Viet Nam : will market transition increase poverty?

Results of Viet Nam's first large-scale household survey show the incidence of absolute poverty in to be widespread, concentrated in the countryside and quite variable between geographical regions; moreover, the average poverty incidence is considerably higher in Viet Nam than most of its Southeast Asian neighbours. Although some poverty targeting is needed, it is argued below that promoting pro-poor policies will depend principally on providing improved rural economic and financial infrastructure, maintaining favourable terms-of-trade for food agriculture and creating off-farm employment. Cautious optimism is justified in light of Viet Nam's current high growth, its relatively egalitarian distribution of land assets and the stress laid on agricultural reform throughout the doi moi period. At the same time, the data suggests that a fall in absolute poverty will be accompanied by a rapid rise in relative poverty; this problem can be alleviated only if more effective means are found of channelling resources towards the country's poorest regions and amending the financial and administrative basis of social provision.