My class presentation on Public Economics.

1. INCOME INEQUALITY IN VIETNAM 2000 - 2010
Dao Thi Mai Quyen – Nguyen Thi Hanh Minh

2. Content Outline
Part 1 – Literature Review
Part 2 - Situation of Income Inequality in Vietnam in the period from 2000 to 2010
Part 3 - Causes and recommendations for reducing Inequality in Income

3. Part 1 – Literature Review
Equity
Headcount index
Lorenz curve
GINI coefficient
Kuznets model

4. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
~ 15,000,000,000 VND
/1,000,000 = 15,000 VND

5. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
2.1. Income distribution among 5 quintiles
(Quintile 1)Poorest 20%
Quintile 2
Quintile 3
Quintile 4
Quintile 5
2002
6.05
10.01
14.1
20.81
49.03
2004
5.85
9.92
14.3
21.2
48.73
2006
5.79
10.02
14.42
21.32
48.44
2008
5.18
9.62
14.11
21.52
49.56
2010
5.32
9.63
14.41
21.48
49.15

6. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
2.1. Income distribution among 5 quintiles
2002
2010
 Lorenz curve stays the same after 10 years

7. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
2.2. Income distribution between rural and urban area
2002
2004
2006
2008
2010
Income gap between urban and rural arear
347
437.3
552.7
843.0
1059.5
Income of urban/Income of rural
2.26
2.16
2.09
2.11
1.99
90,000 VND
216,500 VND
GSO, Reports on living standards of households, 2000 - 2010

8. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
2.3. Income distribution among 8 regions in Vietnam
Monthly Income per capita of 8 regions of Vietnam (2002-2010) (Source GSO)

9. Part 2 – Situation of Income inequality in Vietnam 2000 - 2010
2.4. GINI coeffiecient
Gini coefficient by urban-rural and region in Vietnam (2002-2010)

11. Part 3 – Causes and Recommendations
•3.1. Causes
Unreasonable growth model and resource allocation mechanism.
The process of industrialization and urbanization
Transition from a centrally planned mechanism to market mechanism
Unprofessional business environment, lack of transparency

12. Part 3 – Causes and Recommendations
3.2. Recommendations
 Economic solutions
 Redistribution
 Poverty Reduction Strategies

13. Part 3 – Causes and Recommendations
Economics solutions
Credit solutions
2 issues in the process of implementation of policies related to low-interest credit
How to distribute capital to the real impoverished people
How to use the capital effectively and rightly
Credit programs in Vietnam
 Loan program to farmers households.
 Bank Credit to the poor

14. Part 3 – Causes and Recommendations
Investment on Agriculture and socio- economic field in rural and mountainous areas:
•restructuring of agricultural production
•planning and constructing social and economic infrastructure in rural areas
•building integrated social centres for agricultural development
•effectively implementing the policies related to land field, tax and prices
•increasing the role and management ability of local officials.

15. Part 3 – Causes and Recommendations
In mountainous areas:
Expanding the area of food crops/ applying the advanced techniques
Developing the industries serving the mountainous areas and sub-industries in remote areas
Linking forest development with the sedentary, stable production and life of the household.
Concentrating on construction and development of the town center
 Developing the network of healthcare, culture and education in remote areas

16. Part 3 – Causes and Recommendations
3.2. Recommendations
Redistribution
Redistribution of Income: Income tax
Redistribution of jobs: + Support workers in agricultural sector + Enhance the quality of tertiary and vocational schools + Support and build up more SMEs + Relocate workers to newly industrial zones

17. Part 3 – Causes and Recommendations
3.2. Recommendations
 Poverty Reduction Strategy
Distribute land to farmers
Reinforce and better the infrastructure in poor areas to support trade activities.
Enhance the awareness of households on maternity health and safe sex.
Support the disabled people, people who live in extreme poverty, families of the war invalids.

18. Conclusion
 Need to balance: Efficiency and Equity
 Income Inequality should receive more and more attention for the sake of the sustainable growth in the future.

19. Thank you for listening