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

UNU-WIDER 01/2010; WP/98.

Posted: 26 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

James Thurlow

UNU-WIDER; International Food Policy Research Institute (IFPRI)

Finn Tarp

University of Copenhagen - Department of Economics

Clemens Breisinger

International Food Policy Research Institute (IFPRI)

Date Written: September 1, 2010

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.

Keywords: economic crisis, growth, poverty, Vietnam

JEL Classification: R0, R5, R14, R52

Suggested Citation

Arndt, Channing and Thurlow, James and Tarp, Finn and Breisinger, Clemens, Impact of the Global Commodity and Financial Crises on Poverty in Vietnam (September 1, 2010). UNU-WIDER 01/2010; WP/98. . Available at SSRN: https://ssrn.com/abstract=2530974

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

James Thurlow

UNU-WIDER ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Finn Tarp

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Clemens Breisinger

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States

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