Vietnam’s party chief warns against growing wealth gap

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Vietnam RR accidentVietnam’s economic divide is widening and poses the most worrying threat to the survival of the political regime, said Communist Party chief Nguyen Phu Trong. Though the problem has been oft-discussed, it remains unaddressed, he noted according to a Thanh Nien report.

“The rich-poor divide… [only] shows signs of getting worse,” Trong said. It was not the first time the country’s top leader has warned against socioeconomic disparity. Trong emphasized the rich-poor gap at another meeting of the central committee last year, saying the gap existed even inside the party.

“Some party members have gotten richer so quickly, leading a lavish life that is miles away from that of the workers,” Trong said.

For more than two decades, Vietnam has notched up rapid and stunning economic growth and there have been warnings against the gap between the rich and the poor. But these concerns have largely been ignored in the euphoria of being the latest Asian economic tiger on the block. The country’s 13 year-low economic growth of 5.03 per cent in 2012 has continued to punish the poor and only exacerbates the gap between the haves and have-nots.

The number of extremely wealthy people in Vietnam has grown by 14.7 per cent this year, the second fastest rate in Southeast Asia after Thailand, according to a recent report released by Singapore company Wealth-X and Swiss bank UBS. The inaugural World Ultra Wealth Report says the number of ultra-high net worth individuals (UHNWIs), defined as those with assets of $30 million and above, has risen to 195 this year and they have a combined wealth of $20 billion.

Other regional countries that saw the number of UHNWIs increase are Singapore, Malaysia, the Philippines, and Indonesia. Thailand is at the top with a year-on-year increase of 15.2 per cent –from 625 last year to 720 now – and Indonesia is third with an increase of 10.2 per cent.

Vietnam joined the lower-middle income bracket in 2009, with per capita income rising to $1,555 last year from $110 two decades earlier, according to the World Bank. But Vietnam’s wealthy were 9.2 times wealthier than the poor in 2011 compared to 8.9 times wealthier in 2008, according to the latest data compiled by the General Statistics Office.

In major cities like Hanoi and Ho Chi Minh City, the gulf is glaringly evident. Major luxury brand boutiques – Marc Jacobs, Cartier, Gucci, Louis Vuitton, or Hermès – preen on the streets before the eyes of construction workers and street vendors who sit at sidewalk eateries, spending less than a dollar on a meal.

In Vietnam’s highlands areas, a majority of the ethnic minority residents are still struggling to eat enough food every day, while a 2014 Rolls-Royce Wraith is set to ply the Vietnamese streets that already teem with all the luxury brands – Bugatti, Ferrari, Lamborghini, Maybach, Rolls-Royce and Bentley – soon as a local resident recently bought it at a cost of around $902,000, Tuoi Tre reported.

Vietnam has prided itself on achieving the first United Nations’ Millennium Development Goal (MDG) on poverty reduction well ahead of the 2015 deadline. MDGs is a set of targets for education, poverty, health and other areas.

The country has lifted some 30 million people out of poverty in the past two decades, the Ministry of Labour, War Invalids, and Social Affairs said in a recent report to the National Assembly, Vietnam’s legislature. The poverty rate fell from nearly 58 per cent of the population in 1993 to 7.8 percent presently.

But while experts tout Vietnam as a success story in alleviating poverty, they have repeatedly urged the country not to rest on its laurels.The World Bank said in a report earlier this year that macroeconomic instability has now left the remaining poor harder to reach. Growth has slowed in recent years due to macro instability and external shocks, inequality is rising, and ethnic minority poverty remains persistently high, it said.

The report said Vietnam’s 53 ethnic minority groups make up less than 15 per cent of the population but they accounted for nearly 50 per cent of the poor in 2010. Most minorities continue to reside in more isolated and less-productive mountainous regions of the country, it said. The rapid economic transformation of the last few decades has left people in rural areas with limited access to high quality education and health services, as well as good jobs.

Analysts say what makes inequality in Vietnam unique is that it is a nominally socialist system, ostensibly committed to creating a classless society. Beyond that obvious point is that what is allowing this gap to increase is that people are able to gain control over public assets, they say.

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Vietnam’s economic divide is widening and poses the most worrying threat to the survival of the political regime, said Communist Party chief Nguyen Phu Trong. Though the problem has been oft-discussed, it remains unaddressed, he noted according to a Thanh Nien report. “The rich-poor divide… [only] shows signs of getting worse,” Trong said. It was not the first time the country’s top leader has warned against socioeconomic disparity. Trong emphasized the rich-poor gap at another meeting of the central committee last year, saying the gap existed even inside the party. “Some party members have gotten richer so quickly, leading a...

Reading Time: 3 minutes

Vietnam RR accidentVietnam’s economic divide is widening and poses the most worrying threat to the survival of the political regime, said Communist Party chief Nguyen Phu Trong. Though the problem has been oft-discussed, it remains unaddressed, he noted according to a Thanh Nien report.

“The rich-poor divide… [only] shows signs of getting worse,” Trong said. It was not the first time the country’s top leader has warned against socioeconomic disparity. Trong emphasized the rich-poor gap at another meeting of the central committee last year, saying the gap existed even inside the party.

“Some party members have gotten richer so quickly, leading a lavish life that is miles away from that of the workers,” Trong said.

For more than two decades, Vietnam has notched up rapid and stunning economic growth and there have been warnings against the gap between the rich and the poor. But these concerns have largely been ignored in the euphoria of being the latest Asian economic tiger on the block. The country’s 13 year-low economic growth of 5.03 per cent in 2012 has continued to punish the poor and only exacerbates the gap between the haves and have-nots.

The number of extremely wealthy people in Vietnam has grown by 14.7 per cent this year, the second fastest rate in Southeast Asia after Thailand, according to a recent report released by Singapore company Wealth-X and Swiss bank UBS. The inaugural World Ultra Wealth Report says the number of ultra-high net worth individuals (UHNWIs), defined as those with assets of $30 million and above, has risen to 195 this year and they have a combined wealth of $20 billion.

Other regional countries that saw the number of UHNWIs increase are Singapore, Malaysia, the Philippines, and Indonesia. Thailand is at the top with a year-on-year increase of 15.2 per cent –from 625 last year to 720 now – and Indonesia is third with an increase of 10.2 per cent.

Vietnam joined the lower-middle income bracket in 2009, with per capita income rising to $1,555 last year from $110 two decades earlier, according to the World Bank. But Vietnam’s wealthy were 9.2 times wealthier than the poor in 2011 compared to 8.9 times wealthier in 2008, according to the latest data compiled by the General Statistics Office.

In major cities like Hanoi and Ho Chi Minh City, the gulf is glaringly evident. Major luxury brand boutiques – Marc Jacobs, Cartier, Gucci, Louis Vuitton, or Hermès – preen on the streets before the eyes of construction workers and street vendors who sit at sidewalk eateries, spending less than a dollar on a meal.

In Vietnam’s highlands areas, a majority of the ethnic minority residents are still struggling to eat enough food every day, while a 2014 Rolls-Royce Wraith is set to ply the Vietnamese streets that already teem with all the luxury brands – Bugatti, Ferrari, Lamborghini, Maybach, Rolls-Royce and Bentley – soon as a local resident recently bought it at a cost of around $902,000, Tuoi Tre reported.

Vietnam has prided itself on achieving the first United Nations’ Millennium Development Goal (MDG) on poverty reduction well ahead of the 2015 deadline. MDGs is a set of targets for education, poverty, health and other areas.

The country has lifted some 30 million people out of poverty in the past two decades, the Ministry of Labour, War Invalids, and Social Affairs said in a recent report to the National Assembly, Vietnam’s legislature. The poverty rate fell from nearly 58 per cent of the population in 1993 to 7.8 percent presently.

But while experts tout Vietnam as a success story in alleviating poverty, they have repeatedly urged the country not to rest on its laurels.The World Bank said in a report earlier this year that macroeconomic instability has now left the remaining poor harder to reach. Growth has slowed in recent years due to macro instability and external shocks, inequality is rising, and ethnic minority poverty remains persistently high, it said.

The report said Vietnam’s 53 ethnic minority groups make up less than 15 per cent of the population but they accounted for nearly 50 per cent of the poor in 2010. Most minorities continue to reside in more isolated and less-productive mountainous regions of the country, it said. The rapid economic transformation of the last few decades has left people in rural areas with limited access to high quality education and health services, as well as good jobs.

Analysts say what makes inequality in Vietnam unique is that it is a nominally socialist system, ostensibly committed to creating a classless society. Beyond that obvious point is that what is allowing this gap to increase is that people are able to gain control over public assets, they say.

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