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Income Diversification and Poverty Income Diversification and Poverty

Income Diversification and Poverty Income Diversification and Poverty

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Chapter 2. Background on the Northern Upl<strong>and</strong>s region<br />

Table 2-6. GDP per capita <strong>and</strong> estimated poverty<br />

GDP per capita<br />

Annual growth<br />

rate in GDP per<br />

capita<br />

Estimated<br />

incidence of<br />

poverty<br />

1995 2000 1995-2000 1999<br />

(1000 1994 VND/person) (percent) (percent)<br />

Ha Giang 945 1,374 8% 77%<br />

Cao Bang 1,202 2,171 13% 74%<br />

Lao Cai 1,366 1,556 3% 75%<br />

Bac Kan 1,068 1,461 6% 68%<br />

Lang Son 1,645 2,436 8% 72%<br />

Tuyen Quang 1,379 1,957 7% 63%<br />

Yen Bai 1,382 1,938 7% 64%<br />

Thai Nguyen 1,662 1,984 4% 49%<br />

Phu Tho 1,533 2,184 7% 48%<br />

Bac Giang 1,326 1,771 6% 49%<br />

Quang Ninh 2,439 3,708 9% 52%<br />

Lai Chau 1,440 1,614 2% 86%<br />

Son La 884 1,369 9% 79%<br />

Hoa Binh 1,255 2,033 10% 65%<br />

Northern Upl<strong>and</strong>s 1,446 2,030 7.0% 60%<br />

Source: GDP figures from GSO (2001).<br />

<strong>Poverty</strong> estimates from Minot <strong>and</strong> Baulch (2002).<br />

2.2.5 <strong>Income</strong> diversification<br />

Three measures of income diversification can be calculated from the GSO data. The first<br />

measure of diversification is the share of GDP generated outside the agricultural sector (defined<br />

broadly to include crops, livestock, fishing, <strong>and</strong> forestry). Overall, the non-agricultural share of GDP<br />

has increased from 53 to 58 percent. The increase is largest for Cao Bang (17 percentage point<br />

increase), Ha Giang (15 percentage points), Lang Son (12 percentage points) <strong>and</strong> Son La (11<br />

percentage points). The increase is quite small in Quang Ninh (from 89 to 91 percent), partly<br />

because the non-agricultural sector is already so dominant. And in Bac Giang <strong>and</strong> Thai Nguyen, the<br />

share of non-agricultural sector actually declined slightly. These are the only provinces that experienced<br />

this type of change (see Table 2-7 <strong>and</strong> Figure 2-7). Figure 2-8 plots the changes in the contribution of<br />

agriculture to GDP against changes in GDP per capita. Provinces with higher income tend to have a<br />

smaller agricultural component, but almost all provinces show both economic growth <strong>and</strong> declining<br />

share of agriculture. This process is known as the structural transformation of the economy.<br />

The second measure is the share of cultivated l<strong>and</strong> in crops other than rice. Overall, the share<br />

of non-rice crops has increased from 50 percent in 1995 to 56 percent in 2000. As mentioned earlier,<br />

the share of non-rice crops exp<strong>and</strong>ed in every province except one (Bac Giang), with the largest shifts<br />

occurring in Bac Kan, Lang Son <strong>and</strong> Son La (see Table 2-7).<br />

Page 32

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