Progress in Vietnam has been substantialwhen other dimensions of poverty, apart from expenditures,are considered. The broader Vietnam Development Goals(VDGs), which are a localized version of the MillenniumDevelopment Goals, show a consistent improvement of socialindicators, from education enrollment to infant mortality.While some regions and some population groups gained morethan others, Vietnam continues to reduce povertyconsiderably faster than other countries at a similardevelopment level. In the early 1990s, its poverty rate washigher than could be expected, given the country'slevel of economic development. Some time during the secondhalf of the 1990s Vietnam caught up with the"average" country at its development level, and itlargely surpassed it by 2002. The "story" behindthe reduction in poverty has somewhat changed over time.Earlier gains had been associated with the distribution ofagricultural land to rural households, in a context whereeconomic reform provided the right incentives for increasedfarm production. But those gains have been mainly reaped bynow. In more recent years, the driving forces behind povertyreduction are job creation by the private sector and theincreased integration of agriculture in the market economy.A vast majority of the working-age population of Vietnamactually works, and labor market participation rates areamong the highest in the world. What has changed is notactivity, but rather the composition of employment. Over thelast four years, the proportion of people who mainly work ontheir own farm dropped from almost two thirds to slightlyless than half. Instead, many more are now engaged in wageemployment: 30 percent of those at work earned a wage in2002, compared to 19 percent four years earlier. Thanks toits buoyant expansion, by 2002 the formal private sectoralready accounted for around 2.5 million jobs, more than theentire public sector. But a much larger number of jobs havebeen created by the private informal sector.
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