Conclusions
During the 1990s and 2000s, poverty declined remarkably in Vietnam. However, poverty remains very high in mountainous regions where there are large proportions of ethnic minority people. Poverty in Vietnam is found to be highly sensitive to economic growth. If income distribution is kept unchanged, poverty can decline faster than the rate of economic growth. Poverty is more responsive to inequality than to economic growth; which implies that if there is an increase in inequality, the extremely poor will be most seriously affected. Vietnam experienced high economic growth during the 1993–98 period. Both poor and non-poor benefited from the economic growth. However, expenditure distribution deteriorated, hampering the impact of growth on poverty reduction. Economic growth during the 2004–08 period was lower. However, both expenditure growth and inequality reduction contributed to poverty reduction during the 2004–08 period. The poverty incidence was reduced by around 5 percentage points, of which expenditure growth and expenditure redistribution accounted for 2.8 and 2.2 percentage points of poverty reduction, respectively. Compared with the 1990s, a larger number of poverty reduction programs were implemented during the 2000s. Thus the ‘growth with equity’ strategy that Vietnam chose to follow was successful. The pro-poor index is less than one for the period 1993–98, but larger than one for the period 2004–08.
