Untitled - Oxfam Blogs

Impacts of Price Hikes
on the Life and Livelihoods
of the Urban Poor
As their purchasing power declines the urban poor and near-poor have to save almost all of their income
for food and other essential items and so cannot save much. This increases their vulnerability to all kinds of
risks, especially those related to their health conditions.
The common response of the urban poor is to take on various jobs in order to earn extra income and at the
same time cut back on expenditures. Most urban poor households manage to buy enough rice but have to
shift to a variety of lower quality and only buy a small amount each time. They also cut fish/pork
consumption or shift to cheaper items, eat out less, shift from gas to coal, utilize second-hand items and
stop all entertainment activities outside of the family.
“Since Tet holiday, nine out of ten households have started using coal for cooking as gas has
become very expensive. Even the price of coal has gone up from 800 VND/piece before Tet
1,500 VND/piece now (June 2008). If we use 2-3 pieces per day then we pay 100 thousand
VND per month. This is still much cheaper than gas which costs 200-300 thousand
VND/month.“
(Core group discussion, Unit 34, Niem Nghia ward, Le Chan, Hai Phong, June 2008)
The way the poor people buy food from the market has also changed. In order to buy cheaper food they
either (i) go to the market very early in the morning when there are more choices or (ii) go to the market
very late in the afternoon to buy discounted left-overs.
The urban poor have cut back on weddings and funerals expenditure which takes up a significant share of
total income. Survey data shows that many poor people have to borrow loans to cover expenses for
weddings which are traditionally considered an “unmissable” social activity.
Poor people - especially the old and weak - would suffer the most if they lost their jobs and income as
inflation rises. There is a low chance of finding the same job in a different enterprise and they may have to
accept a lower salary.
In Lam Ha ward, Kien An district, Hai Phong, a large number of bridge construction workers
have lost their jobs as the company has increased investments in machinery and mechanical
facilities in order to improve competitiveness. The majority of workers are women who have
low skills and salaries. They are entitled to either a lump-sum severance package or an
average pension payment of 500 – 600 thousand VND/month. Most of them find it
impossible to find new jobs. They do not have any land available in their rural home town to
go back to.
With the 20 percent increase of pension payment they now receive an extra payment of 100
– 120 thousand VND/month. However the cost of living has doubled. Mrs. Nh. lives on her
own. She receives a social benefit of 570 thousand VND/month. She feels lucky as at least
she has a grade 4 house given to her by the Government 30 years ago. She tried very hard
to cut back on her expenditures by growing vegetables and collecting fire wood. She also
goes to the market every morning to find discarded crabs. Mrs. H is a 50 year-old widow.
She is sick all the time. Her only son is a drug-user and has been sent to a rehabilitation
centre. At one point she considered selling the grade 4 house provided by the construction
company she once worked for. However she eventually followed her neighbours’ advice and
did not sell it. She would not have had an alternative place to live, even back in her home
town of An Hai district. Indeed, “each of us suffers in our own way...As things become more
expensive we have no choice but to cut down on everything. There is no way to get any extra
income...”
(Discussion with poor women group in Lam Ha ward, Kien An district, Hai Phong, June/2008)
In the price storm, social protection centres where old-aged people and children in difficult circumstances
are looked after are also facing challenges. The assistance level for social assistance recipients according to
Decree 67/CP dated April 13, 2007 is no longer realistic as inflation rises. The minimum assistance level
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