This paper reviews how poverty is measured in Vietnam with a particular interest in how
accurately it measures urban poverty. Poverty has been seen as a rural phenomenon in
Vietnam and only recently, with rapid urbanisation, has attention been given to urban
poverty. Two different approaches are used by the government to measure poverty. The first
sets rural and urban income-based poverty lines that are then used by communes to
determine who is ‘poor’ and eligible for targeted poverty reduction programmes and social
welfare benefits. The second is based on expenditure needed for a daily food intake (2,100
kilocalories per person) with an additional allowance for non-food needs based on the
consumption patterns of the poor. Applying these poverty lines, or the international US$1.25
a day poverty line, show a rapid fall in the proportion of the population defined as poor from
the early 1990s to 2010. By 2010, the proportion of the urban population considered poor
was between 6 and 7 per cent, depending on which of the two approaches were used. There
had also been substantial progress in other dimensions of well-being including school
enrolment and improved health.
However, many households have incomes very near these poverty lines and remain
vulnerable to shocks and stresses. In addition, different poverty lines give different figures;
the per cent of the urban population in poverty varies from 0.3 to 8.3, depending on which
poverty line is used. There are also concerns that monetary poverty lines are set too low in
relation to the costs of living faced by low-income groups in urban areas, especially in the
large cities; and that urban poverty statistics are not including many urban residents who
have migrated to urban areas but are not registered as urban dwellers.
This paper reports on the findings of four studies that have sought to improve the basis for
defining and measuring urban poverty: an Urban Poverty Survey in 2009 that included
recent migrants in Hanoi and Ho Chi Minh City; a survey that monitored poverty in a range of
sites in Hanoi, Hai Phong and Ho Chi Minh City over five years and that included
participatory appraisals; an inequality perception study that included sites in large and small
cities as well as rural areas; and an analysis of living conditions among Hanoi’s poor
population.
The four studies show that poverty lines remain low in relation to living costs in urban areas -
even with the raising of official poverty lines in 2010. One respondent to a survey noted that
it takes the equivalent of at least US$50 per person to survive for a month in Hanoi – which
is twice the official urban poverty line.
There is also a concern that a focus on income or expenditure-based poverty lines misses
many poverty-related deprivations. Assessing poverty based on multidimensional
measurements highlights how the proportion of Vietnam’s urban population facing
deprivations are higher than those defined as poor by official poverty lines. The 2009 Urban
Poverty Survey of multi-dimensional poverty in Hanoi and Ho Chi Minh City showed how the
proportion of the population facing a range of deprivations associated with poverty was much
higher than the proportion that were poor according to the income-based poverty lines. This
survey explored 8 dimensions of deprivation including access to social security (receiving
any benefit from work, pension or regular social allowance), access to housing services
(including electricity, water, sewer connection and waste disposal services), housing quality
and space, access to schools, access to health care, physical safety and social inclusion, as
well as income.
Figure 3 in this paper highlights the high proportion facing deprivation in several of these –
and how much higher the proportions were when compared to income. The per cent of the
population of Hanoi and Ho Chi Minh City facing non-monetary deprivations is particularly
high in relation to social security, housing and, for Ho Chi Minh City residents, education. An
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assessment in 2008 found that the proportion of urban children suffering multidimensional
poverty was 2.5 times the proportion in monetary poverty. There is also a concern that the
conventional measures of poverty are not capturing increasing inequality in outcomes,
opportunities and voice.
The paper discusses a wide range of factors relevant for poverty for migrants and registered
residents including limited education and skills, unstable jobs, adverse working conditions,
lack of a labour contract, poor housing and living conditions and inadequate access to clean
water and toilets and to health care and education. Migrants suffer deprivations in more of
the dimensions assessed than registered urban residents. Households with only one main
worker are more likely to face chronic poverty. Many migrants rent accommodation and this
accounts for a significant proportion of their income. The urban poor struggle to meet the
costs of keeping children at school and of health care, especially for those not on the official
‘poor’ list that can get subsidised health care. The paper also reports on how food and nonfood
costs have risen faster than incomes, especially for migrants and on the impacts on
poverty of the global financial crisis and slower domestic economic growth.
Those who are defined as migrants are an integral part of urban development and an
important source of remittances for rural households. Yet they are disadvantaged in
development plans, service provision and poverty reduction policies. Pressure on
infrastructure and overloaded public services should not be seen as unwanted impacts of
migration but as challenges to be addressed.