Perceived Causes of Poverty and Major Factors Contributing to

Poverty
National (WB and MPI report Local (a survey done by Nam Dong
CPRPL) district PC, 2001: what is the most
serious cause to poverty) (Check with
qlbvr report for huong phu, too!)

Limited and Poor Resources Lack of land (8; 20%) Xxxxxxxx

(land, human capital, access to
credit and extension...) Lack of production facilities
Xxxx
Lack of capital (4; 10%)
Lack of labor (3; 7,5%) Xxx
Low levels of educational Xx
attainment, insufficient and Lack technical knowledge (2; 5%)
unstable employment
Demography-driven Causes Xxxxxxxxxxxxxxxxxxxx
(high birth rate, large household Large household size (20; 50%)
size)
Risk of high vulnerability to
natural disasters and other risks
Risks
Gender inequality negatively
impacts the lives of women and
children
Disease/morbidity and Xxx
poor health: another factor
pushing people into deep
Illness and poor health (3; 7,5%)
poverty
The poor are not given
sufficient conditions to
access the law and their
legitimate rights and
interests are not protected
The Impact of
Macroeconomic Policies
and Reform Policies
(Trade Liberalization,
State-owned enterprises
Reform, etc.) on Poverty

1.3. National Poverty Line Measurement Method (CPRGS report- WB)

Based on the level of the economy and the rate of economic growth, the 
financial resources for the 2001­2005 period, and actual living standards of 
Vietnamese in specific regions, the Ministry of Labor, Invalids and Social Affairs 
(MOLISA) of Vietnam developed a national poverty line(4) for the following 
purposes: identify who are the poor and which communes are poor with specific 
numbers and addresses in order to develop a list of poor households from the hamlet 
and commune level, and that of poor communes from the district level upwards, who 
are eligible for support from the National Targeted Poverty Reduction Program and 
other support policies...  In view of the country’s achievements in poverty reduction 
and economic growth and improvement in living standards, a new poverty line) was 
published in 2001 to be applied to poverty measurement in the 2001­2005 period in 
which the new national poverty line developed by the National Poverty Reduction 
Program is defined at different levels depending on specific areas/regions, based on 
per capita income: VND 80,000 per month for island areas and rural mountainous 
areas, VND 100,000 per month for rural plain areas, and VND 150,000 per month in 
urban areas. In the future, Vietnam will move towards using one common poverty 
line for estimating poverty incidence in the country, taking into consideration 
international poverty standards for comparison purposes. 

2.3. Poverty is concentrated in areas with unfavorable conditions for

making a living
Lesson learnt from PR-135 and community-driven poverty alleviation efforts
Getting out of Poverty PR-135
Look at a bigger picture...
In the year 2004, Huong Phu drawn itself from the list of 1,870 especially
disadvantageous communes. With the facts and figures from the box, my observations
and comparisons are that Ha An in particular and many places in Nam Dong now have
better socio-economic conditions than many other PR-135 places – with roads, irrigation
works, schools, health stations, extension services... On one hand, it proved the strong
efforts of central and regional, local government to drive out of poverty. On the other
hand, it shows the demand of upland people for reducing the less-favored
characteristics of upland areas and for a commitment to community and demand-driven
development, the accountability and good quality of development services.

Whether the reason for the ethnic and many poor people in Huong Phu to get out of
poverty with the miracle “rubber – white gold” or other livelihoods facilitated by a host
of policies, projects, programs – overall,

Nam Dong has showed as one suscessful example of Vietnam in the process of uplands
poverty allievation (so called), or at least show the interest and commitment of the gov
and donor agencies in uplands sustainable livelihoods. There are and will be substantial
capital investments in power, roads and social services (CIAT livelihood report). There are and
will be a numerous number of international donors and NGOs’ projects and programs carried out
in Nam Dong. (the number).
Look at cases (??)
Thon Village –level (WB, 2004 ): there are poor villages and better-off villages in one
commune. There are poor households and better-off households in the same village.
Even, in one study Oliver et al found that “These are certainly not income poor villages,
per se, but there are poor people in these and every village”

Ciat: ). CARE has observed that though there has been an increase in food security, equated to rice
sufficiency, at the village level, the higher wealth groups benefited most. However, as mentioned
previously, the poorer families in villages are often poor for non-livelihood reasons (widowed,
handicapped) and there are usually village level means of assistance for these families.

1. Criteria for Being in the Government Poor Lists (GSO)

(http://siteresources.worldbank.org/INTVIETNAM/Resources/Central_Coast_Highla
nds.pdf)
1.1. Definition of Poverty
Poverty is a situation in which the basic human needs of a proportion of the population are
not satisfied, these needs being identified by the society depending on the level of
economic and social development, and local customs and practices (Source: Asian-Pacific
Conference on Poverty Reduction. Bangkok, Thailand: September 1993).
1.2. National, Provincial and Other Definitions of Poverty Applied in
Vietnam
At the national level, according to Decision 1413/2000/QD of MOLISA, the poverty level is
80,000 VND (approx. $US5.3) per month per capita for rural mountainous and island areas,
100,000 VND (approx. $US6.7) per month per capita for rural lowland areas, and 150,000
VND (approx. $US10) per month per capita for people living in urban areas.
The major alternative poverty measurement in Vietnam is the GSO/World Bank method, in
which the poverty line is calculated in two ways: a food poverty line and an overall poverty
line. For the food poverty line, the income needed is calculated by determining the amount
of consumer calories per capita per day for each expenditure quintile, equaling
approximately 2,100 calories per day. The overall poverty line is defined by adding the cost
of some non-food commodities to the poverty line. As such, the results of the Vietnam
Living Standard Survey 1997-1998 showed that 15 percent of the population was below the
food poverty line and 37.4 percent were below the overall poverty line.

2. Perception of Poverty through Local People’s Understanding

(RPGA) -> target : “poorest of the poor” (mention the saying of Haan
person – don;t afraid when gov spend a lot of money for the ethnic –
the results will not improve. On one side, he mean the lack of skills to
get better off. On the otherside, he mean the gov failure in helping the
poor)
- check with poor criterias in hong phu luan van qlbvr – thesis folder
The RPGA team found that the perception of poverty by local villagers has changed very
little over time. In many cases, the RPGA team realized that poor people have no idea
about recent social changes, they are ignored by the wider community, they have no
aspirations, and seem to have no sense of the past or the future.
Poverty from the local people’s perspective varies between different groups and areas.
Local people have a relatively accurate way of comparing standards of living in their village
households; they do not assess poverty following the national poverty standards. Poverty is
not merely interpreted as being poor in income or food, but has a more comprehensive
meaning. The better-off households have slightly different perceptions of poverty from the
poor ones. However, they shared a common view on the poverty situation.
The RPGA team noted that there was a disparity among different groups of people in terms
of their perceptions of poverty. Poor people’s perceptions of poverty are so different from
that of GoV. The poor, therefore, do not know whether they belong to the poor group under
the GoV’s classification, or not. This has made it difficult for them to claim their rights.

Poverty and poverty alleviation in Vietnam (cifor)

Vietnam has made a remarkable achievement in the process escaping out of poverty. In
1975, the GOV start to develop economy after long histories of war. In 1980s, Vietnam
was one of the world’s most poverty-stricken countries, experiencing negative per capita
economic growth and negative domestic savings, hyperinflation, widespread hunger, and
hundreds of thousands of its citizens leaving the country in unsafe boats (Dollar and
Litvack 1998:1 & 5).
After 1986, the country started it reform DOI MOI, setting its turnarounds from a central
planning economy to a market-oriented economy, accelerating the socio-economic
development of the people. Whereas in the mid 1970s, seven out of ten Vietnamese were
living in poverty, ten years later the rate of poverty had been reduced by half (World
Bank in Vietnam 2000:ii).

However the ongoing transition

long been, and continues to be, one of the poorest countries in Asia. In 1975, after
periods of war dating back to 1945, the Vietnamese government sought to propel the
country to a brighter future. Its initial efforts failed miserably. By the mid-1980s,
Vietnam was one of the world’s most poverty-stricken countries, experiencing negative
per capita economic growth and negative domestic savings, hyperinflation, widespread
hunger, and hundreds of thousands of its citizens leaving the country in unsafe boats
(Dollar and Litvack 1998:1 & 5). What happened to cause such devastation?
Agricultural production was exceedingly low in the early to mid 1980s, with only 300 kg
of rice produced per capita per year. This is judged to be the level of subsistence in
Vietnam, and a bad harvest reduced the average below 280 kg per person in 1987 (Dollar
and Litvack 1998:3-4). Why was agricultural output so low? It was largely the result of
forced collectivization after the end of the war, leading to a dramatic decline in
agricultural output and hyper-inflation (Irvin 1995:729).

Yet from the mid 1980s through the mid 1990s, Vietnam set a new course and achieved
“one of the most dramatic turnarounds in economic history” (Dollar and Litvack 1998:
1). Whereas in the mid 1970s, seven out of ten Vietnamese were living in poverty, ten
years later the rate of poverty had been reduced by half (World Bank in Vietnam 2000:ii).
In the early to mid 1990s, macro-economic stability was restored, there was rapid, export-
led growth, rates of GDP growth reached 9-10 percent, and the rate of inflation had been
reduced from 400 percent to single digits (Irvin 1995:726; Dollar and Litvack 1998:1 &
11).

How was this economic miracle achieved? Essentially, through conversion of a centrally
planned economy to a market economy. In late 1986 the government’s Sixth Party
Congress abandoned the socialist industrialization model and turned instead to
agricultural-led growth. In 1988, through its Doi Moi (renovation) policies, the
government abolished compulsory grain-purchase quotas and instituted free trade at
market prices, ended collectivized agriculture, and distributed farmland to individual
households (Irvin 1995:729-730; Dollar & Litvack 1998:5). The reforms also legalized
foreign direct investment and reduced or eliminated trade barriers (Glewwe et al.
2002:773). The reforms increased the relative prices of rice and other agricultural
products, provided strong incentives for rural producers with land and agricultural
knowledge, and by 1988 rice production per capita reached historical highs (almost 375
kg), 25 percent above the level of subsistence (Dollar and Litvack 1998:5-6, 11).

In the period 1993-1998, poverty in Vietnam decreased from 58 to 37 percent according

to a “total poverty line” and 25 to 15 percent according to a “food poverty line” (World
Bank in Vietnam 2000:iii).1 Household income grew by 60 percent in the period 1993-
1998 and these improvements are explained mainly by diversification of on-farm
activities (World Bank in Vietnam 2000:viii).

Although the poverty alleviation achievements of Vietnam are commendable, much

remains to be done. No matter which poverty line is applied, the fact remains that there
are many millions of poor people in the country – approximately 26 million according to
the “total poverty line,” and 11 million according to the “food poverty line.” And with a
per capita Gross National Income of only $410 per capita in 2001, Vietnam is still one of
the poorest countries in the world (World Bank 2003:235). The government’s target is to
reduce poverty by 40 percent in the period 2000 to 2010 (Beard and Agrawal 2001:iv).
Poverty is fundamentally a rural problem in Vietnam, with 90 percent of the poor living
in rural areas and with incidence of poverty being much higher in rural areas (45 percent)
1
The “total poverty line” is an absolute measure of poverty based on international practices and was
developed with assistance from the World Bank. It is the approach of Vietnam’s General Statistics Office
(GSO) and is based on the Vietnam Living Standards Survey (VLSS). The “food poverty line” is a relative
measure of poverty related to resources available for special assistance programs for the poor. It is a
national methodology used applied by the Ministry of Labour, Invalides and Social Affairs (MOLISA)
(World Bank 2001: 3 &n 25).
than in urban ones (10-15 percent) (World Bank in Vietnam 2000:vi). For this reason,
short to medium term poverty alleviation efforts will have to be heavily focused on
agriculture and the rural sector and will have to focus on off-farm enterprises and services
(World Bank in Vietnam 2000:viii; Glewwe et al. 2002:790). There is a basis for
optimism for continued progress on poverty reduction with per capita GDP growth being
4.7 percent in the period 2000-2001 (World Bank 2003:235). The future challenges in
achieving poverty alleviation will be greater than in the past, however, because of a lower
number of poor than in the 1990s clustered just below the poverty line, because of lower
rates of economic growth than in the late 1990s, because of the need to target assistance
to the poorest of the poor (Beard and Agrawal 2001:7), and because much of the
remaining poverty is located in inaccessible areas with unfavorable conditions for making
a living (SRV 2002:18). Much of the deepest remaining poverty is concentrated in the
Northern Uplands, the Central Highlands, and the North Central Coast (World Bank in
Vietnam 2000:vi; Minot and Baulch 2002:21-32).

Map of biodiversity hotspot and poverty: cases of less-favoured

areas: by men and nature