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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