FEATURE STORY

Inequality in Vietnam: A Special Focus of the Taking Stock Report July 2014 - Key Findings

July 8, 2014


•    Vietnam has achieved rapid growth with only modest increases in income inequality. In contrast, in many countries, notably China, growth has been accompanied by large increases in inequality.

•    The World Bank measures “shared prosperity” using the growth rate of the average income of the poorest 40 percent of the population. In Vietnam between 1993 and 2012 the average income of the bottom 40 grew at an annual rate of 9 percent. This is one the very highest rates of growth in the world of the incomes of the bottom 40 percent.

•    Concerns over inequality have arisen despite Vietnam’s record of inclusive growth. The concerns in part reflect the substantial differences in economic conditions by geography and ethnic group. They also reflect the gap between the very wealthy and most Vietnamese and the significant inequality of opportunity.

•    Popular concern with and demand for policy responses to inequality is likely to grow over time as more Vietnamese move to cities and area exposed to visible differences in welfare.

Inequality of Opportunities

•    Inequality of opportunity for children remains a concern in Vietnam. The children of poor Vietnamese and particularly ethnic minority children have less opportunity than the children of the rich.

•    Malnutrition rates among ethnic minority children are double those of the majority. Just 13 percent of Hmong and Dao children attend upper secondary school, versus 65 percent of Kinh and Hoa.  

•    The children of poor families are more likely to be malnourished and much less likely to attend secondary school.

High End Inequality

•    Much of the worry about rising inequality is focused on the gap between the very wealthy and most Vietnamese.  

•    Approximately one in every million Vietnamese is super-rich. Vietnam was estimated to have 110 super-rich in 2013 up from 34 super-rich in 2003.

•    The number of super-rich in Vietnam is similar to that of other countries at Vietnam’s level of income.

Perceptions of Inequality

•    The World Bank and the Institute of Labour Science and Social Affairs carried out a survey on perceptions of inequality in 2013.

•    A majority of those surveyed, and eight in ten urban residents said they worry about disparities in living standards in Vietnam.

•    Most respondents say that disparities between rich and poor are driven in part by talent and hard-work.

•    Concern about disparities between the rich and poor are greater when a person believes that the disparities are driven by illegitimate practices.

•    Respondents of the perceptions survey support government redistributive policies as a means of reducing inequalities in society.

•    The World Bank argues that a policy focus on further tackling barriers to equality of opportunity is a sensible response to rising concerns about equality.

This is the special focus of the latest Taking Stock Report. Click here to get key findings of the recent economic updates from the report.