Resource information
Progress in Vietnam has been substantial
when other dimensions of poverty, apart from expenditures,
are considered. The broader Vietnam Development Goals
(VDGs), which are a localized version of the Millennium
Development Goals, show a consistent improvement of social
indicators, from education enrollment to infant mortality.
While some regions and some population groups gained more
than others, Vietnam continues to reduce poverty
considerably faster than other countries at a similar
development level. In the early 1990s, its poverty rate was
higher than could be expected, given the country's
level of economic development. Some time during the second
half of the 1990s Vietnam caught up with the
"average" country at its development level, and it
largely surpassed it by 2002. The "story" behind
the reduction in poverty has somewhat changed over time.
Earlier gains had been associated with the distribution of
agricultural land to rural households, in a context where
economic reform provided the right incentives for increased
farm production. But those gains have been mainly reaped by
now. In more recent years, the driving forces behind poverty
reduction are job creation by the private sector and the
increased integration of agriculture in the market economy.
A vast majority of the working-age population of Vietnam
actually works, and labor market participation rates are
among the highest in the world. What has changed is not
activity, but rather the composition of employment. Over the
last four years, the proportion of people who mainly work on
their own farm dropped from almost two thirds to slightly
less than half. Instead, many more are now engaged in wage
employment: 30 percent of those at work earned a wage in
2002, compared to 19 percent four years earlier. Thanks to
its buoyant expansion, by 2002 the formal private sector
already accounted for around 2.5 million jobs, more than the
entire public sector. But a much larger number of jobs have
been created by the private informal sector.
