Vietnam’s poverty rate declined from 16.8% in 2010 to 5% in 2020, with over 10 million people having moved out of poverty, according to a World Bank report.
“In less than half a century since the end of the Vietnam War and 35 years since the Doi moi reforms, Vietnam has become a vibrant economy and a sought-after market to the outside world,” the bank stated. GDP per capita climbed from $481 in 1986 to $2,655 in 2020.
Vietnam’s economic growth was broadly inclusive over the past decade, given the improved welfare across the entire household economic distribution. “Pathways out of poverty were widespread across most groups, as many families moved out of poverty within a single generation."
The WB believed that Covid-19 has interrupted job creation and rising wage income that were the main drivers of poverty reduction. Women in the informal sector, and households in the bottom 20% witnessed the slowest recovery in household income between June 2020 and March 2021.
Around one in five Vietnamese usually live below the economic security line of $5.5 per day, and another one in 10 are vulnerable to occasionally falling below it due to shocks, as noted in the report.
Vietnam’s social assistance coverage is currently lower than many East Asia and Pacific neighbors, and needs to be modernized to provide better protection, the bank advised.
The Communist Party of Vietnam, at the 13th National Congress in 2021, announced Vietnam's goal to become a high-income country by 2045. This required an annual national GDP of 6.7% until 2045, according to the WB.
To achieve this, growth in productivity per worker would need to increase from the 2012–2018 annual rate of 5.3%, the highest of the last three decades, to 6.6%, an acceleration of around 20% every year.
Fiscal policy can play a critical role in driving Vietnam toward high-income status in an inclusive manner to assist the movement of people into a prosperous middle class, it noted.
Carolyn Turk, WB Country Director for Vietnam, said: “Vietnam's poverty and equality agenda is not simply about raising the minimum standard of living and addressing the “Last Mile” chronic poverty concerns, which Vietnam has done extremely effectively so far. The “Next Mile” seeks to develop new and sustainable economic pathways for the country’s upper-middle and high-income aspirations. This is a challenging and unprecedented pathway in a shifting global economic and climatic landscape.”