Last update 4/3/2012 12:07:00 PM (GMT+7)

Vietnam’s income per capita far lagging behind regional countries

VietNamNet Bridge – The average income per capita of Vietnamese people is still far lagging behind the income per capita in ASEAN countries and China, though the income has been increasing considerably in the last years as a result of the doi moi (renovation) period.

Vietnamese still poor…

Meanwhile, the scenario that Vietnam can catch up with China and other ASEAN’s economies would still be a far away dream, if Vietnam lacks the driving force for reform.

This is the warning released by a scientific research work at the national level carried out by the Hanoi Economics University. The research work was conducted at the request of the National Assembly’s Economics Committee, which cited the figures about the income per capita in Vietnam and in other regional countries released by the International Monetary Fund (IMF) in 2010.

If considering the exchange rate, the GDP per capita increased from 114 dollars in 1991 to 1061 dollars in 2010. Meanwhile, China’s GDP per capita increased from 353 dollars to 3915 dollars during the same time.

As such, the income per capita of Vietnamese people, which was equal to 32 percent of China’s, then dropped to 27 percent in 2010.

If considering the PPP (purchase parity power), the GDP per capita in Vietnam was 706 dollars in 1991 and then increased to 2948 dollars in 2010. During the same time, the figures in China rose from 888 dollars to 6786 dollars.

As such, the income per capita in Vietnam was equal to 80 percent of Chinese in 1991, but the figure dropped to 43 percent in 2010.

If comparing with other ASEAN countries, though the gap between Vietnamese and ASEAN income per capita has been narrowed in the last 20 years, the gap is still big at this moment.

Thoi bao Kinh te Saigon quoted Dr Pham Hong Chuong from the Hanoi Economics University as saying that Vietnam’s GDP per capita in PPP was less than a half of that of the Philippines or Indonesia, 1/5 of Thailand, 1/10 of Malaysia in 1991.

The figures then exceeded the thresholds of ¾, 1/3 and 1/5 of the above said countries after nearly 20 years.

In general, Vietnam’s GDP per capita in 2010 was 1061 dollars by exchange rate and 2948 dollars by PPP, which, according to Chuong, are far below the average levels in Asia and the world.

After more than a quarter of a century of renovation, Vietnam has escaped from the group of countries with low income to the group with medium income, in accordance with the World Bank’s standards.

However, according to Chuong, Vietnam’s economic growth still cannot show the strong determination and its capability to escape from the risk of lagging behind in the development.

The report also showed the unemployment rate of 4.6 percent in urban areas and 20 percent in rural areas, which means that over 10 million workers stay unemployed in Vietnam.

In fact, the fact that Vietnam’s income per capita is outdistanced by regional countries is not a new story.

The 2009 Vietnam Development Report of the World Bank showed that Vietnam’s income per capita was behind by 51 years in comparison with Indonesia, 95 years with Thailand and 158 years with Singapore.

… but spend money like water

The fact that Vietnamese are extravagant consumers has become well-known in the world. Nguyen Tran Bat, a well-known economist, said on Doanh Nhan that his foreign friends, including billionaires, many times expressed their surprise about the spending money like water of Vietnamese people.

A friend of Bat’s, a French professor, who arrived in Vietnam in 1970s, saw a taxi driver smoking a 555 cigarette and asked how many 555 cigarettes could he buy with his salary. The driver said that his salary was just enough to buy 3-4 cigarettes only. The French professor then said that Vietnamese people even spend more than American.

C. V