Determinants of households in come in planned areas, a case of my phuoc down toawn ben cat binh duong

VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS DETERMINANTS OF HOUSEHOLDS' INCOME IN PLANNED AREAS: A CASE OF MY PHUOC DOWNTOWN- BEN CAT DISTRICT- BINH DUONG A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By THAI THANH PHONG , so G1i0ovc 1:~Xo ·~o - ·-1 TRIJONG f),~, HQC KINH TE TP.HCM TIIV YVII1.r\T ) 1-i1 I HO CHI MINH CITY, OCTOBER 2009 I I VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS DETERMINANTS OF HOUSEHOLDS' INCOME IN PLANNED AREAS: A CASE OF MY PHUOC DOWNTOWN- BEN CAT DISTRICT- BINH DUONG A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS Academic Supervisor: DR HA THUC VIEN Student: THAI THANH PHONG HO CHI MINH CITY, OCTOBER 2009 Acknowledgements In the first of all, my heartfelt thank goes to my supervisor, Dr Ha Thuc Vien His comments and suggestions on my term paper for Rural Development course helped me to form my research topic During the course of my thesis research and writing, I have received numerously his kind supervision, guidance, useful comments and encouragements My deepest thanks also go to Associate Professor Dr Nguyen Trong Hoai, Co- Director of Vietnam - The Netherlands Programme for M.A in Development Economics, who has always given me his encouragements and kindly during the course of my study and thesis research My thanks also go to my kindly and enthusiastic classmate, Mr Nguyen Ngoc Danh, who is always ready to instruct me while I am processing and analyzing to my data with STATA My thesis was made possible with co-operation and supports of local people in of My Phuoc downtown who kindly provided me useful information and ideas related to my research I am grateful to My Phuoc downtown and Ben Cat district People's Committee, especially to Mrs Thuy who gave me many information which included important data; Mr Tuan in ward 2, Mr Chau in Ward 3, Ms Hoa in ward who took and introduced me with local people during time conducting my fieldwork I would also like to present many thanks to my cousin and my friends, who helped me to approach project documents of My Phuoc IPs I am grateful to my manager in Binh Duong Telecommunication, Mrs Huong, who created advantage condition in job let I had time to survey during two month My heartfelt gratitude also goes to my wife, Ha and two girls, Nha and Thanh, who are my love and motivation during the studying time Determinants ofHouseholds' Income in Planned Areas DECLARATION I declare that "Determinants of Households' Income in Planned Areas: A Case of My Phuoc Downtown - Ben Cat District - Binh Duong Province" is my own work, that it has not been submitted to any degree or examination at any other universities, and that all the sources used or quoted are indicated and acknowledged by complete references HCMC, October 2009 THAI THANH PHONG MDE- Class 13 11 Determinants of Households' Income in Planned Areas Abstract This study aims to investigate the impacts of land recovery for industrial and urban development on displaced people's livelihoods those who are living in industrial and urban planed areas in Binh Duong Province through a case study of My Phuoc Downtown A main approach of this study is based Sustainable Livelihood Framework developed by DFID (2001) A combination of qualitative and quantitative methods was employed throughout the research process, from the early stage to the data analysis stage to describe livelihood patterns of surveyed households before and after displacement and to analyze statistically factors affecting their income More specifically, econometrics models were applied to estimate the role of livelihood assets on livelihood outcome of displaced households Quantitatively, linear regression model was applied to estimate the impacts of household livelihood assets, compensation (both in kind and in cash) on household income The estimation results show that there is positive impact of livelihood assets on livelihood outcome (total household income) before the displacement at a 1% significant level (wage and saving) and at a 5% significant level (farmland and residential land) After resettlement, estimating results of simultaneous equations model with three-stage least-squares estimation method inform that compensated money, compensated residential land and accessed credit volume has positively determined the total investment for livelihood rehabilitation at 1% significant level In addition, a number of resettled housing land transfer times are positive effect (significantly at a 5% level) to household's total livelihood investment Together with investment for livelihood rehabilitation, total expenditure on children education after resettlement also has positive impact with total household's income after resettlement at a 5% significant level Proxy indicators of livelihood assets are positively and significantly related with total income after resettlement such as: education of household head (at a 5% level), a number of working member in household (at a 1% level); a number of cell phone in a household (at a 1% level); a number of meeting time per year (at a 1% level) and financial savings and livestock value before the displacement (at a 5% level) Moreover, the study found that, most displaced households not receive any priority in vocation trainings, credit for alternative livelihood development and tax MDE- Class 13 lll Determinants of Households' Income in Planned Areas exemplification programs from local government and urban development project investors although displaced people are often promised by authorities and investors at the beginning ofthe project initiation Keywords: Livelihood, industrialization, land recovery, compensation, resettlement MDE- Class 13 IV Determinants ofHouseholds' Income in Planned Areas Contents Acknowledgements Abstract Contents List of Tables List of Figures Chapter Introduction 1.1 Problem statement 1.2 1.3 1.4 Objectives ofthe study Research questions Outline of the thesis Chapter II Literature Review 2.1 Definitions and terminologies 2.1.1 2.2 Empirical studies of land recovery, resettlement and its impacts on displaced farm households' livelihoods Chapter III Research Methodology 3.1 Analytical framework of the study 3.2 Econometric framework ofthe study 3.3 Variables definition 3.4 Data collection and analysis 3.3 3.3 3.3 3.3.4 Chapter IV MDE- Class 13 Description of Study Area v Determinants of Households' Income in Planned Areas 4.1 Industrialization progress ofBinh Duon 4.2 Background of study site (My Phuoc 4.3 Regulations of Vietnam on land recovery and resettlement 4.4 Regulations of land recovery and resett Park project 4.5 The implementation of policies of land Phuoc downtown Chapter V 5.Displaced Households' Livelihoods 5.1 Household's livelihood patterns 5.1.1 5.1.2 5.1.3 5.2 Compensation and compensation using 5.2.1 5.2.2 5.3 Livelihood Assets 5.3.1 5.3.2 5.3.3 5.3.4 5.3.5 5.4 Households' expenses 5.5 Household's income 5.5.1 Income sources and income calculation 5.5.2 5.6 Results ofthe econometric analysis 5.6.1 5.6.2 Chapter VI Conclusions 6.1 6.2 Conclusion and recommendations Research limitation References Appendices Appendix A: Variables definition Appendix B: Aggregated income model before the planning (Year 2000) Appendix C: Aggregated Income Model after the Resettlement (Year 2008) Appendix D: Questionnaires MDE- Class 13 Vl Determinants of Households' Income in Planned Areas List of Tables Table 3-1 : Variable definition 17 Table 4-1: Summary of compensation following regulations 25 Table 4-2: Summary of compensation in My Phuoc Industrial Park 27 Table 4-3: Policies of compensation and resettlement 31 Table 5-l: Patterns of Livelihood before the Planning 32 Table 5-2: Patterns oflivelihood activity combination before the planning 33 Table 5-3: Patterns of household's livelihood activities after land recovery and resettlement 36 Table 5-4: Number kinds oflivelihood after displacement and resettlement 37 Table 5-5: Current patterns of households' livelihoods 39 Table 5-6: Current patterns of household livelihood activity combination 40 Table 5-7: Vary in cash compensation among households .42 Table 5-8: Classification of household's cash compensation 42 Table 5-9: Vary in household's land compensation 43 Table 5-l 0: Classification of household's land compensation by area 43 Table 5-11: Cash compensation expenses 44 Table 5-12: Detail of property investment from cash compensation .45 Table 5-13: Household's investment in education 46 Table 5-14: Using compensated/resettled residential land 47 Table 5-15: A number oftimes to transfer compensated land 47 Table 5-16: Reasons of sale compensated/resettled residentialland 48 Table 5-17: Other income sources of displaced household 48 Table 5-18: Balance of compensation expenses 49 Table 5-19: Detail of household finance deficit 49 Table 5-20: Finance sources to cover deficit 49 Table 5-21: Surplus of compensation after expenses 50 Table 5-22: Land area of observed households before the planning and at the present 51 Table 5-23: Classification of household's house types before the planning 53 Table 5-24: Public service access by households before the planning 53 Table 5-25: Price of one kilowatt of electrical power 54 Table 5-26: Types of constructed house at the present 54 Table 5-27: Area of house before the planning/at the present 54 Table 5-28: Average distance to public service systems 54 Table 5-29: Saving and livestock value of household before the planning/at the present 55 Table 5-30: Household's loan access before the planning/at the present 55 Table 5-31: Household's loan sources before the planning/at the present 55 Table 5-32: Loan using before the planning 56 Table 5-33: Loan using at the present 56 Table 5-34: Friendly level of neighbours 57 Table 5-35: Security condition level 57 Table 5-36: Social environment before the planning/at the present 57 Table 5-37: Organizations/Associations before the planning/at the present 58 Table 5-38: Member of social organizations before the planning/at the present 58 Table 5-39: Age of household head in the sample at the present 59 MDE- Class 13 Vll Determinants of Households' Income in Planned Areas Table 5-40: Classification of average age of household members at the present 59 Table 5-41: Household size 59 Table 5-42: Average education of household members at the present 59 Table 5-43: Education in observed households at the present 60 Table 5-44: Composition of household at the present 60 Table 5-45: Annual expenses of households before the planning/at the present 61 Table 5-46: Detail of annual expense before the planning/at the present 61 Table 5-47: Comparison of household annual expenses 61 Table 5-48: Income sources of surveyed households 63 Table 5-49: Annual farm-based income before the planning/after displacement/at the present 64 Table 5-50: Household aggregated income 65 Table 5-51: Trends in proportion of farm-based income 65 Table 5-52: Household's non-farm income before the planning/after resettlement /at the present 66 Table 5-53: Descriptive statistics of proxy variables before the planning 68 Table 5-54: Regression results of econometric model before the planning 68 Table 5-55: Descriptive statistics ofproxier variables after resettlement 70 Table 5-56: Regression results of econometric model after resettlement 71 List of Figures Figure 3-1: Conceptual framework for the empirical study 12 Figure 4-1: Administrative map of Ben Cat district 23 Figure 4-2: Location map of My Phuoc downtown 23 Figure 4-3: Double market (Chq Doi) 28 Figure 4-4: Silent professional school in My Phuoc IP 29 Figure 5-1: Resettled house border with the cattle cage of Uncle Pham Van Hai .34 Figure 5-2: Cattle freely on non-using resettled land 34 Figure 5-3: Recruitment information pasted on the gate of a company 35 Figure 5-4: Villa of Mr Pham Van Tru with motorbike mend panel in the front 38 Figure 5-5: Internet Shop of a displaced household 38 Figure 5-6: Chain of rooms for lease of a resettled household 40 Figure 5-7: Old lady Nguyen Thi An keeping a herd ofcattle .41 Figure 5-8: Chart of compensation expenses 45 Figure 5-9: New house of the most successful displaced household 50 Figure 5-10: Average education of household members at the present 60 Figure 5-11: Trends in household income sources 64 Figure 5-12: Trends in average annual income ofhousehold 67 MDE- Class 13 V111 CHiNH SACH DEN BU VA VI:¢C sir DVNG TIEN DEN BU GIAI TOA CUA HQ GIA DiNH (COMPENSATION POLICIES AND COMPENSATION USING OF DISPLACED HOUSEHOLDS) Ql TBng sB ti~n d~n bu I hB trQ' Anh I Chi da nh~n drrQ'c ? (Total cash compensation?) TT TONG SO TIEN NH!N DEN BU (TOTAL COMPENSATION): TiSn dSn bu d~t nong nghi~p (Farmland compensation) TiSn dSn bu d~t th6 cu (Residential land compensation) TiSn dSn bu tai san tren d~t (Assets on land compensation) o Nh~ dSn bu trvc tiSp (Received directly) o Duqc chia phfin tir ngucri than (Shared from realtive) TT Trg d.p 6n dinh dc':Yi s6ng (Di~u 25, Ml}.c ND22/1998/ND- CP) (Subsidy for stable living) Ti~n h6 trg gia dinh chinh sach (Subsidy for policy family) Ti~n h6 trg di dc':Yi (Subsidy for moving) Trg d.p cac h9 san xufrt kinh doanh (Subsidy for business) Ti~n h6 trg tim vi~c lam thai gian giai toa (16- 60 tu6i) (Subsidy for finding job: 16 - 60 years old) Chi phi dao t GIA DINH (COMPENSATION POLICIES AND COMPENSATION USING OF DISPLACED HOUSEHOLDS) Q2 Cac Anh I Chi da sfr dung ti~n d~n bu cho vi~c gi ? (What did your compensation spend for ?) No Gia tri aaMfic thOi gian sfr dl}ng N()i dung chi tieu, mua s~m (Detail of expenses) T:;to d\ffig ch6 a mai (mua d~t I xay nha) (Build resettled house) Chia cho ngw)'i than gia dinh (anh em I chau, )(Share for relatives) Cho ngum than mw;m I vay (Relatives borrowed) Tra nq (Paid in debt) Xay d\ffig nha trQ I kios cho thue (Build room/kiosk for lease) 6(Invest toD~u tu giao dvc cho I chau (hQc van h6a, hQc ngh~, ) education/vocational for relative) Mua d~t nong nghi~p d€ canh tac (Buy farmland) Mua nha I d~t d€ kinh doanh (Real estate business) Kinh doanh buon ban (t:;tp h6a, quan ca phe, ) (Open retail shop) Kinh doanh ngh~ I dich Vl,l (internet, di~n tho:;ti cong c()ng, dt I u6n t6c, ) 10 (Internet shop, telephone service shop, hair curl/cut, ) 11 Mua sfun v~t dl,lllg gia dinh (Tivi, tu l:;tnh, may l:;tnh, salon, ) (Purchase funiture) 12 Mua sfun phuong ti~n di l:;ti (xe may, to, ) (Buy vehicle: motorbike, car, ) Mua sfun phuong ti~n san xu~t (may cay, may keo, xe t