Causes of poverty a case study of loc thanh village

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY BUI NHU DIEU CAUSES OF POVERTY A CASE STUDY OF LOC THANH VILLAGE MASTER OF PUBLIC POLICY THESIS HO CHI MINH CITY, 2013 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY FULBRIGHT ECONOMIC TEACHING PROGRAM BUI NHU DIEU CAUSES OF POVERTY A CASE STUDY OF LOC THANH VILLAGE PUBLIC POLICY MAJOR Code: 60340402 MASTER OF PUBLIC POLICY THESIS SUPERVISOR DR JOHNATHAN R PINCUS HO CHI MINH CITY, 2013 i CERTIFICATION I certify that this thesis has not been submitted or being submitted for any degrees I certify that I have acknowledged all information sources as well as reference document The study does not necessarily reflect the views of the Ho Chi Minh Economics University or Fulbright Economics Teaching Program Author Bui Nhu Dieu ii ACKNOWLEDGEMENT I would like to express deeply appreciation to my supervisor, Dr Jonathan R Pincus, who has helped me in performing the thesis With rich knowledge, experience, thoughtful and patient, he has provided me a huge encourages to finish my thesis I would like to thank all my teachers and friend in Fulbright Economics Teaching Program for wonderful time in this school iii ABSTRACT The thesis focuses on finding the causes of poverty and the factors helping people escape from it The causes of poverty in Loc Thanh village are unstable jobs, low returns from land and high dependency ratios Failed investments in pepper farms and high interest debt are two main factor of decline On the contrary, high returns from land are the factor that helps a majority escape from poverty Good jobs are another path to exit poverty Diversification of income sources not only helps household reduce the risks associated with agricultural markets but also helps them have a stable and reasonable income Therefore, policies should focus on increasing farming investment and job opportunity creation iv TABLE OF CONTENTS ACKNOWLEDGEMENT ii ABSTRACT iii TABLE OF CONTENTS iv ABBREVIATIONS vi LIST OF TABLES vii LIST OF FIGURES vii LIST OF BOXES vii CHAPTER 1: INTRODUCTION 1.1 Problem Statement 1.2 Thesis Objective 1.3 Research Question 1.4 Structure of the Study CHAPTER 2: THEORETICAL BACKGROUND 2.1 The Concept of Poverty 2.2 Causes of poverty 2.3 Poverty Reduction 2.4 Data Collection CHAPTER 3: FINDINGS 3.1 Loc Thanh– a snap shot 3.2 The poor – who are they? 13 3.3 Why are they poor? 19 3.3.1 Unstable jobs 19 3.3.2 Low returns to land 20 3.3.3 Poverty and Dependents 21 3.3.4 Getting old and becoming poor 22 3.3.5 Failed investment in pepper farms 23 3.3.6 Poverty and debt 24 3.4 Escaping from poverty 25 3.4.1 Intensive farming 25 3.4.2 Diversification 27 v 3.4.3 Good jobs 27 CHAPTER 4: CONCLUSION AND RECOMMENDATION 29 4.1 Conclusion 29 4.2 Policy Recommendations 30 4.2.1 Review the poor household list 30 4.2.2 Help farmers improve their farming skills, increase investment on their farms and diversify their income source 30 4.2.3 Create job opportunities 31 4.2.4 Prevent people from taking on high interest debt 32 Limitation of this research 32 REFERENCES 33 APPENDICES 36 vi ABBREVIATIONS AusAID Australian Agency for International Development GSO General Statistics Office PCA Principle Components Analysis SES Socio- economic status VASS Vietnam Academy of Social Science VBSP Vietnam Bank of Social Policy VND Vietnam Dong vii LIST OF TABLES Table 3.1: Housing character by ethnic group 14 Table 3.2: Housing character by ethnic group 14 Table 3.3: Percentage of respondents not have listed durable goods by ethnic group 15 Table 3.4: Frequency of having meat per week by ethnic group (respondents,%) 16 Table 3.5 : Frequency of having fish per week by ethnic group (respondents,%) 16 Table 3.6: Access to sanitation facility by ethnic group ( respondents, %) 17 Table 3.7: Indicators use to build PCA score 17 Table 3.8: PCA score by ethnic group 18 Table 3.9: Occupation of poor householders by ethnic (respondents) 19 Table 3.10: Education of poor wage labor 20 Table 3.11: Main crop of poor farmers (respondents) 20 LIST OF FIGURES Figure 1.1: Poverty proportion from 1993-2010 Figure 3.1: Poverty rate in Loc Thanh Village 10 Figure 3.2: Poverty rate of Kinh versus local tribes 12 Figure 3.3: Distribution of PCA score 18 LIST OF BOXES Box 3.1: Out of the poor list 11 Box 3.2: Getting old, becoming poor 22 Box 3.3: Health care and debt 11 CHAPTER 1: INTRODUCTION 1.1 Problem Statement Historically, poverty has always been a major concern of governments Most countries – regardless of location or political regime - consider improving residents’ living conditions as an important objective Hence, reducing the incidence of poverty is the first target of the Millennium Development Goals (MDGs) established by United Nations in 2000 In retrospect, Vietnam has achieved remarkable progress in poverty reduction From 19932008, about 30 million people escaped from poverty (VASS, 2011) This has helped Vietnam accomplish the first goal of the MDGs and the country has been widely applauded by the international community Figure 1.1: Poverty proportion from 1993-2010 70% 60% 58.1% 50% 37.4% 40% 28.9% 30% 18.1% 20% 15.5% 13.4% 14.2% 10% 10.7% 0% 1993 1998 2002 2004 2006 2008 2010 Source: VASS (2011) and GSO (2010) The percentage of the population living in poverty decreased quickly from 58.1 percent in 1993 to 18.1 percent in 2004, dropping by 3.6 percent every year Broad-based economic growth was the main cause of improvements in living standards “In turn, rapid and propoor growth is explained by a series of far reaching market reforms undertaken in the 1990s and the early 2000s” (VASS, 2006, p.15) From 2004-2010, the proportion declined slightly about 0.7 percent every year, from 18.1 percent to 10.7 percent In 2010, the number climbed up to 14.2 percent if the poverty line 37 Appendix 3: Occupation by economic status (respondent) Row Labels non-poor poor Grand Total Farm-self 25 Farm-wage 11 36 40 40 Non-farm-salary 2 Non-farm-self Non-farm-wage Not working 10 Regular tapping rubber worker Grand Total 37 63 100 Source: Survey 2012 Appendix 4: Farm-size of poor household by occupation (respondent) Row Labels 0-1 1-2 2-3 3-4 4-5 5-6 Grand Total Bricklayer Farm-self 3 11 1 11 Farm-wage 15 28 Grocery store 2 not working 9 Grand Total 25 40 14 40 Source: Survey 2012 63 38 Appendix 5: Revenue by crop (VND) Cashew Mean Standard Error Median Mode Standard Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count Pepper Rubber 23,037,037.0 502,857,142.8 2205373.739 114,428,482.2 20000000 480000000 20000000 #N/A 13232242.44 302749306.9 1.75092E+14 9.16571E+16 0.83111308 -0.873349046 1.162149645 0.310767972 54000000 840000000 6000000 120000000 60000000 960000000 829333333.3 3520000000 36 Source: Survey 2012 140,186,536 26,325,261.2 108,000,000 270,000,000 98500108.3 9.70227E+15 -1.636328522 0.380194931 247320000 22680000 270000000 1962611507 14 *Cashew and pepper is harvested one per year *Rubber is harvest every day in month in a year Appendix 6: Compare investment and revenue from cashew farm Revenue per per year Mean Standard Fertilizer per year Pesticide per year Poor Non-Poor Poor Non-Poor Poor Non- 14,911,764.70 30,307,017.54 0.4 1.47 0.4 2.05 5,154,595.32 14,096,039.97 0.57 0.96 0.76 1.12 Deviation Source: survey 2012 39 Appendix 7: Descriptive statistic of Square of land by ethnic Kinh Khmer S’Tieng Mean 1.82 2.78 0.93 Standard Error 0.46 0.58 0.31 Median 1.65 0.4 Mode 0 Standard Deviation 2.79 3.19 1.81 Sample Variance 7.81 10.2 3.27 Kurtosis 19.42 2.60 8.34 Skewness 3.98 1.54 2.91 Range 16 13 Minimum 0 Maximum 16 13 65.7 83.5 31.7 36 30 34 Sum Count Source: Survey 2012 Appendix 8: Square of land by ethnic Row Labels 0-1 1-2 2-3 3-4 4-5 5-6 6-7 8-9 10-11 13-14 15-16 Grand Total Kinh Khmer S’Tieng 14 12 24 7 2 0 1 0 1 0 1 0 36 30 34 Source: Survey 2012 Unit: Grand Total 50 17 12 5 1 1 100 40 Appendix 9: Descriptive statistic of education by ethnic Kinh Khmer S’Tieng Mean 6.89 1.4 0.74 Standard Error 0.62 0.51 0.30 Median 0 Mode 12 0 Deviation 3.69 2.79 1.76 Sample Variance 13.64 7.77 3.11 Kurtosis -1.05 6.31 5.22 Skewness -0.09 2.37 2.44 Range 12 12 Minimum 0 Maximum 12 12 Sum 248 42 25 Count 36 30 34 Standard Source: Survey 2012 Appendix 10: Occupation of poor heads by ethnic Row Labels Kinh Khmer S’Tieng Grand Total Non-farm wage Farm-self 11 Farm-wage 8 24 40 Non-farm-self Not working Grand Total 14 18 31 63 Source: survey 2012 41 Appendix 11: Characteristic of respondents’ families Mean Standard Error Median Mode Standard Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count Family size Labor Dependent 4.17 0.21 4 2.13 4.53 0.22 0.54 10 11 417 100 2.48 0.15 2 1.47 2.15 0.67 0.77 7 248 100 1.69 0.15 1.54 2.36 2.37 1.20 8 169 100 Appendix 12: Dependency ratio by economic status Row Labels non-poor poor Grand Total 0-1 23 38 61 1-2 12 16 28 2-3 3-4 1 4-5 1 5-6 4 Grand Total 37 63 100 42 Appendix 13: Farm size and crop by economic status Unit: Economic status Mean Standard Deviation Count Farm size Poor 0.83 1.16 63 Non-poor 3.42 3.70 37 Rice Poor 0.26 0.51 63 Non-poor 0.59 0.97 37 Cashew Poor 0.43 0.73 63 Non-poor 0.93 1.25 37 Pepper Poor 0 63 Non-poor 0.14 0.40 37 Rubber Poor 0.13 0.43 63 Non-poor 1.70 2.93 37 Other Poor 0.00 0.03 63 Non-poor 0.00 0.45 37 Source: survey 2012 43 KH O SÁT SINH K H I THÔNG TIN CHUNG V H a ch : S nhà H tên ng T : GIA ÌNH GIA ÌNH Thôn/ p: N m sinh(tu i): i tr l i ph ng v n: Nam/N Dân t c: Th i gian sinh s ng t i xã:………………………… Gia đình có s h nghèo khơng? n nghèo i nghèo Ngh nghi p Ch Thông tin chung (ghi tên t t c con, cháu k c tách h nh ng v n s ng chung nhà): Quan h v i ch h : 1: Ch h 2: V /ch ng 3: Con 4: B /m ru t 5: Cháu n i/ngo i 6: Con dâu/con r 7: Anh/ch /em ru t 8: Khác; ghi rõ:…… Dân t c a: Kinh b: Stiêng c: Kmer d: Khác, ghi rõ:… 1 a b c d 2 a b c d 3 a b c d 4 a b c d 5 a b c d 6 a b c d Mã s thành viên N m sinh (tu i) H Tên Nam N Trình đ h cv n (ghi rõ n u h c; vd: h c cao đ ng, h c l p v.v…) hi n t i 44 - Ai lao đ ng gia đình? N u có l p gia đình, tách h h có giúp đ gia đình v kinh t ho c h tr ni em n h c Gia đình có bà s ng xã, huy n, t nh không? h có giúp đ v m t kinh t ? II THÔNG TIN V GIÁO D C TR EM: N u gia đình có tr em h c (bao g m t t c cháu s ng chung nhà), xin cho bi t: Em h c có đ c mi n, gi m h c phí? Anh ch có ph i vay m n đ chi cho b t c kho n trên? N u có, xin cho bi t anh ch vay đâu/vay ai? N u có tr em đ tu i đ n tr ng (t đén 18 tu i) mà không h c, xin cho bi t lý sao? Hi n em làm gì? III đ it đình? THƠNG TIN V S C KH E: Gia đình có ng i b nh t t m đau hay không? S ng i:……………… Cách u tr ? N i u tr ? Ai chi tr chi phí u tr ? nguy n i nghèo N u có b o hi m y t xin cho bi t lo i hình b o hi m y t : ng CSXH N u có vay m n xin cho bi t vay/m n đâu? hi n tr h t kho n n đó? Kho n n nh h Chi phí u tr , khám b nh có nh h ng đ n kinh t c a gia đình? Gia đình có ng i b tai n n, m t s c lao đ ng, qua đ i hay không? c n nghèo ng nh th đ n gia 45 IV THÔNG TIN V TÀI S N SINH HO T: V t li u ng n cách gi a phòng? ng g ch i c, nilon a, g Lo i v t li u c a n n nhà? t sét/đ t ch lát Lo i v t li u c a t ng bao ngồi? ng xây t c/nilon Lo i v t li u c a mái nhà? /Tre Ngu n n c sinh ho t đâu? c m a/Sơng, su i,h , ao ng công c ng ng riêng c máy Lo i nhà v sinh? ng t m nhà sinh Ngu n th p sáng chính? nl i n chia (câu nh , xài chung v i nhà khác) u, d u l a, n n Nhiên li u n u n gì? n u i/Than Thi t b gia đình (ghi s l ng, n u khơng có ghi 0): Xe máy, Xe đ p, i n tho i di đ ng, Qu t máy Tivi Máy vi tính T l nh Máy gi t Máy l nh Ph n nhà có đeo Trang s c: n t vàng n … u đ c đ a 46 V CHI TIÊU: Chi th c ph m: Bao lâu gia đình mua th c ph m l n? Ông bà th ng mua th c ph m đâu? n nhà i bán hàng rong tr ng tr t, ch n nuôi ho c đánh b t Khi mua th c ph m, ng i bán có cho mua ch u (tr sau)? u có m i tr l n? L n mua th c ph m g n nh t nào? Mua nh ng gì? H t ti n:………… Xin cho bi t tu n v a qua, gia đình n nh ng th c n sau đây? Lo i th c ph m S l n Ghi Lo i th c ph m n/tu n Th t heo S a 2 Th t gà/v t Tr ng Cá Trái Rau, c N R u, bia 10 Khác, ghi rõ:… S l n n/tu n Ghi c ng t Chi sinh ho t: Lo i chi phí Ti n n Ti n gas X ng i n tho i S ti n/tháng Có đ c h tr t nhà n c L n nh n h tr g n nh t lúc Bao nhiêu ti n 47 Chi qu n áo: may ch ti m may Qu n áo ơng bà có đ c t đâu? L n mua/may qu n áo g n nh t cách m y tháng? Mua m y b đ ? H t ti n? Chi phí ni tr d i tu i: Gia đình có hay mua s a cho tr em u ng? N u có mua s a gì? .bao lâu mua l n? .M t l n mua h t ti n? Chi phí khác: - Ơng bà có hay đ c m i d đám c i/ gi ch p t hàng xóm/ h sok, p, xã? - Tháng nhi u nh t đ c ng i m i? tháng nh t đ c ng i m i? - Chi phí bình qn tham gia: đám c i………………… ; Ma chay, đam gi :……………………………………………… VI a b c d e f g THU NH P: t ng s lao đ ng h :……………… i v i ng i làm công nh t: Tháng làm vi c nhi u nh t vào tháng m y,……… làm ngày? Tháng làm vi c nh t vào tháng m y…………… làm ngày? N i xa nh t ông/bà t ng làm? ti n l ng có cao h n làm xã? Cơng vi c có l ng cao nh t ơng bà t ng làm? ơng/ bà khơng làm vi c n a Ơng/bà có ý đ nh tìm vi u có vi c gì? đâu? Ơng/bà có làm l y cơng (đ i đ i công? Ph i đáp ng u ki n đ có vi c làm? Ơng/bà làm đ tìm đ c ho c tìm ki m công vi c khác? (li t kê t t c hành đ ng phù h p) c h i/mùa v b n bè, ng i thân môi gi i vi c làm 48 a b c d i v i ng i buôn bán, d ch v : M t ngày bán đ c đ n v hàng (vd: kg th t, chai n Doanh thu m t ngày? S n xu t nông nghi p: Di n tích đ t canh tác: (ghi vào ô doanh thu n u đ nhà n) Lo i Di n T ng s N ng su t Doanh thu v tr ng tích cây/n c v ar i Lúa i u Cao su Tiêu Khác,…… Ngu n g c đ t t thuê/m n khai phá c cho/th a k c c p b i Nhà n c, Xin ơng/bà cho bi t có h ng d n k thu t tr ng tr t, bón phân, x t thu c? N u có, xin cho bi t qui trình k thu t đ c h ng d n: n nông i nơng dân i lý phân bón Ơng/bà có đ c thông tin giá c th tr ng t đâu? ng i thu mua nơng s n hàng/hàng xóm/nơng dân khác Ch n ni: S l ng M c đích ch n ni Bị Heo Gà,v t N u không ch n nuôi xin cho bi t lý sao? n giá c?) S l n bón phân/n m S l nxt làm c /n m i S l ng bán Khác:…… S l S l nxt thu c BVTV/n m Dê Khác,…… ng M c đích ch n ni n giá S l ng bán 49 V THAY I V M T KINH T Gia đình có t ng tr i qua khó kh n kinh t tr m tr ng ch a? i thân b nh n ng/tai n n, ph i nh p vi n t lao đ ng nhà t b i , i buôn l v n ng v t nuôi b nh, ch t hàng lo t n n nhi u không tr n i Khác: N u ông/bà tr i nghi m khó kh n tài tr m tr ng, ơng/bà làm đ v t qua khó kh n tài này? (li t kê t t c câu tr l i ) Bán v t nuôi Bán đ t Cho thuê đ t Làm công tr n Bán l ng th c d tr Bán tài s n khác, ghi rõ: Vay m n Khác (ch rõ): …………………………………………………………………… VI TÍN D NG: Gia đình có đ ti n đ chi tiêu? N u ông bà vay/m n, m c n xin cho bi t: Ngu n vay: S ti n Lãi su t H hàng/B n bè/hàng xóm Ng i bán hàng/quán g n nhà Th ng lái thu mua nông s n i lý bán phân/thu c b o v TV (mua tr ch m) Ng i s d ng lao đ ng Ng i cho vay ti n Ngân hàng CSXH H i Ph n Khác, ghi rõ:…………… Ơng/ bà làm đ tr n : làm công tr n b ng hi n v t, ghi rõ: bán đ t Tình tr ng Tr n bán tài s n vay ng M c đích kho n vay i khác đ tr n Ghi 50 VII QUAN H XÃ H I: Ơng bà có tham gia đồn/h i thơn/xã: i nơng dân i ph n n/nhóm h i N u có, xin cho bi t l i ích tham gia đoàn h i (ví d đ c h tr v v n, t p hu n k thu t, cung c p thông tin…) Ơng bà có th ng xun tham gia cu c h p thôn/ S l n tham d /n m:……… ……S l n v ng m t? Lý do:…….…… N i dung c a cu c h p g n nh t? Ơng bà có th k tên h nghèo p:……………………………………………………… Ơng bà có th k tên h giàu có p:…………………………………………………… VIII TI P C N CHÍNH SÁCH Ơng bà có bi t hi n t i đ a ph ng có ch ng trình h tr ng i nghèo? Hi n ơng/bà có đ c h tr t nhà n c? Ơng/bà ngh v ch ng trình đó? Ông / bà có bi t v tiêu chu n đ c c p s h nghèo:………………… .…………………… Thơng tin có đ c t đâu:……………………………………………… .…………………… Ơng/ bà có tham gia bình xét h nghèo hàng n m: ……………………………………………………………… Lý không tham gia: ……………………………………………………… ……………… Ông bà mong mu n đ c nh n s tr giúp t quy n h i đoàn th ?… ……………………… 51 ... Instead, the author has carried out a case study of one village, Loc Thanh Village, to explore the dynamics of poverty This border village has similar characteristics to other locations in Binh... secondary data as well as provide a general view of poverty in the research location Similar indicators of SES are applied to identify poor households at the local level 2.2 Causes of poverty According... The three main crops of Binh Phuoc are cashew, rubber and pepper, and all are cultivated in this village Thus the location was viewed as a suitable place to study the causes of poverty and households