Although economic reform has broughtremarkable progress in poverty reduction in Vietnam, thescale and depth of ethnic minority poverty in Vietnampresents one of the major challenges to achieving thetargets for poverty reduction set out in the Socio-EconomicDevelopment Plan, as well as the millennium developmentgoals. The authors first review a series of monetary andnon-monetary indicators which show the living standards ofthe ethnic minorities are improving but still lag seriouslybehind those of the majority Kinh-Hoa. The minorities'lower living standards result from the complex interplay ofoverlapping disadvantages, which start in utero and continueuntil adult life. Next an analysis of the drivers of theethnic gap, in terms of both differences in characteristicsand differences in returns to those characteristics, isundertaken. Mean and quantile decompositions show that atleast a half of the gap in per capita expenditure can beattributed to the lower returns to characteristics that theethnic minorities receive. The reasons underlying suchdifferences in returns are discussed, drawing on bothquantitative analysis and the large number of qualitativestudies on ethnic issues in Vietnam. Finally, some of theshort and longer term policy measures which the authorsbelieve could help to counter ethnic disadvantages in thenutrition, education, and employment sectors are discussed.The authors also emphasize the importance of promotinggrowth that is geographically broad and socially inclusivewithout which, the current disparities between the Kinh-Hoaand the ethnic minorities will continue to grow.
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