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Is Economic Growth Pro-Poor in Vietnam? Evidence from the Period 1993-1998

Nguyen, Cuong (2004): Is Economic Growth Pro-Poor in Vietnam? Evidence from the Period 1993-1998.

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Abstract

Economic reforms initiated in the late 1980s significantly changed the economy of Vietnam from severe crisis in the 1980s to high growth with an average annual rate of nearly 6% in Gross Domestic Product (GDP) per capita during the 1990s. These economic achievements in turn resulted in significant success in poverty reduction. Between 1993 and 1998, the percentage of the population that was poor declined considerably from 58.1% to 37.4%. This paper found that the “growth with equity” strategy that Vietnam chose to follow during the 1990s was partially successful. Although economic growth was pro-poor during the period 1993-1998, the poor still benefited proportionally less than the rich from economic growth. In addition, the benefits gained from overall economic growth differed considerably between different socioeconomic groups of the poor. On the whole, the poor in the urban areas, which are dominated by the Kinh majority and where the industrial and services sectors are concentrated, benefited proportionally much more than the poor in the mountainous and remote areas where ethnic minorities reside, and the rural areas where the agricultural sector dominates.

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