Culture & Society Rich-Poor Gap Widening in Vietnam

Disparity between the poor and the rich in Vietnam is expanding, said a workshop entitled "Updates on Poverty Rates 2006", recently held by the Vietnamese Academy of Social Sciences and World Bank (WB).

The report said the ratio of per capita expenditures of the richest in Vietnam compared with the poorest rose to 6.3 in 2004, from 5.0 in 1993. The average purchasing rate of the richest increased to 44.7% from 41.8% of the total during the same period, while the rate in poorest group fell from 8.4% to 7.1%.

According to UNDP, income disparity between the rich and the poor, or Gino ratio, of Vietnam stays at 36.2, ranking the third after China (40.3) and Russia (45.6). Currently, as Vietnam sees economic growth; the poor only take 76.6% of the gains, while the rich enjoy 115%. Per capita income in rural areas was 2.15 times less than in urban areas, or $23.6 a month compared with $60. The disparity of the richest area in the South was 3.13 times higher than the poorest in the North, according to the General Statistic Department source. Also in the report, the national poverty rate in 2004 was 19.5% with more than 16 million people living below the level of $0.3 a day; 10-20 times lower than state employees. The International Monetary Fund (IMF) experts compare Vietnam's current situation with Thailand and the Philippines two decades ago.

These two countries invested about 30-40% of GDP to reach growth of 12% while Vietnam poured up to 60% GDP but annual growth speed remains at a modest 6-7%. State-owned enterprises are blamed for this issue and the widening gap between the poor and the rich, due to corruption under government subsidies. To narrow the gap, the workshop points out four solutions focusing on rapid change of investment direction in private-owned firms; managing adjustments in hunger elimination and poverty reduction programs; anti-corruption campaign; and job creation in rural areas. Truong Gia Binh, general director of FPT Corp, is named the richest man in Vietnam with VND2.4 trillion or $150 million, a recent Vnexpress survey showed.