Case Study # 2 Dynamic Poverty Analysis in Vietnam 1993–2002: Multidimensional Versus Money-Metric Analysis

Abstract

In 1986, 10 years after the country’s reunification, the Doi Moi (renovation) was initiated in Vietnam as a process of reform from a centrally planned system to a market-based economy.^{1, 2} “The underlying strategy of doi moi was to introduce market principles to enhance the efficiency of the economy, while at the same time preserving a central role for the state in economic management. Implementation gathered momentum in 1989 when price controls were largely phased out and agriculture reverted to family farming as opposed to farming based on collectives.”³ Measures under this reform program concerned all economic sectors during the period 1989–1996: these included reforms in agriculture, prices, exchange rate, interest rate, fiscal sector, foreign trade and investment, financial sector, state enterprises, and the private sector. “Under the reform program, Vietnam has achieved rapid growth. From a low of 4% in 1987, the annual rate of growth has increased to over 9% in both 1995 and 1996, averaging 7.3% annually for the past decade.