New book identifies winners and losers of Viet Nam's Economic boomJan 3, 2002
HA NOI - Despite the rapid economic growth and dramatic fall in poverty of the 90s, the economic boom had winners as well as losers, and income inequality widened in Viet Nam, says a new book, launched today by the General Statistical Office (GSO) in collaboration with the United Nations Development Programme (UNDP).
"Living Standards during an economic boom - The case of Viet Nam",
the fruit of the contribution from more than 50 national and
international researchers, is basically the first book that
systematically utilizes the full richness of the Living Standards
Surveys undertaken by GSO in 1993 and again in 1998 with the support of
UNDP, SIDA and the World Bank.
According to the book, 10% of
households jumped at least two quintiles in their position of the
expenditure distribution between 1993 and 1998 - the "shooting stars" -
and on average their real per capita expenditures rose by 173%." At the
other end were the "sinking stones ," which fell at least two quintiles
and saw their spending shrink by 34% on average over the same period.
Becoming a shooting star
is not a strike of luck but depends mainly on changes in earnings per
hour worked. 60% of the increase occurred as a result of higher wages
and salaries." When the 1993 Survey was taken, for example, a potential shooting star had
annual expenditure of 1,156,000 dong ($94). Five years later, this
number was 3,156,000 dong ($257) or an increase of 2,000,000 dong. On
the other hand, a household becomes a sinking stone mainly because of a huge reduction in earnings per hour worked.
also rose because household workers put in more hours of work per year.
On average, working household members toiled for about 400 more hours
per year in 1998 than in 1993." Surprisingly, the increase was slightly
greater for sinking stones than for shooting stars" perhaps they were
putting in more effort in order to compensate for the drop in earnings
per hour worked ˙ but also because those households found themselves
with more dependents per worker."
Caught between the shooting
stars and sinking stones are the households in the middle, whose per
capita expenditure level rose by 43% in real terms between 1993 and
1998.ó This is a large increase, but it is somewhat less impressive
taking into account that 55% of the rise is because household workers
were working more hours per year.
The book also shows that
demographic factors such as household size do have some influence
whether a household is a shooting star or not.ó But perhaps more
striking are the strong geographic effects: households are more likely
to be shooting stars if they live in urban areas, and if they are close
to schools and roads.
A greater proportion of the population
were shooting stars in the Red River Delta (which is centered on Hanoi)
and the Central Highlands (where coffee cultivation boomed), than
elsewhere, although the proportions were almost as high in the Southeast
and the North Central Coast." Unexpected is the high proportion of
sinking stones in the Mekong Delta, a comparatively affluent region that
nonetheless has pockets of very deep poverty."This may be due in part
to the significant number of landless workers in the region, a group
that was particularly hard hit by the sharp rise in the relative price
of food between 1993 and 1998.
Disasters also hurt, and
sinking stone households were far more likely to be hit by a flood,
drought, or invasion of pests than were shooting stars."The book
stresses the importance of disaster management as a way to alleviate
risks of this type.
Shooting stars are more likely
to live in the 'right' place -near the road, factory, school while a
high proportion of the sinking stones are concentrated in remote areas.
Ethnic minority households incomes are almost 40% below the national
average. The book suggests tackling the problem of remoteness, by
building all-weather roads and providing schools.
is no reason to limit income mobility, according to the book, the
growing gap between rich and poor concerns development experts, who warn
that it would threaten social cohesion, as those left behind by the
economic boom would feel increasingly marginalized and alienated.
ËThe Government and the Vietnamese people have done an impressive job in reducing poverty over the past 15 years. Still, there is a need to intensify efforts to reach out to the poorest of the poor in the most remote and isolated areas of the country. Much more effort is still needed to ensure that the poor genuinely participate in and benefit from the economic boom", said Jordan Ryan, UNDP Resident Representative.Contact informationDang Huu Cu
Tel: (84 4) 942 1495 ext. 179 Fax: (84 4) 942 2267