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The Impact of the Global Commodity and Financial Crises on Poverty in Vietnam

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  • Thurlow, James
  • Tarp, Finn
  • McCoy, Simon
  • Hai, Ngugyen Manh
  • Breisinger, Clemens
  • Arndt, Channing

Abstract

Economic growth in Vietnam has been fairly resilient to the global commodity and financial crises, but it is unclear why. In addition, the impact of the crises on employment and poverty is in dispute. We develop a dynamic computable general equilibrium model to decompose impacts and estimate distributional outcomes. Our results indicate that the 2008 commodity crisis increased employment and reduced poverty by favouring labour-intensive exports, especially in agriculture. The 2009 financial crisis reversed these gains. It pushed more than a million workers into unemployment and about 3 million people below the US$2-a-day poverty line, with the vast majority of these being rural dwellers. The net effect of the crises left Vietnam little changed from a baseline (no crises) path in terms of aggregate indicators including the poverty rate. An effective stimulus package has the potential to offset one third of the increase in poverty caused by the financial crisis leaving poverty rates below the (no crises) baseline.

Suggested Citation

  • Thurlow, James & Tarp, Finn & McCoy, Simon & Hai, Ngugyen Manh & Breisinger, Clemens & Arndt, Channing, 2010. "The Impact of the Global Commodity and Financial Crises on Poverty in Vietnam," WIDER Working Paper Series 098, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2010-98
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    References listed on IDEAS

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    1. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
    2. Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low-income countries-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
    3. Arndt, Channing & Benfica, Rui & Maximiano, Nelson & Nucifora, Antonio M.D. & Thurlow, James, 2008. "Higher fuel and food prices: Economic impacts and responses for Mozambique," IFPRI discussion papers 836, International Food Policy Research Institute (IFPRI).
    4. Abbott, Philip & Bentzen, Jeanet & Tarp, Finn, 2009. "Trade and Development: Lessons from Vietnam's Past Trade Agreements," World Development, Elsevier, vol. 37(2), pages 341-353, February.
    5. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
    6. Channing Arndt & Rui Benfica & Nelson Maximiano & Antonio M. D. Nucifora & James T. Thurlow, 2008. "Higher fuel and food prices: impacts and responses for Mozambique," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 497-511, November.
    7. Glewwe, Paul & Gragnolati, Michele & Zaman, Hassan, 2002. "Who Gained from Vietnam's Boom in the 1990s?," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 773-792, July.
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    Cited by:

    1. World Bank, 2012. "Republic of Yemen - Joint Social and Economic Assessment," World Bank Other Operational Studies 12284, The World Bank.
    2. Breisinger, Clemens & Ecker, Olivier & Al-Riffai, Perrihan & Engelke, Wilfried & Al-Bataly, Abdulmajeed, 2012. "Managing transition in Yemen: An assessment of the costs of conflict and development scenarios for the future," IFPRI discussion papers 1210, International Food Policy Research Institute (IFPRI).
    3. World Bank & United Nations & European Union & Islamic Development Bank, 2012. "Joint Social and Economic Assessment for the Republic of Yemen," World Bank Other Operational Studies 11920, The World Bank.
    4. Rodriguez-Takeuchi, Laura & Imai, Katsushi S., 2013. "Food price surges and poverty in urban Colombia: New evidence from household survey data," Food Policy, Elsevier, vol. 43(C), pages 227-236.
    5. McKay, Andy & Tarp, Finn, 2014. "Distributional impacts of the 2008 global food price spike in Vietnam," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    6. Bryan, Elizabeth & De Pinto, Alessandro & Ringler, Claudia & Asuming-Brempong, Samuel & Bendaoud, Luís Artur & Givá, Nicia & Anh, Dao The & Mai, Nguyen Ngoc & Asenso-Okyere, Kwadwo & Sarpong, Daniel, 2012. "Institutions for agricultural mitigation: Potential and challenges in four countries," CAPRi working papers 107, International Food Policy Research Institute (IFPRI).

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    Keywords

    Economic crisis; growth; poverty; Vietnam;

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