Drawing upon the Vietnam Household Living Standards Survey (VHLSS) data that coverthe whole of Vietnam in 2002 and 2004, ex ante measures of vulnerability are constructed.These are then compared with static indicators of poverty (i.e. the headcount ratio in aparticular year). Detailed analyses of the panel data show that (i) in general, vulnerability in 2002 translates into poverty in 2004; (ii) vulnerability of the poor tends to perpetuate their poverty; and (iii) sections of the non-poor slip into poverty. Durable reduction inpoverty is conditional on (i) identification of the vulnerable, (iii) their sources ofvulnerability, and (iii) design of social safety nets that would enable the vulnerable to reduce risks and cope better with rapid integration of markets with the larger global economy