 20.8% annually, including: Industry - construction increased by
25.1% per year, increase o f 15.6% services per year, agriculture increased by

1.7% per year. The structure o f the economy continues to shiít towards
industry - construction - agriculture - Service.22

The average annual employment for 2.000 workers; the poverty rate
felt down at 1.27% annual. In the coming years, the district continues interest
in the implementation o f social policy, employment, poverty reduction. 23
To achieve the goal o f socio-economic development, total investment
demand o f the period 2011 - 2020 for the entire district is 43.900 billion VND.
In particular, the demand for the period 2011 - 2015 is 13.000 billion VND; for
2016 - 2020 period is nearly 30.900 billion VND; for 2021 - 2030 period is over
189.000 billion VND. The average demand o f the period 2011 - 2020 is nearly
20 Me Linh portal, 2013, Introduction
:| Government Prime Minister ( July 20] I), D e c isio n N o . 1259
22 Me Linh portal, 2013, Introduction
Me Linh portal, 2013, Introduction