Climbing the ladder: poverty reduction and shared prosperity in Vietnam
Obert Pimhidzai, The World Bank (2018)
Vietnam has achieved remarkable success in reducing poverty while controlling inequality. The country’s broad-based growth reflects the government’s focus on developing labor-intensive export sectors while investing heavily in human capital that saw the country exceed its peers (World Bank, 2016a).
However, gains have been concentrated among the Kinh and Hoa ethnic majority, while minority groups have not only continued to experience poverty rates far above the national average but have seen slower progress too. During 2012-14, poverty among ethnic minorities declined by less than 2 percentage points, leaving close to 58 percent of ethnic minorities still living in poverty. The country’s poverty agenda became more centered on issues of social exclusion. Recognizing this, the government implemented multiple programs aimed at reducing poverty among lagging communities by more than 1.5 percentage points per year.
This report analyzes recent trends in poverty and shared prosperity. It presents the findings of the 2016 Vietnam Household and Living Standards Survey (VHLSS), highlighting important progress and identifying new challenges. The report defines monetary poverty according to the GSO-World Bank poverty line, amounting to the monthly consumption of VND 969 167 per person i.e. equivalent to 2011 PPP $3.34 per person per day. This poverty line was determined in 2010 and has only been updated for changes in the cost of living since then. The Vietnamese government also uses a multidimensional poverty line, which classifies households as poor if they have an income per capita of VND 900,000 in urban areas or VND 700,000 in rural areas and are “deprived” in at least three of 10 dimensions of nonmonetary poverty. Because the thresholds used to determine the multidimensional poverty line are not comparable over time, the report uses the GSO-World Bank approach to assess longterm poverty trends. But the report also provides an update on complimentary non-monetary dimensions of poverty too.