Our research highlights a number of key findings in Vietnam:

  • The benefits of rapid economic growth have been unequally distributed across the population.
  • Rural areas, particularly the mountainous north, still rely primarily on agriculture for employment and suffer greater disadvantages than urban areas.
  • Ethnic minorities are significantly disadvantaged and require considerable further assistance to improve their living standards.
  • Rural areas have the highest percentage of people in poverty but urban areas have the highest number of people in poverty.
  • Healthcare funding and outcomes have improved significantly in recent decades but Vietnam still lags far behind OECD health averages, with problems such as undernutrition being particularly problematic. 92% of the population has access to improved water and 76% to improved sanitation facilities, but large discrepancies exist in the statistics between rural and urban areas.
  • Literacy and educational outcomes continue to improve, but many children stop attending school after primary years. Access to education poses problems in rural areas.
  • Cost, disability, ethnicity, and gender are the four primary inhibitors of access to education.
  • Access to government services has improved markedly in the past 20 years, but cost prohibits disadvantaged groups from gaining maximum benefit from government services.
  • The government has sought to increase economic prosperity by introducing market-based systems in many areas of the Vietnamese economy. However, this has affected farmers and exacerbated rural inequality, causing movement into cities and the creation of an urban poor.
  • Vietnam receives large amounts of international aid, but it comprises only 4.5% of GDP. Japan, the Asian Development Bank, and the World Bank are the largest aid contributors.
  • There are approximately 130 registered international NGOs currently operating in Vietnam. These are complemented by numerous Vietnamese organizations which carry out more localized development assistance. These two types of organizations often work together to achieve common goals.
  • There is a clear legal framework that governs the activities of all international NGOs in Vietnam. They must obtain one of three registration certificates and projects must be reported to the central government.
  • Many organizations exist with which AAI could partner or use to find local Vietnamese partner organizations. The NGO sector in Vietnam is wide-ranging and has organizations working in all areas.

GDP and GDP growth rates

In 2011, nominal GDP reached US$121.6 billion in Vietnam. GDP growth rates of Vietnam have continuously reached a high level. From 2000 until 2012, Vietnam’s GDP Growth Rate averaged 6.3% with an all-time high of 8.5% in December 2007 and a low of 3.1% in March 2009.

GDP in the first quarter of 2013 expanded 4.89% over the same quarter of 2012. In recent years, the nation has been rising as a leading agricultural exporter and an attractive foreign investment destination. As a result, Vietnam has been growing faster than Australia whose GDP growth rate averaged 2.6% from 2003 to 2012.3 In the last four years, Vietnam has also had higher growth than other countries in the surrounding East Asia & Pacific Region like Cambodia, Thailand, or the Philippines.

Income and Inflation

Vietnam has transformed from one of the poorest countries in the World with per capita income yearly below US $100 per year to a lower-middle-income country with a per capita income of US $1,130 by the end of 2010.

The average monthly income per person in Vietnam is around 3.84 million VND, which is about US $185.6 This monthly average income per capita across the country increased 18.1% per year on average in the period 2008 to 2012. Real income (controlled for price changes) in the period 2008-2012 increased 9.3% per year.

Labour force

There are substantial differences both in the age structure of the labour force and across urban and rural areas. About 69.4% of the whole labour force in Vietnam is still concentrated in rural areas.8 The share of the labour force in young ages (15-24years) and in older ages (55years and above) of urban areas is lower than in rural areas.

This indicates that urban people tend to enter the labour force later and leave the labour force earlier than people in rural areas. The explanation of this phenomenon is that the young population in urban areas tend to spend longer in school and the older people in urban areas retire earlier.

Industrial sectors in Vietnam

The urban area of Ho Chi Minh City has the most developed economic structure, with 97.2% of the employed population working in the industry, construction and services. In contrast, the proportion of labour working in the sector of “Agriculture, forestry and fishery” is quite high in the mountainous and coastal areas (Central Highlands: 70.8%, Northern Midlands and Mountains: 69.9% and North and South Central Coast: 55.4%).

Vietnam’s key producing goods are rice, cashew nuts, black pepper, coffee, tea, fishery products and rubber. In fact, Vietnam is the second-largest coffee exporter after Brazil and one of the largest oil producers in the region. Manufacturing, information technology and high-tech industries constitute a fast-growing part of the economy, mainly in the areas of Hanoi and Ho Chi Minh City.

Poverty in Vietnam

Vietnam has made impressive achievements in poverty reduction. Broad-based economic growth has improved the well-being of many people. The General Statistical Office estimates that the poverty rate fell consistently from 58% in 1993 to 37.4% in 1998, 28.9% in 2002, 16% in 2006 and 14.5% in 2008. About 28 million people are estimated to have been lifted out of poverty over approximately fifteen years.

The multi-dimensional indication of child poverty includes not only the economic dimension but other key areas related to child development needs: education, health, nutrition, housing, clean water, sanitation, not having to work at an early age, entertainment, inclusion and social protection. Children for whom 2 or more of these areas are not met will be considered multidimensional poor children.

In Vietnam, the rate of multi-dimensional poverty among children aged below 16 in 2010 was 29.6%. It can be seen that there are differences in the rate of multi-dimensional poverty among children between urban and rural areas, among regions, ethnic groups and age groups. Most poor children live in rural areas. The two regions with the highest rate of multidimensional poverty among children were the Northern midlands and mountain areas and the Mekong River Delta. The rate of poverty among minority ethnic children was also higher.


Some of the most important statistics for measuring the health of a population include infant mortality and mortality of children under five years of age. This is because these figures reflect the effectiveness of a country’s health system and the overall effect of economic and social conditions on the health of the most vulnerable human beings, mothers and young children.

The importance of early intervention: UNDP Human Development Report highlights the importance of good health in childhood: “By the time we are ten, our capacity for basic learning has been determined. By the time we are 15, our body size, reproductive potential and general health has been profoundly influenced.”

Infant mortality: Defined as the number of children who die before reaching their first birthday, expressed as x per 1000 births. Estimates of the infant mortality rate vary between 14 and 19 per 1000 births, compared with Australia/OECD average 4/1000 (2010). Infant mortality rate in Vietnam declined by 59% between 1980-2010. Factors influencing the rate include the health of the mother, maternal care and birth weight. Common causes of death include diarrhoea, pneumonia and malnutrition.

Under-5 mortality: Defined as the probability that a child born in a given year will die before reaching their fifth birthday, expressed as x per 1000 births. Estimated figures for Vietnam vary between 16 and 23 per 1000 births, compared with Australia/OECD average 5/1000. Common causes include pneumonia, prematurity, birth asphyxia and congenital anomalies. However, approximately one third of all under-5 deaths are caused by under-nutrition.

These aggregate statistics hide the variations within different income and ethnic groups. Ethnic minorities and the poor are disproportionately overrepresented in these statistics. According to the Vietnamese Office for National Statistics, infant and under-5 mortality for the poorest 20% is 23 and 28 per 1000 births, respectively, compared with 11 and 12 for remaining 80% of the population. Even starker differences exist between ethnic minorities, whose infant and under-5 mortality figures stand at 30 and 39 per 1000 births, respectively, compared with 10 and 12 per 1000 births for the ethnic majorities of Kinh and Hoa.

Healthcare system in Vietnam

The state of healthcare systems in Vietnam can be gauged with reference to health expenditure per capita, health expenditure as a share of GDP and the number of doctors in relation to the population. These statistics show the amount of resources being allocated towards healthcare, and the actual resources available.

Total health expenditure: ‘the sum of expenditure on all the core health care functions that is total health care services, medical goods dispensed to outpatient, prevention and public health services, and health administration and health insurance – plus capital formation in the health care provider industry.’ This figure for Vietnam, for both public and private sectors, stood at 214 USD PPP in 2010. The OECD average was 3265, and Australia’s total expenditure was 3441. Vietnam does however boast a growth rate for this figure that is twice the average for the Asian region (8.9% in Vietnam compared with 5.6% in Asia, 3.6% OECD average and 2.0% in Australia)

Health expenditure as a percentage of GDP: in Vietnam, this figure was 6.8%, compared with OECD average of 9.5% and Australia with 8.7%. Health expenditure in Vietnam is increasing at a pace which has overtaken the economic growth rate, which means that health expenditure as a share of GDP is on the increase. Doctors per 1000 population: In 2008, Vietnam had 1.2 doctors per 1000 population. This can be contrasted with the OECD average of 3.1, and Australian figure of 3.0.


Nutrition in the right quantities and quality is one of the key pillars of good health. Under nutrition in childhood jeopardises children’s physical and cognitive development, especially when it occurs during pregnancy and the first two years of life.

Under-nutrition is also closely linked to high child mortality, vulnerability to infections and reduced productivity in adult life. Because poor people have few assets other than their labour, and because finding a sustainable livelihood through work remains one of the few poverty exit strategies available to poor families, stunting and its effects on productivity play into the intergenerational transmission of poverty.

Dietary energy consumption in Vietnam is 2656 calories/person/day, this is well below OECD average (3384) and Australia (3246), but above the Asia-Pacific average (2591). Vietnam has however cut hunger and reduced poverty from about 58% of the population in 1993 to just 18% in 2011. According to Oxfam’s Vietnam country director Steve Price-Thomas, “…this means that since 1993 roughly 6,000 people per day have been pulled out of hunger poverty. “Agricultural land reform, heavy investment in irrigation and agricultural technology, as well as the development of the domestic rice industry are believed to have played a critical role”. “Vietnam’s track record is one of the best in the world. They are absolutely a role model within East Asia and more broadly in the world.”

Under-nutrition is most often the consequence of a lack of access to good quality food and/or illness, particularly diarrhoea, and its effects are permanent. These include underdeveloped organs and cognitive impairment. This highlights the importance of prevention and early intervention, and the ‘critical window’ lasts from when the woman is pregnant until the child is two years old. Successful interventions have taken place for example in the forms of treating undernourished mothers, encouraging breastfeeding, advocating appropriate micronutrient interventions (including treatment for Vitamin A deficiencies and Iodine Deficiency Disorder) and raising awareness of hygienic and appropriate nutrition.

Different categories for undernourishment include stunted (height-for-age malnourished), underweight (weight-for-age malnourished) and wasted (weight-for-height malnourished). For example, stunted growth is the result of malnutrition during foetal development and childhood, There are significant inequalities between geographical areas, between Kinh/Hoa and ethnic minority children, between different income and education levels. The following figures are for children under the age of five.

Water, hygiene and sanitation

Access to safe drinking water and hygienic sanitation form another cornerstone of good health. Improved water sources include those that are in some way protected from outside contact. In Vietnam, 92% of the population use an improved drinking water source. Of these people, 23% have access to piped water, whilst 71% have access to some other kind of protected water source (wells, boreholes, public taps etc.).

The majority of the remaining 8% of the population who have no access to improved water sources use some forms of water treatment, for instance boiling, and only 12% of these people do not treat their drinking water in any way. Again, these figures hide regional and ethnic variations. Only 68% of ethnic minorities have access to an improved water source. 76% of the population in Vietnam have access to improved sanitation facilities, which include flush toilets connected to sewage systems, septic tanks or pit latrines, ventilated improved pit latrines with slabs, and composting toilets. 42 The variations within this figure in terms of rural and urban areas and ethnicity are significant, with urban ethnic majorities enjoying most sanitation coverage and ethnic minorities having access levels as low as 44%.

Open defecation is not an issue, but the disposal of the faeces of children under the age of two in an unsafe manner is fairly common in the general population (40%) and very common amongst ethnic minorities (78%). For Australia the level of access to both safe drinking water and sanitation is 100%.

Ethnic minorities

Vietnam has about 54 different ethnic groups. The Kinh and Viet (ethnic Vietnamese) are the largest group accounting of 86% of the population. The next largest groups are the Tay, the Thai, the Muong, the Khmer (ethnic Cambodian), the Hoa (ethnic Chinese) and the Hmong which together represent 10% of the population. The remaining ethnic groups make up 4% of the population. Some of these groups have been in Vietnam since the earliest times (e.g. the Viet, the Tay-Thai Groups), while some arrived as recently as around the 17th to 19th centuries (e.g. the Hanhi, the Lahu).

When speaking of ethnic majorities, it is the Kinh and Hoa, whereas all other groups are considered as ethnic minority groups. Although Vietnam has achieved remarkable economic growth and a high percentage of poverty reduction at the national level, such benefits are not evenly distributed across all ethnic groups. While the national poverty rate was reduced from 58% in 1993 to 16% percent in 2006, over the last 13 years, the poverty rate for ethnic minorities has been declining at an average of only 2.6% annually. In 2010, less than 10% of the Kinh were poor against at around 58% of the Ethnic Minorities in the North West and around 70% in the Central Highlands. Although the latter represent only 14% of the total population, they accounted for 44% of all poor and 59% of the poorest in 2010.

Social Analysis

According to the research of the Vietnam Social Analysis report of the World Bank, ethnic minorities face various disadvantages compared with ethnic majorities:

1. Education:

  • Ethnic minorities have less access to education, higher dropout rates and later school enrolment. There is a lack of ethnic minority teachers and bilingual education.
    The illiteracy rate is 29%, more than twice that of ethnic majority people.

2. Health:

  • Ethnic minority infant and under-five mortality rates are higher than those of ethnic majority groups.
    Ethnic minority women are less likely to have or know the correct perception about AIDS.

3. Housing and work:

  • Despite recent economic growth, 55% of the ethnic minority groups still work in agriculture and live in remote and mountainous areas. Less access to utilities and fewer household assets.

Enrolment, Completion and Literacy rates

Since the unification of Vietnam in 1975, education has been one of the priorities of the government, and the country has made significant progress in primary education.

Enrolment rates: Enrolment rates for primary and secondary levels are at 95%, and Vietnam is on track to meet universal access to primary education. School enrolment for secondary education is 77%.

Completion rates: Between 1992 and 2008, primary level completion rates rose from 45% to 90%. 49 In 2011, primary completion rate was 103%. This is the total number of new entrants in the last grade of primary education, regardless of age, expressed as percentage of the total population of the theoretical entrance age to the last grade of primary. This indicator is also known as “gross intake rate to the last grade of primary.” The ratio can exceed 100% due to over-aged and under-aged children who enter primary school late/early and/or repeat grades.

Literacy: The estimated literacy rate of the Vietnamese adult population, people 15 years or older, is 90.3%. This rate differs according to several factors, in that men, urban dwellers, ethnic majorities and young people are more likely to be literate than their counterparts. Variations can also be found within different regions. The highest literacy rates can be found in the Red River Delta and Hanoi region (94.6%), and midrange in the North West and Central Highlands (73.3% and 83.0%, respectively). The lowest literacy rates can be found in the Ha Giang province in the North East at 68.1% and the Lai Chau province in the North West at 51.3%..

Education System in Vietnam

The Ministry of Education and Training (MOET) manages nearly all aspects of the Vietnamese education system, including textbooks and curricula and the regulation of new institutions. Children start primary school at the age of six. Primary education is five years in duration (grades 1-5), and it is followed by four years of lower secondary (6-9) and three years of upper secondary. The first five years are compulsory. The language of instruction is Vietnamese, and the school year runs from September to June.

Primary: Designed for children aged 6 to 10. Curriculum in grades 1-3 consists of arts, mathematics, morality, nature and society, physical education, and Vietnamese language. In grades 4-5 basic technology, geography, history, music and science are added to the list of subjects studied. Children who complete primary education can either continue their studies at lower secondary school or start vocational training. 

Lower secondary: Lower secondary is four years in duration and covers grades 6-9. Unlike primary education, secondary schooling is not compulsory. New subjects studied include a foreign language, physics and civic studies. Students who successfully complete lower secondary education receive the Lower Secondary Education Graduation Diploma, which gives them access to upper secondary education or vocational training.

Upper secondary: Upper secondary is three years in duration and covers grades 10- 12. Admission requirements include the successful completion of lower secondary education and the passing of an entrance exam. There are three different educational streams students may choose from: academic, secondary technical education and vocational training.

Barriers to education

Primary school attendance is high, and there is virtually no difference between boys and girls or between Kinh/Hoa and ethnic minority children. Inequalities in education do exist however, and these are revealed when students transition from primary to secondary education, which reveals both gender and ethnic disparities.

Gender: Secondary school attendance rate is 78.3% for boys and 83.9% for girls, 66.3% for ethnic minority boys and 65% for ethnic minority girls.

Ethnicity: Ethnic minority children face low enrolment and completion and high drop-out and repetition rates. Their primary school completion rate is significantly lower than that of Kinh and Hoa children: 79.8 % and 103.1%, respectively. Overall, one in every three ethnic minority children does not receive secondary education, compared with one in every five Kinh/Hoa children (34.4% versus 16.3%). Differences exist within different ethnic minority groups. There are also differences in the performance rates between ethnic majority and minority children, and these discrepancies have been largely attributed to the issue of language. Most teachers are Kinh and do not speak local languages, whereas ethnic minority children do not necessarily understand Vietnamese. The benefits of mother tongue based education include increased access, improved learning outcomes, reduced dropout rates, and lower overall costs.

Disability: Half of children with disability do not attend school.58 Children of parents with a disability have an enrolment rate of 73% in primary and secondary school, compared with the average of 81%. However, the association of parental disability with educational performance is not statistically significant.

Costs: Public schools do not charge tuition fees until the secondary level, and even then poor families are exempt. Other hidden costs do exist, including school uniforms, pens, notebooks and fees for sanitation.60 These costs are exacerbated for families who live in remote locations and who also have to pay high boarding costs. Reportedly, the dropout rate was high among secondary school students in rural areas, largely because of their parents’ financial difficulties. In ethnic minority areas, these financial difficulties impact upon primary school students as well.

These costs make attendance at secondary school a luxury reserved for better-off families, and also result in some difficult choices: “In one female-headed household, the OEM found a girl of 14 years in grade 4 whose younger sister, aged 9, had never been to school. At the time of the interview, the mother was planning to have the older daughter drop out of school to allow the younger one to go, because she could not afford to send both girls to school.”