Better Opportunities for All : Vietnam Poverty and Shared Prosperity Update
A massive reorganization of the rural labor market is underway, with workers leaving agriculture in large numbers. The agriculture sector has been consistently losing an average of 4 percent of its workforce annually since 2013. Most of those leavi...
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| Format: | Report |
| Language: | English |
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World Bank, Hanoi
2020
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| Online Access: | http://documents.worldbank.org/curated/en/263641585719751419/Vietnam-Poverty-And-Shared-Prosperity-Update-Better-Opportunities-for-All http://hdl.handle.net/10986/33545 |
| Summary: | A massive reorganization of the rural
labor market is underway, with workers leaving agriculture
in large numbers. The agriculture sector has been
consistently losing an average of 4 percent of its workforce
annually since 2013. Most of those leaving agriculture have
remained in rural areas and been absorbed into
non-agriculture sectors, which have been creating rural
nonagricultural jobs at a rapid pace. Nearly 4 million
off-farm jobs have been created in rural areas since 2013,
mostly in the industry sector, led by manufacturing. There
are now almost as many non-agricultural jobs as agricultural
jobs in rural areas. The share of people in wage employment
in rural areas has risen dramatically, reaching 38 percent
in the first quarter of 2018, compared with just 28 percent
in 2013. Unlike densely populated areas, growth of
non-agriculture sectors in more distant, low-density areas
is normally based on absolute advantage, driven by external
demand, and delivered mostly by small and medium enterprises
(SMEs) due to the limited scope for achieving scale.
Strategies to expand economic opportunities in these areas
should aim to: (i) create a secondary economy supporting
industries based on the regional absolute advantages; (ii)
integrate these areas into the network economy to expand
their market potential; and (iii) reduce the cost of
migration to increase long-distance migration domestically.
This report is therefore focused on identifying the
challenges preventing, and ways to enhance, the poor’s
participation in more productive income-generating
opportunities. The analysis focuses exclusively on rural
areas, where 95 percent of the current poor reside. It is
presented in four sections. The first section presents the
evolution of rural incomes in Vietnam since 2010, showing
how non-agricultural incomes have grown in importance and
broadly transformed rural livelihoods. The second section
then explores the role of household and farm-specific
attributes, alongside local economies, in facilitating
non-agricultural employment, to identify the most critical
factors holding back the poor from being integrated into
off-farm activities. The third section turns to
opportunities in agriculture. This focuses on identifying
challenges and policy remedies for optimizing crop and
land-use choices among lagging groups to maximize their
agricultural incomes. The report concludes with a section on
policy implications, building on the presented analysis to
suggest policy options that provide a pathway for the
economic integration of the poor. |
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