Why Vietnam is Still Poor
Why Vietnam is Still Poor

There are no simple, straightforward answers as to why some countries are poor. There are
There are no simple, straightforward answers as to why some countries are poor. There are

many factors that come into play as to their poor state and some are controversial, but
many factors that come into play as to their poor state and some are controversial, but

nonetheless factual.
nonetheless factual.

When looking at different nations of the world, economists use gross domestic product (GDP)
When looking at different nations of the world, economists use gross domestic product (GDP)

per capita as an indicator of a country’s economic well-being. GDP is the total market
per capita as an indicator of a country’s economic well-being. GDP is the total market

value of all final goods and services that a particular economy produces in a year.
value of all final goods and services that a particular economy produces in a year.

To become a high-income country by 2045, Vietnam needs to sustain average growth rates of at
To become a high-income country by 2045, Vietnam needs to sustain average growth rates of at

least 7% in the years ahead. While the country has the means to do this, without reform,
least 7% in the years ahead. While the country has the means to do this, without reform,

it will just slow down and remain poor.
it will just slow down and remain poor.

Vietnam – Many Living Below the Poverty Line
Vietnam – Many Living Below the Poverty Line

When you divide a country's GDP by its population, you get an idea of how much income, on average,
When you divide a country's GDP by its population, you get an idea of how much income, on average,

the economy produces for each person each year. GDP is a measure of a nation’s standard
the economy produces for each person each year. GDP is a measure of a nation’s standard

of living.
of living.

It is interesting to note however, that some developing countries have a higher GDP than
It is interesting to note however, that some developing countries have a higher GDP than

developed countries. A country is thought to be poor if its people don’t have a certain
developed countries. A country is thought to be poor if its people don’t have a certain

living standard.
living standard.

There are many people in Vietnam who don’t have a good living standard. Just how poor
There are many people in Vietnam who don’t have a good living standard. Just how poor

is this Southeast Asian country on the South China Sea? Should the country be poor seeing
is this Southeast Asian country on the South China Sea? Should the country be poor seeing

that it has a long coastline with top-notch harbors as well as a vibrant tourism industry?
that it has a long coastline with top-notch harbors as well as a vibrant tourism industry?

● Poverty
● Poverty

Half of Vietnam’s population among ethnic minorities still live below the poverty line.
Half of Vietnam’s population among ethnic minorities still live below the poverty line.

People from these ethnic minority backgrounds are isolated, not only geographically but
People from these ethnic minority backgrounds are isolated, not only geographically but

socially too.
socially too.

The government has at least tried to address this problem and they instituted their CEMA
The government has at least tried to address this problem and they instituted their CEMA

committee - Committee for Ethnic Minority and Mountainous Area Affairs. They want to
committee - Committee for Ethnic Minority and Mountainous Area Affairs. They want to

work to improve education as well as social opportunities for this particular population.
work to improve education as well as social opportunities for this particular population.

Vietnam is a very populous country with close to 100 million people, but a good percentage
Vietnam is a very populous country with close to 100 million people, but a good percentage

of the people live in poverty. Factors that have contributed to poverty include large
of the people live in poverty. Factors that have contributed to poverty include large

families even when parents are unemployed. This is one of the controversial topics that
families even when parents are unemployed. This is one of the controversial topics that

people don’t like to address but which is a stark reality. Then there is also a lack
people don’t like to address but which is a stark reality. Then there is also a lack

of education and lack of skills.
of education and lack of skills.

Based on the drop in the country’s poverty rate between the years 2010 and 2014, conditions
Based on the drop in the country’s poverty rate between the years 2010 and 2014, conditions

in the nation definitely improved. However, issues such as a poor education system, a
in the nation definitely improved. However, issues such as a poor education system, a

poor and deteriorating infrastructure as well as ethnic discrimination, is still threatening
poor and deteriorating infrastructure as well as ethnic discrimination, is still threatening

its growth in 2019.
its growth in 2019.

● Mismanagement of Funds
● Mismanagement of Funds

The United States has been strategizing with Vietnam. The idea being to transform the country
The United States has been strategizing with Vietnam. The idea being to transform the country

into a more sustainable developing one. To this end a 5-year plan was developed in 2014.
into a more sustainable developing one. To this end a 5-year plan was developed in 2014.

Millions of dollars have been allocated to improve not only trade but to also develop
Millions of dollars have been allocated to improve not only trade but to also develop

higher education.
higher education.

In fact the country has set Sustainable Development Goals or SDGs, achievable by 2030. These are
In fact the country has set Sustainable Development Goals or SDGs, achievable by 2030. These are

goals to improve the healthcare system, tackle issues of equality and improve the country’s
goals to improve the healthcare system, tackle issues of equality and improve the country’s

poverty rate.
poverty rate.

These seem like good plans to pull Vietnam out of poverty, so why is Vietnam still poor?
These seem like good plans to pull Vietnam out of poverty, so why is Vietnam still poor?

Where is all the financial help and transformation efforts going? It’s not as though there
Where is all the financial help and transformation efforts going? It’s not as though there

wasn’t an improvement, but in spite of some true successes for Vietnam, poverty remains
wasn’t an improvement, but in spite of some true successes for Vietnam, poverty remains

an issue.
an issue.

● Resisting Western Influence
● Resisting Western Influence

There are political experts who believe that Vietnam is still poor because they resisted
There are political experts who believe that Vietnam is still poor because they resisted

Western influence in the 19th century. It is still having negative repercussions. Their
Western influence in the 19th century. It is still having negative repercussions. Their

resistance to this influence caused the country to fall behind advanced countries, becoming
resistance to this influence caused the country to fall behind advanced countries, becoming

prey for imperialist powers.
prey for imperialist powers.

● No Infrastructure – No Private Sector Growth
● No Infrastructure – No Private Sector Growth

Failing infrastructure though, still remains one of the reasons that the country remains
Failing infrastructure though, still remains one of the reasons that the country remains

poor. Efforts have been made to bring electricity to everyone but their infrastructure systems
poor. Efforts have been made to bring electricity to everyone but their infrastructure systems

for water, sanitation, energy and telecommunication is still not good, and the private sector
for water, sanitation, energy and telecommunication is still not good, and the private sector

can’t grow.
can’t grow.

The government’s approach to infrastructure development hasn’t been driven, and some
The government’s approach to infrastructure development hasn’t been driven, and some

small developments have scarcely made a difference. What the government needs to do is to accelerate
small developments have scarcely made a difference. What the government needs to do is to accelerate

productive investment – to boost the productivity of the country’s huge labor force with investment
productive investment – to boost the productivity of the country’s huge labor force with investment

in infrastructure, machinery, and technology. Of course, it will require a more efficient
in infrastructure, machinery, and technology. Of course, it will require a more efficient

financial system.
financial system.

The country’s Socio-Economic Development Strategy for 2016-2020 acknowledges these
The country’s Socio-Economic Development Strategy for 2016-2020 acknowledges these

problems as reasons why the country can’t rise out of its poverty. It does however seem
problems as reasons why the country can’t rise out of its poverty. It does however seem

to realize the need to change things and accelerate progress.
to realize the need to change things and accelerate progress.

● Corruption in High Places
● Corruption in High Places

Many people say that the country’s infrastructure is lacking because of corruption within Vietnam’s
Many people say that the country’s infrastructure is lacking because of corruption within Vietnam’s

leadership. They reckon that Vietnam’s government is corrupt.
leadership. They reckon that Vietnam’s government is corrupt.

When you look at the Corruptions Perceptions Index world, Vietnam doesn’t rank well.
When you look at the Corruptions Perceptions Index world, Vietnam doesn’t rank well.

All the money supposed to be going towards health care, education and infrastructure
All the money supposed to be going towards health care, education and infrastructure

is going straight into the pockets of many government officials. They make business deals
is going straight into the pockets of many government officials. They make business deals

that benefit them but cause damage to the state budget and also damage to the economy.
that benefit them but cause damage to the state budget and also damage to the economy.

The sad reality is that Vietnam’s actual quality of life isn’t poor because its people
The sad reality is that Vietnam’s actual quality of life isn’t poor because its people

are uneducated or lazy. No, most Vietnamese are hard-working, aspirational people who
are uneducated or lazy. No, most Vietnamese are hard-working, aspirational people who

want a decent life for themselves and their families. But they have to contend with their
want a decent life for themselves and their families. But they have to contend with their

corrupt government. They should be demanding accountability from these people.
corrupt government. They should be demanding accountability from these people.

● Natural Hazards
● Natural Hazards

Unfortunately, if it’s not the government, the country also has its fair share of natural
Unfortunately, if it’s not the government, the country also has its fair share of natural

hazards such as flooding. The country has a super long coastline – 3200km long, and
hazards such as flooding. The country has a super long coastline – 3200km long, and

most of its population lives in coastal areas and low-lying deltas.
most of its population lives in coastal areas and low-lying deltas.

The country is also heavily exposed to climate change and this is expected to increase sea
The country is also heavily exposed to climate change and this is expected to increase sea

levels and coastal flooding. Flooding causes major problems in Vietnam and this natural
levels and coastal flooding. Flooding causes major problems in Vietnam and this natural

disaster increases poverty.
disaster increases poverty.

Poor people often take longer to recover from a flood because of no insurance and limited
Poor people often take longer to recover from a flood because of no insurance and limited

or no borrowing capacity. Government is supposed to offer support after a flood, but this is
or no borrowing capacity. Government is supposed to offer support after a flood, but this is

often inadequate to support losses.
often inadequate to support losses.

A Turbulent Past
A Turbulent Past

Decades of war between 1945–75 have taken their toll on the country for sure, and until
Decades of war between 1945–75 have taken their toll on the country for sure, and until

1989, much of the government’s resources went into the occupation of Cambodia and a
1989, much of the government’s resources went into the occupation of Cambodia and a

border war with China.
border war with China.

Vietnam was both politically and economically isolated from countries such as China and
Vietnam was both politically and economically isolated from countries such as China and

the USA, keeping a trade embargo in place. A process of reform began but trade with America
the USA, keeping a trade embargo in place. A process of reform began but trade with America

and neighboring countries only started really in 1994. By then Vietnam’s economy was in
and neighboring countries only started really in 1994. By then Vietnam’s economy was in

a mess.
a mess.

Vietnam has enjoyed growth in the reform era, from 1994 till now, and it is perhaps not
Vietnam has enjoyed growth in the reform era, from 1994 till now, and it is perhaps not

ranked as one of the world’s poorest countries anymore, but mismanagement and corruption
ranked as one of the world’s poorest countries anymore, but mismanagement and corruption

in high places may well ensure that this country doesn’t move up to where it belongs.
in high places may well ensure that this country doesn’t move up to where it belongs.