Income inequality in vietnam 2000 2010

INCOME INEQUALITY IN

VIETNAM 2000 - 2010

Dao Thi Mai Quyen –

Nguyen Thi Hanh Minh

Content Outline

Part 1 – Literature Review

Part 2 - Situation of Income Inequality

in Vietnam in the period from 2000 to

2010

Part 3 - Causes and recommendations

for reducing Inequality in Income

Part 1 – Literature Review

Equity

Headcount index

Lorenz curve

GINI coefficient

Kuznets model

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

~ 15,000,000,000

VND /1,000,000

= 15,000 VND

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

2.1. Income distribution among 5

quintiles

(Quintile

1)Poorest 20%

Quintile 2 Quintile 3 Quintile 4 Quintile 5

2002 6.05 10.01 14.1 20.81 49.03

2004 5.85 9.92 14.3 21.2 48.73

2006 5.79 10.02 14.42 21.32 48.44

2008 5.18 9.62 14.11 21.52 49.56

2010 5.32 9.63 14.41 21.48 49.15

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

2.1. Income distribution among 5

quintiles

2002 2010

Lorenz curve stays the same after 10

years

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

2.2. Income distribution between rural

and urban area

2002 2004 2006 2008 2010

Income gap between urban and

rural arear

347 437.3 552.7 843.0 1059.5

Income of urban/Income of rural

2.26 2.16 2.09 2.11 1.99

90,000

VND

216,500

VND

GSO, Reports on living standards of

households, 2000 - 2010

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

2.3. Income distribution among 8

regions in Vietnam

Monthly Income per capita of 8 regions of Vietnam

(2002-2010) (Source GSO)

Part 2 – Situation of Income

inequality in Vietnam 2000 - 2010

2.4. GINI coeffiecient

Gini coefficient by urban-rural and region in

Vietnam (2002-2010)

Part 3 – Causes and

Recommendations • 3.1. Causes

Unreasonable growth model and resource

allocation mechanism.

The process of

industrialization and

urbanization

Transition from a

centrally planned

mechanism to market

mechanism

Unprofessional business

environment, lack of

transparency

Part 3 – Causes and

Recommendations 3.2. Recommendations

Economic solutions

Redistribution

Poverty Reduction Strategies

Part 3 – Causes and

Recommendations Economics solutions

Credit solutions

2 issues in the process of implementation of

policies related to low-interest credit

How to distribute capital

to the real impoverished people

How to use the capital

effectively and rightly

Credit programs in Vietnam

Loan program to farmers

households.

Bank Credit to the poor

Part 3 – Causes and

Recommendations Investment on Agriculture and socio-

economic field in rural and mountainous

areas:

• restructuring of agricultural production

• planning and constructing social and economic infrastructure in rural areas

• building integrated social centres for agricultural development

• effectively implementing the policies related to land field, tax and prices

• increasing the role and management ability of local officials.

Part 3 – Causes and

Recommendations In mountainous areas:

Expanding the area of food crops/ applying the

advanced techniques

Developing the industries serving the

mountainous areas and sub-industries in remote

areas

Linking forest development with the sedentary,

stable production and life of the household.

Concentrating on construction and development

of the town center

Developing the network of healthcare, culture

and education in remote areas

Part 3 – Causes and

Recommendations 3.2. Recommendations

Redistribution

Redistribution of

Income:

Income tax

Redistribution of

jobs:

+ Support workers in

agricultural sector

+ Enhance the

quality of tertiary and

vocational schools

+ Support and build

up more SMEs

+ Relocate workers

to newly industrial

zones

Part 3 – Causes and

Recommendations 3.2. Recommendations

Poverty Reduction Strategy

Distribute land

to farmers

Reinforce and

better the

infrastructure in

poor areas to

support trade

activities.

Enhance the

awareness of

households

on maternity

health and

safe sex.

Support the

disabled

people, people

who live in

extreme

poverty, families

of the war

invalids.

Conclusion

Need to balance: Efficiency and

Equity

Income Inequality should receive

more and more attention for the sake

of the sustainable growth in the future.

Thank you for listening