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sustainabilty
EADN RP1-10

EADN Regional Project on the Social Impact of the

Asian Financial Crisis

Social Impact of the East Asian Crisis and Household
Coping Mechanisms in Vietnam
By

Tran Tho Dat

January 2002

1

INTRODUCTION
The Vietnamese government launched the innovation (doi moi) programme in 1986, with a significant degree of market orientation to unleash the productive capacity of the country and a gradual opening up to the regional and global communities. Although the performance of the Vietnamese economy has been quite impressive since the launch of the reform process, a study published by the United Nations in 1996 (UNDP and UNICEF 1996) warned that the economy appeared to be heading towards its own major financial crisis for many of the same reasons that a number of countries in East Asia suffered from the Asian crisis. The study concluded that while the general macroeconomic picture still looked impressive in Vietnam, a more detailed analysis strongly indicated that the existing framework of incentives, processes and government appeared financially unsustainable (UNDP, 1998b).
The primary objectives of this paper are to analyse the impact of the regional crisis in
Vietnam on both selected economic and social indicators and to examine the coping mechanisms of households. The paper is organized as follows. The next section mainly assesses the impact of the regional crisis on the economy, followed by an analysis of the social impact of the economic crisis. The effects on households, and the coping mechanisms used by households are discussed in the following section. The concluding section offers some policy responses and attempts to draw some lessons from the crisis.
IMPACT OF THE ASIAN CRISIS
When the regional financial crisis broke out in 1997, it was believed that the crisis would have very little effect on Vietnam’s economy. There were several reasons for this belief.
First, the Vietnamese economy was still mainly



References: Bui Anh Tuan. “Employment in FDI”. Economics and Development Review, Hanoi National Economics University, 27, November-December, 1998. Central Institute for Economic Management. Vietnam’s Economy in 1998. Hanoi: Central Institute for Economic Management, (March), 1999. United Nations Development Programme and the Korea Development Institute, 1998. (22-24 April), 1998. International Monetary Fund (IMF). “Vietnam: Selected Issues and Statistical Annex”. IMF Staff Country Report No 98/30, 1998. Lumpur, (May 31-June 4), 1998. CIEM/UNDP/UNIDO workshop on “How to make integration work”, (March), 1999. Nations Development Programme and the Korea Development Institute, 1998. Hanoi: UNDP and UNICEF, 1996. ______. Human Development Report. New York: Oxford University Press, 1998a. ______. “East Asia: From Miracle to Crisis-Lessons for Vietnam”. UNDP Staff Paper, (November), 1998b. ______. Human Development Report. New York: Oxford University Press, 1997. ______. Human Development Report. New York: Oxford University Press, 1996a. Vu Thu Giang. Women ' s Labour in the Informal Sector in Hanoi. Hanoi: Hanoi National Economics University, 1999. World Bank. “Vietnam: Rising to the Challenge”. An Economic Report of the World Bank Consultative Group Meeting for Vietnam, (December 7-8), 1998a. ___________. East Asia: The Road to Recovery. Washington DC: World Bank, 1998b . ___________. Social Consequences of the East Asian Crisis. Washington DC: World Bank, 1998c. ___________. “Vietnam: Deepening Reform for Sustaining Growth”. Report No. 17031, Vietnam, (October), 1997. Washington D.C., 1995b.

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