During the mid-1980s, an estimated seven out of ten Vietnamese lived in poverty. Almost 20 years after the introduction of doi moi (innovation) reforms in 1986, the economy of Vietnam has seen fundamental changes in social and economic relationships that have led to unprecedented economic development and poverty reduction. During the period 1991―2000, the economy grew on average by about 7.5 percent per year. In the same period, the incidence of poverty declined dramatically. Using a poverty line computed according to international standards, 29 percent of the population lived in poverty in 2002, a sharp decline from 1998 (when that...

The two study villages, Nhat and Ngoc Dong, illustrate two different pathways to economic growth and poverty reduction. Both are fairly representative of patterns within rural areas of Ha Nam Province and of the Red River Delta, and share relatively similar conditions with regard to access to infrastructure, location, and the local policy environment. In both villages, local cooperatives have played an important role in the promotion of local economic development. This is reflected in the ‘specialisation’ of each village: Nhat in agriculture, and Ngoc Dong in handicrafts. We use this categorisation throughout the paper, although we should also stress...

Migration is a relatively new phenomenon in Vietnam. Until the implementation of reforms in the mid-1980s, population movement was only allowed as part of the government-controlled resettlement programmes. Hence, while it may appear to be much lower than in other nations, nevertheless, by Vietnamese standards, in terms of the number of households with at least one migrant member, it is significant in both villages. However, in Nhat, this proportion is three times as high as in Ngoc Dong (see Table 3). The main reason for this is in the different economic base of each village: in Ngoc Dong, nonfarm activities...

The two villages described in this paper show different routes to local economic development, poverty reduction, and livelihood transformation. In both cases, however, the role of rural-urban linkages cannot be underestimated. In Nhat, the “agricultural” village, local economic growth has been spurred by access to urban markets, where demand for food is growing hand in hand with urbanization along the Hanoi-Haiphong corridor. Diversification into higher value cash crops is to a large extent made possible by nonfarm income sources, including seasonal migration and the growing local demand for services. Nhat is thus an example of how income diversification can strengthen...