Table of Contents

  • Over the past decade, the global economic centre of gravity has moved eastwards and southwards. Fast growth in developing countries has lifted hundreds of millions of people out of poverty and doubled OECD growth rates. At the global level, this overall decline in poverty has resulted in better distribution of wealth among countries. However, the picture within countries can be quite different. Rapid economic growth has left many societies in flux with a variety of impacts on human well-being and inequality. Certain population groups remain mired in persistent poverty, while the growing middle class and an increasingly educated youth have new expectations and rising aspirations.

  • Viet Nam has achieved sustained growth over the past decade accompanied by impressive progress in poverty reduction and the emergence of a large middle class. These achievements are largely attributed to the Doi Moi economic reform process, initiated in 1986, which launched a series of structural changes that transformed the country into one of the fastest growing economies in the world.

  • The sustained growth achieved by Viet Nam over the past decade was accompanied by impressive poverty reduction and the emergence of a large middle class. This progress is largely attributed to the Doi Moi (or renovation) process, initiated in 1986, which launched a series of economic reforms that transformed the country into one of the fastest growing economies in the world. The country achieved an average annual GDP growth rate of 7% over the past decade, doubling the median income of middle-class households. Poverty headcounts fell from 58% in 1993 to 14.5% in 2008. The Doi Moi aimed to transition from a centrally-planned economy to a socialist-oriented market economy, encouraging private sector development and foreign investments.

  • Viet Nam is a unitary state with a single Communist Party, which rules over all organs of government, politics and society. The territory is organised into 58 provinces and 5 major cities, which have provincial status. Each province is split into districts (698 at present), which are in turn divided into communes. The provinces are regrouped into non-administrative regions: Northwest and Northeast (also called Midlands and Northern Mountains); Red River Delta; North Central Coast and South Central Coast (also called Northern and Coastal Central Region); Central Highlands; Southeast and Mekong River Delta The population numbers 90 million and is composed of 54 officially recognised ethnic groups, of whom the Kinh form the majority. With the exception of the Hoa (Chinese), ethnic minority groups live mostly in the highlands (Northern Mountains and Central Highlands) away from the coastal areas and major cities. The current working-age group (15-64) makes up about 70% of the total population.

  • This chapter starts by examining the inclusiveness of recent economic growth, focusing on the distribution of income growth, income inequality and the employment intensity of growth. It then discusses the extent to which location, ethnicity, gender and age may shape the distribution of key social outcomes. The chapter offers an overview of intra-generational and inter-generational mobility in Viet Nam, highlighting three important dimensions of social mobility: income, labour and education. Finally, it investigates ways in which rapid growth has affected Vietnamese people’s relations with each other and the government, their involvement in social networks, and social norms and family values.

  • The aim of this chapter is to review the role of selected public policies in promoting employment across different groups in society. Specifically, the chapter starts by investigating the extent to which growth policies have been able to generate employment growth and contribute to employment transformation. It then examines whether and how other policies, namely education and skills policies and minimum wage policy, have impacted on the quantity or quality of employment, contributed to adjusting the workforce to a changing economy, and helped make work pay decent wages.

  • This chapter examines public spending on social protection policies in Viet Nam over the past decade. It analyses coverage of public social services with a view to identifying gaps and also discusses challenges to ensuring equitable delivery of social protection services in Viet Nam.

  • This chapter examines the role of fiscal policies in fostering social cohesion in Viet Nam. The first section discusses the importance of fiscal legitimacy for the social contract. The second section provides an analysis of the effect of personal income tax (PIT) and public transfers on income inequalities. The last section examines the links between fiscal decentralisation – transfers from central to local government – and regional disparities.