Vietnam remains a poor country, with most people earning about $1,500 a year, but it has made tremendous strides since opening its doors up to capitalism in the mid-1980s. Economic growth has averaged more than 7 percent annually over the past decade, and the rate of people living in poverty has dropped from 58 percent in 1993 to 11 percent in 2010. year.

However, the gap between rich and poor has grown since economic reforms were introduced. On one side you have rich entrepreneurs . On the other side are street people selling postcards and peasants eking out leave on small parcels of land. According to statistics from the United Nations, 29.9 percent of the gross national income is held by rich people, who account for just 10 percent of the population. The figure is comparable to that in China, a country facing its own problems with inequality, where about 33 percent of the country's wealth is held by the rich. [Source: Makoto Ota, Yomiuri Shimbun, February 1, 2008]

The Vietnamese government is committed to "market-oriented socialism with Vietnamese characteristics" but sensitive about the growing gap between rich and poor. By its own estimates, the most affluent 20 percent of the population is seven times better off than the poorest two percent. According to the CIA World Factbook Household income or consumption by percentage share: lowest 10 percent: 3.2 percent; highest 10 percent: 30.2 percent (2008).

Distribution of family income: Gini index: 37.6 (2008), country comparison to the world: 75; 36.1 (1998). Surveys conducted by the General Statistics Office in 1993 and 1998, using expenditure data, showed that during this period, the Gini coefficient increased slowly and modestly from 0.330 to 0.357. (In using the Gini coefficient, zero represents perfect equality and 1 perfect inequality.) But the new report says that Vietnam's Gini coefficient has risen from 0.350 in 1995 to 0.410 today, just above the level of China, which has a Gini coefficient of 0.404. In 2006, the income of 20 percent of Vietnamese richest households was 8.4 times higher than that of 20 percent of the poorest households, up from 8.3 times in 2004, according to the newspaper Vietnam News. [Source: CIA World Factbook, Xinhua, Inter Press Service]

In January 2007, Xinhua reported: "The spending of the richest households on housing, electricity and hygiene was 8.8 times higher than that of the poorest, the newspaper quoted results of a survey of Vietnam's households in 2006 by the country's General Statistics Office. The difference for spending on household appliances was 7.2 times, education 5.2, transport 12.1, and culture, sports and entertainment 69.8. The poorest had to spend over 50 percent of their income on food, while the richest roughly 44 percent. The statistics office's figures show that some 61 million people, or 72.9 percent of the Vietnamese population, lived in rural areas in 2006. Vietnam's per capita income rose to 835 dollars in 2007 from 423 dollars in 2001, and the percentage of households living in poverty declined to 14.7 percent in 2007 from 28.9 percent in 2002. [Source: Xinhua, January 10, 2007]

In 2002, Tran Dinh Thanh Lam of the Inter Press Service wrote: "Up until recently, economists saw no great difference in individual incomes in Vietnam — as could be expected in a socialist country. But now a report released by the National Center for Social Sciences and Humanities (NCSSH), in cooperation with the United Nations Development Program (UNDP), says there is a fast-growing gap between haves and have-nots in Vietnam. "This trend presents a potential future social challenge for policy makers in Vietnam," says Robert Glofcheski, a senior economist with UNDP Vietnam. New UNDP resident representative Gordon Ryan also says that the emerging challenge for Vietnam today is to maintain equality. "The rising gap between rich and poor should not be considered a necessary evil to help enhance economic growth because the ultimate goal of development is people's overall well-being, " he says.[Source: By Tran Dinh Thanh Lam, Inter Press Service, April 10, 2002 ++]

"Economists warned that Vietnam country appears to be reaching relatively high inequality rates much more quickly than China. This has taken place even as Vietnam was posting strong economic growth in the past decade. Indeed, from a country that found it hard to feed its growing population some 10 years ago, this Indochinese nation has developed into the world's second-largest rice exporter. Living standards have also improved tremendously. But economists remark that the growth could be better if the gains had been shared more evenly across different groups in the population and geographical regions of the country. According to these experts, while the growth has benefitted rich and poor alike, those who were well off to begin with ended up with more gains. In 1999 alone, the richest 20 percent of the population earned 7.3 times as much as the poorest 20 percent. ++

"Between 1995 and 1999, 31 of Vietnam's 62 provinces have also seen income inequality increase by 10 percent. In the meantime, there were only nine provinces with inequality narrowed slightly over this period. The wealth gap is more noticeable between urban and rural areas, as well as between major cities and remote towns. In truth, while the urban population has enjoyed consistent economic growth since 1998, farmers' incomes have been greatly affected by continuous natural calamities and price fluctuations. ++

"Each year, we must buy fertilizers and chemicals at higher prices and sell our rice cheaper and cheaper," grumbles Le Van Nam, a 48-year-old farmer in Dong Nai province. "People become richer in Ho Chi Minh City while us farmers become poorer and poorer." The gains enjoyed by the urban population, however, are not limited to such things as increased income per capita. Other development indicators such as school enrollment, life expectancy, the unemployment rate and access to basic social services show that in many urban areas, residents are doing better in other areas than their compatriots in the countryside. Economists further point out that places with better human development indicators can only benefit more from economic growth. In other words, things can only get better for the people in these areas. ++

"Says NCSSH deputy director Do Hoai Nam: "High human development tends to lessen inequality. The higher human development is, the less severe is inequality." Economists, though, say economic gains do not automatically translate into improved human development. In the Mekong Delta provinces, for instance, a majority of the population have seen an increase in their incomes in the past several years, while keeping the gap between rich and poor there at a minimum. But all of the residents in these places still suffer from inadequate provision of clean water and basic sanitation and remain highly vulnerable to natural disasters and market fluctuations. ++

"Still, they are better off than those living in less developed provinces such as highland provinces of Kon Tum in the center, and Lai Chau and Lao Cai in the north. Both economic development and human development are low in these areas and their rich and poor share the burden of dismal basic education and sanitation, primary health care and infrastructure, as well as obsolete means of production. Vietnamese policy-makers now think that by promoting both economic development and human development, they will gradually narrow the gap between rich and poor. But they also realize that the varying circumstances from province to province mean fashioning different policy approaches for each area. That is why in the major cities of Hanoi and Ho Chi Minh City, the focuses are on boosting production, protecting the environment and fighting "social evils". In contrast, in the remote regions - central and northern highlands, Mekong and Red River deltas - official efforts are geared more toward developing off-farm activities and convincing people to adopt hygienic practices." ++

Rich and Nouveau Riche in Vietnam

Vietnam doesn’t really have any old money. The richest and most successful businessmen in the past were mostly Chinese. They are other people with money and property—including large landowners and people connected to the royal family—were either forced to flee Vietnam or were stripped of their money and property. Vietnam's nouveau riche have made their money through tourism, real estate, trade, corruption, manufacturing and joint ventures with foreign companies.

One of the most successful businessmen in Vietnam in the 1990s was Nguyen Trung Truc. One of the ten children of a peasant, he formed a joint venture with a Hong King investment firm in 1990 which grew into a $20 million conglomerate by the late 1990s controlling distribution of John Deere farm equipment, Mercedes and Honda cars, and Johnson and Johnson baby products. Even though he has a collection of classic Citroen automobiles he often drives to work on a motorbike to avoid the heavy Saigon traffic.

Nouveau riche Vietnamese have become a growing force at Hanoi’s fancy restaurants. "There's a new wave, a new income bracket," one restauranteur told the New York Times. "And a sign of this wealth is to go out to restaurants." At Vine, the chef, Donald Berger, said the clientele is "only 30 percent Vietnamese, but they're the biggest spenders." A typical table might drop between $1,000 and $2,000, he said.

Lot of money has been made in real estate. Time interviewed one Vietnamese businessman who bought a parcel of land for $40,000 and sold it ten days later for $57,000. In the 1990s Vietnamese yuppies in Hanoi congregated at the Com Nieu restaurant where home-style peasant cuisine was served. They wore western style clothes, were among the first Vietnamese to have cell phones and drove around on $3,000 motorcycles.

One casino patron told the Yomiuri Shimbun, "I made a fortune thanks to my connections with the [Vietnamese] government. I bought some real estate after obtaining some useful information and sold it on. With the surging property market, I knew I'd make money." As there is no private land ownership in Vietnam, trade in land-use rights is roaring, creating a housing bubble in the country. The assessed value of the land per square meter in front of the Ben Thanh Market, in the center of Ho Chi Minh City, was 200,000 dollars, or 21.7 million yen, in 2006--more than the 19 million yen the same-sized piece of land would cost in Tokyo's ritzy Ginza 2-chome. But while some Vietnamese have benefitted from the emerging market economy, many have been left behind, and have even abandoned their hometowns altogether for Bavet. [Source: Makoto Ota, Yomiuri Shimbun, February 1, 2008]

The first Rolls Royce in Vietnam was purchased in 2007 by Hoang Khai, the chairman of Khaisilk. The price tag, including tax, was estimated at above US$600,000. The used, 2006-model Phantom, imported by Hoang Trong Ltd. is a four-door sedan equipped with a 453hp, 6.75-liter cylinder V12 engine and six gears. Quoted on Yahoo at $328,750, in Vietnam it attracted an additional 70 percent import tax, 50 percent luxury tax, and 10 percent value-added tax. Several buyers in Ho Chi Minh City were interested in the car but Khai offered the highest price which was, however, not disclosed. Hoang Trong Ltd. said a Vietnam businessman had placed an order for a Rolls-Royce Phantom manufactured this year. [Source: Hoang Uy, Tuoi Tre, September 18, 2007]

See Chinese in Vietnam

Rich Kids Drag-Racing in Fancy Cars in Saigon Draws Scorn

Reporting from Ho Chi Minh City, Ben Stocking wrote in the Mercury News, "Wealthy young rebels without a cause, they ran wild in the streets, racing $50,000 luxury cars down the boulevards of old Saigon. And then they got nabbed -- in Vietnam's first drag-racing bust. Seven joy riders, all in their teens and 20s, had roared through the hot tropical night in a Camry, a Lexus, a Mercedes and three BMWs. Soon they would appear on national television wearing pinstriped jailhouse jumpsuits, and their recklessness would unleash resentment across the country, where the average annual income is $420. The sensational case offered a vivid glimpse into the lives of Vietnam's nouveau riche, whose sometimes decadent habits are as unfamiliar to ordinary Vietnamese as the leather upholstery of the bright yellow Mercedes one of the young men was driving. [Source: Ben Stocking, Mercury News, September 29, 2003 ////]

"He is known as Do La -- Vietnamese for dollar -- because he is reputed to pay for everything with U.S. currency. And when he and his friends were pulled over for drag racing, 21-year-old Nguyen Quoc Cuong proved true to his nickname. He pulled a $10,000 wad from his pocket, police say, and offered four $100 bills to the cops, hoping the cash would wash his problems away. It didn't. Cuong and his pals were convicted of disturbing the public order Sept. 8, four months after their midnight thrill ride. He received a 3-year suspended sentence, and five other young men received 18-month suspended sentences. The seventh -- a high school student accused of organizing the race -- was sent to jail for three years. The Mercedes and BMWs, which belonged to the boys' dismayed parents, were confiscated. The Camry and the Lexus, which two of the boys "borrowed'' from their parents' car repair shops, were returned to their owners. ////

"Rich kids in Hanoi and Ho Chi Minh City -- still widely known by its old name of Saigon -- had been arrested for terrorizing the public on fancy motorbikes many times before. But this was the first time the police had broken up a car race. The hot-rodding episode underlined how out of sync Vietnam's crusty communist image has become with the freewheeling frontier capitalism that is taking root here. The seven boys are the children of successful private entrepreneurs, including a Central Highlands lumber tycoon and a Saigon textile magnate. "A $50,000 car is nothing for this family,'' said Truong Thi Cao Cac, 38, who lives next door to Mai Dang Khoa, a 25-year-old racer who worked in his parents' textile business. Cac watched Khoa's family transform their small household sewing operation into Thuan Phuong Co., one of the biggest garment companies in Saigon. Ordinary Vietnamese such as Le Binh Thuan were awed by newspaper accounts of the racers' wealth. "They spend as much as they want on whatever they want,'' said Thuan, who juggles several part-time jobs, takes home about $65 a month and gets around the city on a bicycle. According to Vietnamese press accounts, Cuong earned his nickname when he was just 11 years old by paying exclusively with U.S. dollars, which are circulated widely in Vietnam. ////

Cuong's mother, Nguyen Thi Nhu Loan, owns the Cuoc Cuong timber company, which is based in the Central Highlands. She recently bought Cuong a home in Saigon worth about $350,000, according to a story on VN Express, a Vietnamese Web newspaper. A few doors down is the furniture business Cuong's mother helped him set up. Stocked with puffy sofas and easy chairs, it is a couch potato's paradise. Media accounts portrayed two of the young men as loafers who spent their time spending their parents' money. The youngest, 18 years old, is still in high school. The mother of Trinh Sam Mau, the alleged race organizer, called her son's sentence "completely unfair.'' "He received three years in prison. Why did the other kids only get suspended sentences?'' said Ha Ngoc. Lt. Col. Truong Van Thuyet led the 16 officers who chased down the young men in front of a large crowd that had gathered to watch the race along Dien Bien Phu street, an eight-lane divided boulevard. Two cars eluded officers; four others were nabbed. ////

"It was Cuong who tried to give us $400,'' said Thuyet, whose $140 monthly salary is the highest in his department. "He had about $10,000 in cash in his pocket.'' Most of it was in $100 bills, and Cuong suggested the officers use the $400 to buy themselves some coffee, Thuyet said. "Tram, tram, tram, tram!'' Thuyet said, repeating the Vietnamese word for 100 with a look of disbelief on his face. The young men raced along a one-mile straightaway at speeds of up to 70 mph, whipped around a traffic circle and then headed back toward downtown. They were caught just as they crossed a bridge over the Saigon River. The roar of engines and blaring stereos awoke Nguyen Van Quang, who sleeps inside the tiny bar where he works. ////

"Everybody around here is very angry about the racing,'' Quang said. Earlier this year, he said, rich kids would show up every weekend to race their high-priced motorbikes along the same road. Young men did the driving, he said, and sometimes their elegant girlfriends would sit on the back, hugging them tightly as they tore up the road. Earlier this month, three youths died and two were badly injured racing their motorbikes in another part of the city. Capitalist role models Not so long ago, extravagant displays of wealth were frowned upon in Vietnam, where the Communist government used to demonize businessmen as exploiters of the working class. ////

But in recent years, as it has opened up the economy, the government has been portraying capitalism as a force for social improvement -- a way of generating jobs and income in a developing country yearning to raise its standard of living. The government holds up successful entrepreneurs as role models and honors them with Gold Star awards. At the same time, the rich have become less shy about displaying their money. It is perfectly common for the well-off to drop $500 during an evening of fun. Though Do La and his friends are refusing to discuss their lavish lifestyle or anything else about their case, their recklessness has enraged many of their less affluent fellow citizens, who seem embarrassed that such a thing could happen in Vietnam. Lai Hai Nhu, a 21-year-old university student, said the young men seemed to have squandered the opportunities their wealth had given them. One of the racers had lived her dream, going abroad to study for several months."Most of the young people in Vietnam are not like this,'' Nhu said. "Other students go study abroad, and then they come back and use their knowledge to help the country.'' ////

Hanoi Club Attracts Vietnam's Elite as Poor Look on

Ben Rowse of Agence France Presse wrote: "Loud, glitzy and ostentatious, Hanoi's hottest nightspot, the New Century Discotheque, is a magnet for Vietnam's small legion of pop stars, models, and scions of government officials. It is easy to see the attraction. The decor is as stylish as the hippest clubs in London or New York and artists from the southern boomtown of Ho Chi Minh City are regularly flown up to perform their latest hits. Scantily clad dancers gyrating on podiums above the dance floor provide an eye-pleasing touch, while private karaoke booths are on hand for those feeling the urge to burst into song. With the entrance fee set at a modest 40,000 dong (2.50 dollars), the club also attracts university students, expatriates and middle class Hanoians keen to rub shoulders with the capital's elite. [Source: Ben Rowse, Agence France Presse, August 20, 2002 ]

"However, in a communist state where GDP per capita hovers around a paltry 400 dollars a year, the contrasting lifestyles enjoyed by those inside the multi-levelled club and those on the outside are extreme. For the cost of a bottle of whisky -- ranging from a mere 65 dollars up to a staggering 180 dollars -- one of the multitude of cyclo or rickshaw drivers waiting outside could put their feet up for a couple of months, But in Vietnam's deeply traditional Confucian society, where maintaining face is all important, there are few better places in the capital to flaunt one's financial prowess than the New Century. Indeed, why have one bottle of a 150-dollar cognac for a table of six when you can have two or three at the same time? Such sights are as common as the prostitutes filling the bar stools casting for customers.

"On Friday and Saturday nights it is very busy and many of the people are extremely rich and literally scatter money, giving us tips for lighting their cigarettes or showing them to the toilet," said one waiter who asked to remain anonymous. "Some of them are children of Communist Party members and government officials, others are businessmen," he added. Beneath the club's flash veneer though lurks the slightly troubling question of how people in their 20s and early 30s can afford such extravagance in one of the world's poorest countries.

"Sometimes I ask myself how they can spend all that money in one night," said Sonny, the club's resident Filipino DJ. "But they don't just do it for one night, they do it often, several times a week." The heavy security presence, which, according to several waiters, includes undercover, gun-carrying guards hired from police ranks, appear keen to keep observers guessing. "Leave now," one told a reporter asking a table of young, affluent-looking cognac sippers about their lifestyle. "You are not allowed to talk to these people."

"However, ask a cyclo driver outside and you get a wry smile and a mumbled comment about rampant corruption in the party and the government. With cabinet ministers receiving an annual salary of around 1,350 dollars and the prime minister officially taking home a mere 1,640 dollars, it is easy to understand such cynicism. The Connections between the New Century and some senior-level government officials, although not necessarily illegal, allegedly run deep. The son of one top Communist Party leader is widely believed to be among the investors. However, all attempts to find out the names of the owners were met with a stony silence, while the club's manager, who gave his name as Minh, simply said the stakeholders were "Vietnamese people". Whoever they are, they have influence or at least high-ranking sponsors who have allowed the club to use the premises of the neighbouring National Library as a carpark for their Mercedes-driving patrons. The owners also appear eager to remain Hanoi's only nightspot catering to the cream of the urban elite.

From Homemade to Gucci: Vietnam’s Nouveaux Riches

Associated Press reported from Ho Chi Minh City: "In a country whose peasant army once marched on flip-flops cut from old tires, Gucci beach sandals priced at $365 can come as a shock. But the luxury market is booming in Vietnam, where Ho Chi Minh's communist revolution exalted equality and the common man just a generation ago. As the country begins to embrace private enterprise, its nouveaux riches are snapping up shoes at Gucci, handbags at Louis Vuitton and watches at Cartier, offering proof of how much the country has changed after decades of war. "I sold a $4,000 leather jacket recently," said Do Huong Ly, a stylish young saleswoman at the Roberto Cavalli shop in Hanoi. "Our customers want people to know that they are high-class." Not long ago, displays of wealth were frowned upon in Vietnam. Those tire-sandaled troops who bested the French colonial army and outlasted the Americans embodied frugality and egalitarianism. The revolutionary government snatched up the assets of the wealthy and redistributed them to the poor. [Source: The Associated Press - September 22, 2007 :/]

"Members of the new generation want to enjoy life and pamper themselves with luxurious things," said Nguyen Thi Cam Van, 39, who has purchased five $1,000 handbags at Louis Vuitton. "If I can afford to buy something nice, it makes me feel proud," said Van, who works at Siemens and also consults for a Vietnamese import company. "It lets you show people your taste and style." One of her friends has 50 Louis Vuitton bags, Van said. "I think five is enough." Some of Vietnam's shopaholics are young people who work for multinational corporations but still live rent-free with their parents. Others work for powerful state-owned companies and many have made fortunes in Vietnam's small but booming private sector. They indulge their urge to splurge at Dolce and Gabbana, Burberry, Escada, Rolex, Clarins, Shiseido and the like. In the two decades since Vietnam began implementing its economic reforms, the nation's poverty rate has been cut in half, and per capita income has doubled in the last five years. Still, most workers in this nation of 84 million people still earn just a dollar or two a day toiling in the farm fields. :/

"Those working low-wage jobs find the new lust for luxury hard to stomach. "The rich are getting richer, and the rest of us are struggling to make ends meet," said Dao Quang Hung, a Hanoi taxi driver. "The money they spend on a Louis Vuitton bag could buy several cows for a farmer's family and lift them out of poverty." At the new Gucci shop in Ho Chi Minh City, the flip-flops are among the economy items. The black-clad sales staff, looking fresh off a fashion show runway in Milan, offer a pair of golden, spike-heeled shoes for $765. Across the hall at the Milano store, the display last year featured a $54,000 Dolce and Gabbana dress, one of just three in the world, according to marketing director Dang Tu Anh, who represents both stores. The others, Anh said, were worn by film star Nicole Kidman and Victoria Beckham, the former Spice Girl. Milano's best customers, Anh said, think nothing of dropping $5,000 on a handbag and a pair of shoes. "If they can buy something luxurious, it proves they have money," Anh said. "And that's good." :/

Vietnam's older generation, shaped by the hardships of war, finds itself at odds with younger Vietnamese over the new consumerism. "Now the younger generation in Vietnam is racing for materialistic enjoyment," said Huu Ngoc, a 90-year-old scholar and author. "Individualism is destroying our cultural identity. We may become richer but lose our soul." The war generation wasted nothing and always saved for the future, convinced that catastrophe lurked around every corner. But opinion surveys show that the 60 percent of Vietnamese born after 1975 are very optimistic about the future — and determined to enjoy the here and now. Van, for example, enjoys pampering herself at the salon with massages and manicures. But she lives in fear that her father, a college professor, will learn about her five Louis Vuitton handbags. "I can't tell him I have these," she said. "And I would never tell him how much they cost. He would think that I was completely irresponsible." Van's indulgences are modest compared to those of Vietnam's super elite, who tool around in the ultimate status symbols: a shiny BMW or Mercedes-Benz. And pay cash. "In America, you pay in installments," said Nguyen Hoang Trieu, luxury car dealer in Ho Chi Minh City, the former Saigon. "Here, you pay all at once, in cash. Sometimes people come in here with $400,000 in a suitcase." :/

Middle Class in Vietnam

Reporting from Dalat, Stanley Karnow wrote in Smithsonian magazine, “Peasants labored in paddy fields, protected at intervals by gleaming white statues of Phat Ba Quan Am, a Buddhist goddess of compassion. I stopped at a flower farm, where the owner, in his mid-40s, identified himself as Le Mai Xuan. As we strolled around the meticulous, one-acre plot, he told me that he cultivates chrysanthemums that wholesale for 7 or 8 cents each. He moonlights as a policeman. His wife, Thuy, is a teacher; together they earn $14,000 annually—a staggering sum compared with the Vietnamese average of about $500. Despite their wealth, however, they and their three children share a minuscule house with outdoor plumbing. The family cooks on a primitive charcoal stove, but they have a radio, television set, videocassette recorder and refrigerator. Their teenage son Hung sat at a makeshift desk in a corner, learning English on a computer. Logging onto the Internet, he demonstrated a vocabulary lesson, repeating the words on the monitor: “Bob and Jane are staying with their Uncle George in Pittsburgh.” Beaming with pride, his father told me, “My dream is that he becomes an engineer, a doctor or a lawyer, and cares for me when I retire.” I wished the youngster good luck. [Source: Stanley Karnow, Smithsonian magazine, August 2005]

Grant McCool and Nguyen Nhat Lam of Reuters wrote: "The middle classes of the Socialist Republic of Vietnam, as it is formally named, have taken quite well to capitalism. Whether it is families dining at fancy restaurants, businessmen buying luxury cars or people shopping for vanity items, conspicuous consumption is "in" — especially in the commercial hub, Ho Chi Minh City, and the capital, Hanoi. "Vietnam is wealthier than what we believe, but we honestly don't know how wealthy," said Ralf Matthaes, managing director of TNS market research in Ho Chi Minh City. "Urban Vietnam has a middle class and, when a country has a middle class, it means it is able to sustain itself for the future," he added. TNS research showed that in an average household in the city most still call by its old name, Saigon, people spent 2.5 to seven times more than they said they earned.[Source: Grant McCool & Nguyen Nhat Lam, November 10, 2006 :::]

Measuring the new wealth of the middle classes is difficult because Vietnam is largely a cash economy and the personal income tax-collecting system is in its infancy. Those born in the baby boom years that followed the Vietnam War have turned 30, and a group known as the 8X-generation born in the 1980s strive to make their mark as professional choices increase. In the one-party state, the Communist Party leadership has made clear that as far as the economy goes, there is no turning back. :::

"The children of the middle class increasingly eat Western food, use mobile phones and the Internet and enrol at international schools that until a few years ago catered almost exclusively to expatriates. They are sometimes called "cadre kids" -- sons and daughters of couples connected to the elite ruling group or of businessmen whose entrepreneurial skills in the new economy have completely transformed the lifestyle of their extended families. "The rate of change in Vietnam is accelerating beyond even our optimistic assessments," gushed a Merrill Lynch report in October. "The rise in consumption is nothing short of shocking." TNS market researchers found that annual per capita gross domestic product in Ho Chi Minh City households was about $2,400, three times the official nationwide figure of $720 for this year. Vietnam's gross domestic product grew by an estimated 8.2 percent this year, second only to China. :::

"In contrast, more than 70 percent of the 83 million Vietnamese live in the countryside and work in agriculture, in some places still struggling to make one dollar a day. Even in Hanoi, hardy women in conical straw hats are still seen walking all over the city balancing two heavy baskets of cheap fruit and vegetables from a pole hoisted on a shoulder. "In the past, having a bicycle was a dream already, let alone a motorcycle ... now even farmers go to the field on motorbikes," said To Vinh from Thai Binh province in the northeast as he shopped for a Honda for his son, a first-year Hanoi university student. :::

"Car sales keep growing, although Vietnam is one of the most expensive places in the world to buy a vehicle with import tariffs of up to 90 percent. Honda, Mercedes, BMW, GM Daewoo and Toyota say sedan sales in the first 10 months of this year jumped 15 percent to 14,114 units. The tariffs will be lowered gradually to a maximum of 70 percent now that Vietnam is in the WTO. "You are first-class citizens if you go to work in a car," Do Thanh Trung, manager of a small import-export firm, said proudly after spending $29,000 on a second-hand Mercedes C200. Large supermarkets such as Metro of Germany and Big-C of France are filled at weekends with shoppers buying goods in bulk. Big C is in a new Hanoi suburb with rows of Singapore-style apartment towers, designer stores, trendy bars and restaurants.

"The middle-class suburb also houses the imposing National Convention Center that has been built over the last two years for the APEC gathering at a cost of at least $260 million. Most observers believe that with the new U.S.-Vietnam trade deal signed in May, it is only a matter of time before Vietnam's young middle class will be sipping coffee at Starbucks and eating at McDonald's like their counterparts in Bangkok and Hong Kong. :::

Middle Class Home in Vietnam

Describing the home of Pham Xuan An, a former North Vietnamese spy who now lives comfortably in Ho Chi Minh City, Thomas A. Bass wrote in The New Yorker, "An leads me through his garden, a tropical enclave lush with star fruit and bushberry trees. It is perfumed with frangipani and splashed with color from the flowering apricot blossoms and orchids. Staring at us from cages under the trees are a hawk and An’s three fighting cocks. An’s wife, Thu Nhan, works in front of the house, sweeping the porch with a short-handled broom. She is a pleasant, round-faced woman with her hair tucked into a bun. Ten years younger than An, she is busily cleaning before the rush of visitors who will be coming for Tet, including their daughter, who lives in California. Hanging on the porch and from poles set in the driveway are the cages where An keeps his laughing thrushes, golden-fronted leafbirds, magpies, canaries, and other songbirds. A blue Indian mynah with a yellow bill announces, in Vietnamese, "Grandfather, telephone call for you!" The bird is mimicking the voice of An’s grandson, who lives here along with An’s three grown sons. [Source: Thomas A. Bass, The New Yorker, May 23, 2005 ////]

"We kick off our shoes and enter the large room that used to serve as An’s office and library, as well as the reception and dining room. Lining the far wall are the glass-faced shelves that hold his books. A Chinese landscape painting hangs above a green upholstered sofa and chairs. Below the open windows sits a fish tank that holds the third component in An’s menagerie. Dogs are loyal, he says. Birds are always hopping around in their cages, keeping busy. "Fish teach you to keep your mouth shut." ////

The room has been changed since I last visited. In the alcove near the front door, in place of An’s desk and filing cabinets and the piles of magazines and papers, which used to reach toward the ceiling, sits his son’s piano. Later, I discover what happened to An’s office when he and I walk past the family altar and out through the kitchen into the driveway at the back of the house. "Here’s where my wife threw all my papers," he says, pointing to two gray filing cabinets and a desk piled with yellowing documents. All that protects them from the elements is a narrow plastic roof. As we stare at the papers heaped in the driveway." ////

Vietnam's New Middle Class Hungry for Consumer Goods

AFP reported from Hanoi: "Over a generation, urban Vietnam has emerged from post-war austerity into a fast growing consumer society, a trend set to speed up as WTO membership attracts more foreign companies, analysts say. The government may still be communist but a growing middle class is hungry for everything from Western fashion to beauty products and plasma TVs, say market watchers now rating the emerging economy as a goldmine. [Source: Agence France Presse, January 11, 2007 ***]

"Two thirds of Vietnamese were born after the war with the United States and they want to join the materialist mainstream of their dynamic Asian neighbourhood rather than think about the troubled history their parents lived through. "I'll never forget how we had to queue for any necessity during the (post-war) subsidised period," said retired teacher Tran Thi Hoa, 56, pushing her shopping trolley through Hanoi's new Citimart. "Vegetables, meat, household utensils, everything. Most of them were scarce and of very poor quality. I couldn't imagine what life would be like if Vietnam returned to the situation of 20 years ago." She probably won't have to. ***

"Today Vietnamese incomes are at a level where over 50 percent of the urban population is considered to be middle class, the main target of most of these companies," said Ralf Matthaes, head of market research group TNS Vietnam. Consumer confidence is sky-high, according to a recent Gallup survey of 56 countries that found Vietnam to be the world's most hopeful country, with 94 percent of respondents optimistic about their country's future. "A number of things are very striking, including the rate of change, the rate of acceptance and of an understanding of new goods and services," said Chris Morley, managing director of market research company ACNielsen Vietnam. "The rate of change means that in some product categories, whole normal evolution cycles are skipped. In 1995, there was virtually nil mobile phone ownership and today in Ho Chi Minh and Hanoi most families have at least one." Morley said many parents who grew up with food stamps are eager to give their children what they didn't have. "Mothers today may have been malnourished as children," he said. "Families who can afford it, make almost an overadjustment and think a chubby baby is a healthy baby." ***

Matthaes of TNS said Vietnamese are also "more and more likely to buy premium indulgent products" such as aroma-therapy shampoos and personal care products that promise to energize, detox or whiten skin. "Products with an emotional component are crucial to satisfy the rising need for pampering oneself," he said, pointing out that the number of skincare products on sale has almost doubled in three years to 940 in 2006. An ever-faster lifestyle is also reflected in the rise of new consumer goods, with instant coffee and tea bags growing by over 30 percent last year and slowly replacing the traditional drip coffee and slowly brewed tea. But big-ticket sales are also growing in a country where household incomes may be larger than previously thought because many people are thought to under-report what they earn to both the tax man and their own families. In the cities, Matthaes said, eight out of 10 households now have DVD players and other expensive purchases set for mass growth include plasma and flat screen TVs and modern banking services. In a country where uniformity and drabness in fashion and on shop shelves ruled until recently, goods that reflect wealth and status are becoming ever more popular. "People are buying premium brands," Morley said. "It may be a mobile phone or a premium beer, or a credit card that suggests the owner travels internationally. Vietnamese consumers are now punching above their weight." ***

Poor People and Poverty in Vietnam

Population below poverty line: 11.3 percent (2012 est., CIA World Factbook). According to the World Bank the number of poor households decreased from 58 percent in 1993 to below 20 percent in 2004. In that time more than 25 million people escaped poverty.

In the early 1990s, 45 percent of the children in Vietnam were regarded as malnourished and 51 percent of the population ate less than the World Bank's 2,100 calorie a day subsistence level. according to the World Bank. People sifted through the waste products of rice mills to extract bran for animal feed and husks for cooking fires. Buying a can of Coke was a major luxury and expense. Over half the country lived in absolute poverty, compared to 9 percent in China and 15 percent in the Philippines and four million children under the age of five suffer from malnourishment. The legendary North Vietnamese general Gen. Vo Nguyen Giap said: "Before, we launched a war against foreign aggressors. Now we must launch a war against poverty."

The broad based growth in Vietnam in the 1990s and 2000s contributed to rapid poverty reduction across all regions of the country. In 2004, though one in five households lived in poverty, per capita expenditures were steadily rising for all including the ethnic minorities. This has contributed to the economic well being of the population and is reflected in the high Human Development Index and the Gender Development Index relative to other countries at similar levels of development.

Bojana Stoparic wrote in Women's e-news, "On the surface, these policies look successful. Poverty levels in Vietnam have dropped from around 70 percent of the population to less than 20 percent in the past 15 years, according to the World Bank. The country's economy grew by 8 percent in 2006, and average per capita income has increased to $723 in 2006 from $485 in 2003. But a government survey found that the wealthiest individuals earned 12.5 times more than the poorest, who mostly live in rural, remote areas and depend on agricultural production. A disproportionate number of the poor also belong to ethnic minorities. Vietnam introduced fees for both health care and education in the late 1980s, said Faulkner, adding that these policies have particularly penalized women in rural areas. "Families that don't have the money to pay for school fees and supplies are more likely to take girls out of school than boys," she said. Health care costs have rocketed beyond the reach of most poor families and women tend to sacrifice their own health needs to allow their children and husbands to receive services, she added. Vietnam's government remains intolerant of criticism, Human Rights Watch's 2007 World Report finds. In the past year it has persecuted dissidents, restricted public gatherings, controlled access to the Internet and prohibited all free press and independent labor unions. "Vietnam wants to open up economically, but the ruling Communist Party also wants to keep political control," said Faulkner. [Source: Bojana Stoparic, Women's e-news, February 15, 2007]

Slums in Saigon

The poorest neighborhood in Ho Chi Minh City in the 1990s— District 4— was known as the district of the "five no's"—"no sewers, no water, no electricity, no jobs, no hope." Many of those that live there in some way supported the American side in the war. At that time people slept on the zoo grounds.

Reporting from Ho Chi Minh City, William Horsley of BBC News wrote: "The slums are an ugly reminder of the legacy of the war. Efforts to clear them began 15 years ago, but up to quarter of a million people still live in them. The slums grew up during the war, when refugees from the countryside streamed into Vietnam's biggest city to escape the bombs and the fighting. Many settled on the damp ground along the city's network of four large canals. These are natural branches of the Saigon river, whose waters rise and fall with the rains. They snake through the city towards the west and north. The Thi Nghe canal runs just a few blocks from the modern heart of the city. On one bank is a slum, where people live below the official poverty line of US$1 a day. Here drugs, crime and prostitution flourish. Some men, with families to feed, scrape a living as pedicab drivers.[Source: William Horsley, BBC News, October 24, 2004 -]

But there is frenzied activity in its alleys. Women are busy cutting bamboo sticks for sale, minding small stalls of fruit, and gutting fish from plastic buckets on the ground. Men hurry along carrying scrap metal to sell, or to repair the flimsy shacks they live in. The canal stinks, with a sickly smell of human waste and rotting vegetation. Inside the huts old men and women sit or lie still on narrow bunks. The canal water often breaks its banks and floods this area, especially during the summer rainy season, leaving a layer of mud that breeds disease. -

"Clearing Saigon's slums is a huge project, and the city is setting an example for the country as a whole. The World Bank has praised Vietnam for its success in reducing poverty, and as Vietnam opens up, more international aid is arriving to help. The government has re-housed over 35,000 people in the past 10 years. But Luong Van Ly, of Saigon's Planning and Investment Department, says 50,000 households have still to be re-housed, most in new high-rise tenements in the suburbs. It will take many years. The biggest problem, Mr Ly says, is finding the money to compensate the slum-swellers for the land. Saigon's economic boom has raised land prices to record highs. -

"The government is naturally sensitive about the slums. Officials did not allow the BBC to interview slum-dwellers or their helpers in the worst slum areas, like the one around the Thi Nghe canal. Instead, they prefer to show off areas where the slums have been cleared. One is the Nhieu Loc canal district, on the road used by visitors arriving in Saigon from Tan Son Nhat airport. US President Bill Clinton came here on a visit four years ago, to see the progress being made. It is now part of an Urban Upgrade Project, which aims to bring clean water and sanitation to 1.5 million residents of Saigon who lack them. Today the canal banks are lined with trees. The houses on both banks are newly-built. But the water is still badly polluted. -

"Le Hung Vong, a journalist from the English-language newspaper Vietnam News, explained that the new housing was now linked to a modern sewage system. But wide areas of slum dwellings are not. In those parts, sewage is still dumped straight into the water, so it stills flows through parts of the city. "Before 1950", said Mr Vong, "people here on the Nhieu Loc canal say they used to bathe in the water. It was clean." And how long will it take before they will be able to swim in the water safely again ? "Maybe in 2020", Mr Vong says. "Then they will be able to enjoy the water. No more bad smell!" -

Street Kids in Vietnam

Street children in Vietnam are known as “bui doi” , or the dust of life. In the 1990s there were an estimated 20,000 street kinds in Ho Chi Minh City alone. Many children in Saigon sell cigarettes, postcards and souvenirs to tourists. The youngest are five or six. They bargain with tourists and following them around. When they take a large dong note from a tourist to get change they leave their things behind on the tourist's table so the tourist doesn’t worry about the kid running off with his money. Some of the kids listen to tourists a bit to understand where you are from then speak your language.

There are a lot of street kids and shoeshine boys in Ho Chi Minh City, but no so many in Hanoi. Most street kids have either been abandoned or have been sent by their families to the cities to earn money. Some live in 10 to 12 to room in small flats, spend 30 cents a day on food and save the rest of what they earn for their families.

Tracy Dahlby wrote in National Geographic that he talked to one child who had lived on the streets of Ho Chi Minh City for four years. He didn't know who his parents were. For a while he lived with a foster family that "beat me everyday so I left. I went to work in an auto garage, but they beat me too. So I became a street boy...I'd just like to have an occupation where I can support myself...And, well, maybe a motorbike...a Honda."

In the late 1990s the Vietnamese government estimated there were has around 16,000 children under 16 living on the streets. Reuters reported: "Children selling newspapers, postcards or chewing gum, shining shoes, and begging are common sights in Hanoi and Ho Chi Minh City. Young female teenagers hired in from the countryside are commonly found working as domestic servants in wealthy households in return for food and little or no pay. The United Nations Children's Fund (UNICEF) warned that increasing numbers of street children are one of the most visible indicators of the increasing gap between rich and poor in Vietnam. "In light of the regional crisis, the impact of the economic slowdown on marginalised groups such as these will be felt even more strongly,'' the statement said. ''UNICEF is deeply concerned that the growing number of street children is not just confined to the major cities of Vietnam, but that the numbers of children living on the street are now growing in rural areas as well,'' it added. [Source: Reuters, October 8, 1998 |+|]

Rising Divorce Rate Sees More Street Kids in Ho Chi Minh City

In 2002, Xinhua reported: "With Ho Chi Minh City's divorce rate increasing in recent years, more kids make a home on streets of the Vietnamese city. Ho Chi Minh City had more than 11,700 divorce cases in 2000, up about 12 percent since 1990, according to a report of the local daily Vietnam News. [Source: Xinhuanet, June 11, 2002 \^/]

"Explaining the trend of divorce among young couples, Nguyen Minh Hoa of the Ho Chi Minh City Teacher College, who studied 5, 000 divorce cases, offered that young couples have to face big challenges during the first five years of marriage. The hectic lifestyles they undertake produce many problems. Working and studying to fulfill their ambitions leave almost no time for them to take care of each other and their children, she added. Instead, couples become angry and withdrawn due to fatigue and stress. \^/

"As a result, many more couples have separated after having children. However, children are dealt the hardest blow in divorce cases. More than 29 percent of juvenile delinquents come from broken home. According to the city's Committee for Population, Family and Children (CPFC), the city's number of juvenile delinquents was 6, 300 in 2000, a sharp rise from only 1,311 in 1991. To encourage people to pay more attention to children, the Vietnam Committee for Child Care and Protection is organizing programs to prepare for National Family Day on June 28 which will be celebrated every year. \^/

Helping Street Kids in Vietnam

To help the street kids in Ho Chi Minh City one Australian-Vietnamese opened up a café called Koto that employs only street children. Many of the customers are tourists. Private facilities such as the Thao Dan Shelter in Ho Chi Minh City provide a place for street kids to sleep and gives them meals. Most of the children at the shelter are orphans or runaways. They survive by selling newspapers and lottery tickets, shining shoes and begging. Some resort to theft, and even drugs and prostitution to make money. A few have even ended up as heroin addicts before they became teenagers.

In 1998 Reuters reported: "Vietnam Premier Phan Van Khai has called for swift action from local authorities to tackle the growing numbers of street children in the country, local media reported. Khai, speaking at a two-day conference on street children said officials from rural areas should go to Hanoi and Ho Chi Minh City to collect children who have migrated from their areas. Khai added that households and communities should be educated to stop the drift of children from the countryside to major cities, the official English language daily Vietnam News reported. The paper said Khai wanted immediate action to stop children begging, living on rubbish dumps and annoying visitors at tourist sites.[Source: Reuters, October 8, 1998 |+|]

Khai said sexual abuse of children, child labor and the sight of children breaking the law was painful for all society. He proposed new measures that included stopping adults from carrying babies while begging, preventing children from working in mines or other hazardous jobs and strengthening implementation of Vietnam's code that outlaws child labor. Vietnam News said the conference was told that the government had approved a 9.2 billion dong ($661,680) project to help tackle the problem of homeless children. |+|

Sweep of Street Children Before APEC Summit Hanoi

In 2006, AFP reported: "A US human rights group slammed Vietnam for roundups and violent abuses of street children ahead of key international events including this week's Asia-Pacific Economic Cooperation summit. Human Rights Watch said a 2003-2006 study had found that homeless children detained in a notorious center outside Hanoi had been "subject to routine beatings, verbal abuse and mistreatment by staff or other detainees." The New York-based group said it had learned the arrests of street children "were intensifying in the lead-up" to the November 18-19 APEC summit here, to be attended by US President George W. Bush. [Source: Frank Zeller, Agence France Presse, November 12, 2006 ^^]

"Communist Vietnam has stepped up its campaign against "social evils" ahead of the gathering, its largest ever international conference, that will bring to Hanoi the leaders of 21 economies also including China, Russia and Japan. Vietnam has seen annual economic growth of 7-8 percent in recent years but the scrapping of state subsidies and farm cooperatives has widened the wealth gap and sent poor rural families and lone children to cities looking for work. Vietnam's Ministry of Labor, Invalids and Social Affairs estimates there are 23,000 street children in the country and 1,500 in the capital Hanoi. ^^

"Human Rights Watch said Vietnam had launched similar crackdowns in the past on children who shine shoes, beg, pickpocket or sell postcards and chewing gum around Hanoi tourists sites, temples, markets and bus and train stations. The roundup campaigns aim "to remove street children, beggars and vagrants from the street and out of view of international visitors," said the group. Similar crackdowns on homeless adults and children -- often called "bui doi" or "children of the dust" here -- took place before the 2003 South East Asian Games and the following year's Asia-Europe Summit Meeting. ^^

"The group said it had been unable to visit detention centers commonly off limits to UN groups and journalists but that interviews with former inmates had painted a harsh picture that breached global child protection standards. The report highlighted the Dong Dau social protection center, 30 kilometers (20 miles) northeast of Hanoi, which also serves as a holding center for sex workers, drug addicts and disabled and elderly people without family support. ^^

"Inmates under 18 "are locked up for 23 hours a day in filthy, overcrowded cells, sometimes together with adults, with only a bucket for excrement," said the report, which the group said was corroborated by non-governmental groups. The children had reported that lights remained on night and day, and that they were released for only two half-hour periods a day to wash and eat. There was no access to medical treatment or rehabilitation or educational activities. "Children reported that Dong Dau staff members slap, punch and beat children with rubber truncheons for violations of rules, which sometimes have not been clarified with the children," said the 88-page report. Human Rights Watch said none of the children they spoke to were told why they were rounded up or what rights they had in detention, and that no efforts were made to reunite them with their families afterwards. "Instead, the children we talked with said they were deposited at the gates of the centers... and expected to find their way. Most did not go back to their homes in the countryside but returned to Hanoi with no new alternatives." ^^

Poverty Lingers in Village Left Behind by Vietnam Boom

In 2007, AFP reported from Na Lia, a poor village in northwest Vietnam, "Vietnam's cities are being transformed by rapid economic growth which has brought fashion boutiques, fast food and traffic jams, but most people in this remote northern village wouldn't know. A rice farming hamlet of about 400 Tay ethnic minority people without telephones, television or even electricity, Na Lia is part of another Vietnam, the rural hinterland that is struggling to catch up with the boom. [Source: Agence France Presse, November 8, 2007 ]

"Few people in Na Lia — an hour's drive from the nearest highway in a valley in Lan Son province — have seen Hanoi, where people bring laptops to wi-fi cafes and play the stock market. One of the few villagers who has made the trip is Vi Van Phong, 31, who travelled to the capital for the first time this year, to visit the museum of Vietnam's first president Ho Chi Minh. Back in the one-room house he shares with his mother, he says what most impressed him about Hanoi was electricity, but otherwise he didn't really like the big city. Hanoi's once-sleepy streets are now choked with scooters and, increasingly, the luxury cars of the new rich, including several Humvees. Phong, who like some 80 percent of the people of Na Lia does not own a moped, made the six-hour trip by motorcycle-taxi and bus for 12 dollars return, a small fortune for him.

Communist Vietnam is now on track to raise average per capita GDP to 1,000 dollars a year by 2010, moving the country of 84 million to middle-income status. Phong says he survives on less than 100 dollars a year. For the most part, Na Lia is a small, cashless economy, where people live off what they can grow but lack surplus produce or the means to transport any excess to the nearest market town. Rice grows in small paddies but the hills are denuded from erosion caused by slash-and-burn farming and felling of trees by villagers to sell for timber. Like other villagers here, Phong says he runs out of rice for several months each year so must switch to corn and cassava. He eats meat or fish once or twice a month -- a far cry from Hanoi, where sushi bars have mushroomed, fast-food chain KFC opened its first outlets this year, and health authorities warn of rising obesity rates.

"There's a vast disparity between Vietnam's rural and urban areas," said Hassan Ahmad, whose Singapore-based group Lien Aid has launched an anti-poverty project here, funded by the city-state's Ian Ferguson Foundation. "You see Hanoi and Ho Chi Minh City -- bright lights, big cities -- but people here haven't tasted the economic growth yet," he told AFP. "I wouldn't say it's the dark side of Vietnam, but here people say they suffer food shortages for three months a year." Vietnam's government and its foreign donors are aware of the growing urban-rural divide, a problem common to much of Asia. Asian Development Bank president Haruhiko Kuroda, at a Hanoi conference this year, warned that in Asia, "although absolute poverty is being significantly reduced, the gap between the poor and the rich is rising". While the World Bank has praised Vietnam for poverty reduction it has also stressed that "the poverty rate among ethnic minorities and communities in mountainous areas is much higher compared to the national average," standing at 60 percent in 2004 for these groups. Making a difference isn't always easy, but neither is it impossible, said Ahmad, speaking at the opening of a new primary school and library here, built as part of his group's first rural development project in Vietnam.

Not so long ago just getting water was a daily struggle in Na Lia, where people had to fill water buckets from nearby creeks. Lien Aid has installed sand-filtered water tanks in all 71 households, fed via pipes from the nearby stream, where an eco-turbine generates power to light the new school, which replaces a dark timber shack. Vietnamese agriculture experts have introduced soy beans and a high-yield rice, doubling output. They plan to soon buy a single bull to genetically improve the local livestock. High-protein grass has been planted for the cows to feed on in enclosures — increasing cattle yield, converting manure into organic fertiliser, and preventing the animals from destroying other plants. At a nursery, seedlings have been planted for fast-growing acacia trees that will stabilise the hillsides and can later be sold as timber, said one of the group's agriculture experts, Cao Viet Hung. The group plans to expand into orange, longan and lychee trees, to green the hills, improve the villagers' diets and earn cash. "What we have done here is not genius, and it's not expensive," said Ahmad, whose project cost 150,000 dollars and half a year to set up, using know-how from Singapore's Nanyang Technological University. "People from other villages have come to take a look," he said. "We believe this project can be replicated. The real needs in Vietnam are in places like this, beyond the mountains and at the ends of inaccessible roads."

World Bank Praises Poverty Reduction in Vietnam

AFP reported in 2007: "The World Bank and United Nations have often lauded Vietnam as a model partner which has lifted 30 million people out of abject poverty since the launch of doi moi (renewal) market reforms some 20 years ago. Thanks to a decade of annual economic growth above seven percent, the ratio of the desperately poor has fallen below 20 percent, from nearly 60 percent in 1993, while national per capita GDP has risen to more than 700 dollars. [Source: Agence France Presse, November 8, 2007 ]

In 2006, Reuters reported: "World Bank senior poverty economist Carrie Turk said the rate at which poverty was being reduced in Vietnam was "almost globally unprecedented" and the benefits widely shared. She said poverty in Vietnam was reduced from an estimated 70 percent of the population to 20 percent over two decades of shedding centrally planned economic policies. "Inequality remains relatively low compared with its neighbor China for example," Turk said in her Hanoi office. "There are some people in urban areas who have become very rich but there are not enough of them to affect inequality measures." [Source: By Grant McCool , Ho Binh Minh, Nguyen Van Vinh, Reuters, May 10, 2006 ]

For Vietnamese sociologist Le Bach Duong, the achievement of alleviating hunger for a large number of people needs to be sustained with state and private sector involvement. Among the most needy and vulnerable to poverty are millions of migrant workers, poor farmers and people with disabilities. "You should create a kind of policy that builds your capacity, that can serve as a springboard but really help you to escape poverty and manage risks in your life," said Duong, director of the Institute for Social Development Studies.

On the migration of the poor to the cities, The BBC reported: "For poorer people, the recent economic changes mean rapid urbanisation and large-scale migration from the countryside to the cities. Pham Thi Diep recently left her home province of Ha Nam to sell bread on the streets of the capital. She says she misses her children back home, but added: "At least now I can send them to school." While most poor people will benefit from the new economic climate, some will benefit far more than others, according to Le Dang Doanh, a senior Vietnamese economist. As agricultural land is taken over for industrial use, people living in these areas will become more vulnerable - especially those who are old, uneducated or infirm. And according to World Bank estimates, poverty levels in certain pockets of Vietnam - specifically in ethnic minority highland areas - are falling far more slowly than in the rest of the country. [Source: Kate McGeown, BBC, November 27, 2006]

Vietnam, a Model for the Developing World

Brian Gomez wrote in The National: "Although North and South Vietnam were unified under the communist regime in 1976, the country’s rapid social and economic transformation began a decade later when the government introduced its Doi Moi programme or change to new or reforms. The 1986 reforms came at a time when, faced with severe famine and a failing Soviet-style command economy, the government began to experiment with market mechanisms and carried out an "egalitarian" distribution of communal land to farmers. Following the restoration of normal relations with the United States in December 2001, Vietnam’s exports to the US doubled in 2002 and 2003 and the country joined the World Trade Organization (WTO) in January this year. Economic growth averaged 9 percent a year in the five years to 1997, the year of the Asian economic crisis. The growth rate slowed to 6.8 percent annually in the subsequent eight-year period to 2004 and has since returned to around 8 percent.[Source: Brian Gomez, The National, March 24, 2007 =]

"Vietnam is one of the best performing developing economies in the world," the World Bank affiliate, the International Development Association, says. "When the World Bank re-engaged with Vietnam in 1993," it says, "income per capita was US$170. Today it is US$620 and by 2010, it could reach US$1,000." Average income levels in Vietnam in 1993 were less than 20 percent of the level in Papua New Guinea at the time, but PNG’s poor performance since then has meant that Vietnam has moved ahead with the margin likely to widen during the rest of this decade. =

"The numbers of people living in abject poverty has dropped from 70 percent to less than 20 percent and there is now a smaller proportion of people having to survive on less than US$1 a day than in China, India or the Philippines. Klaus Rohland, who is due to leave his World Bank post in Hanoi this month to take up his new position as ‘country director’ for the Russian Federation, says in an online video interview that 35-year-old Vietnamese employees in his office all faced the reality of hunger in the 1980s. "Their children now don’t know hunger. They are well fed. They have access to health care. They are well educated and there’s a general sense of optimism because of that," he said. =

"In its country strategy and programme for Vietnam, the Asian Development Bank said that the Vietnamese government was aiming to reduce poverty levels by half to around 10 percent by 2010. At the time, it intends exiting from its "low income" country status by attaining a per capita income of US$1,050 to US$1,100. Part of the reason for strong economic growth since the mid-1980s is a strong inflow of foreign direct investment from American and other multinational companies. =

The IDA says that "electricity, once a luxury, is now commonplace". Clean water is more accessible. The country is expected to achieve by 2015 most of the ambitious Millennium Development Goals set by the United Nations. The share of agriculture in gross domestic product has fallen from 25 percent to 20 percent between 2000 and 2006, by which time industry was contributing 48.1 percent and services 38.1 percent.

"Under the communist style regimes that are becoming a dim memory, the government’s role was critical and domineering. Now the Vietnamese government intends keeping a steady hand on government spending, aiming to keep its national budget at around 22 percent of GDP, according to the ADB. And it will be the private sector and foreign investors that provide the forward momentum for the economy. =

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Vietnamtourism. com, Vietnam National Administration of Tourism, CIA World Factbook, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, Fox News and various websites, books and other publications identified in the text.

Last updated May 2014

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