Income Gap Widens In Fast-Growing Vietnam

Manila, Philippines (AHN) - Income inequality has widened in Vietnam, one of the fastest growing economies in Asia.

"Economic growth in Vietnam has been largely equitable. But as the economic growth accelerates, income disparity can widen," said Ayumi Konishi, ADB's country director for Vietnam.

"Some groups have benefited less from economic growth and are vulnerable to social and economic marginalization. Low-income households face a vicious cycle of remaining poor due to difficulties in accessing health and education services," he said.

Vietnam has already made significant strides in reducing the poverty incidence, which was higher than 58 percent in 1993 to below 20 percent in recent years, said the Manila-based development bank.

With an average gross domestic product (GDP) growth of 7.5 percent over the last decade, GDP per capita in Vietnam increased from $288 in 1993 to $716 in 2006.

But certain areas in the northern and central regions - home to more than half of the country's poor -have a poverty incidence of over 30 percent.

The ADB announced Oct. 11 the approval of a new loan of $15 million to Vietnam. The loan supports the Socioeconomic Development Plan 2006-2010 that aims to reduce the poverty incidence by 10 percent to11 percent in 2010.

The ADB said the loan will help boost efficiency, accelerate economic growth and create jobs. It will help improve the quality of education, access of the poor to health services, promote a reformed social protection system and gender equality, the ADB said.

The loan will help secure land ownership and address the resettlement and compensation process. Accountability in public financial management is also expected to improve.