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4. Impacts of Price Hikes on
the Life and Livelihoods of
the Urban Poor
4.1 Price Hikes at Urban Study Sites
At the two urban study sites of Hai Phong city and H Chí Minh city where people are net food purchasers,
between June 2007 and June 2008, the price of regular rice has increased by 80-100 percent, pork (pork
rear) by 50 percent while the cost of simple labour has gone up by 50-60 percent and social assistance and
wages paid to workers by the private enterprises only by more or less 20 percent (which is equal to the 20
percent top up of the medium salary level offered by State-owned enterprises according to a Government
policy from 450,000 VND/month effective as of October 2006 to 540,000 VND/month effective as of
January 2008) (Figure 4.1)
Figure 4.1: Rate of price increase in Hai Phong and HCMC, June 2007 - June 2008
%
120
100
80
60
40
20
0
Rice Pork Fish Sauce Fuel Clothes Waged
labor
Worker
salary
Inner-city (Hai Phong) Suburb (Hai Phong) Go Vap dist (HCMC)
Source: Retail prices provided by agents and local people (June 2008)
The “double-edged” prices have caused a reduction of the purchasing power of the poor regarding food
and other essential products. As exhibited in Figure 4.2, when converting the value of a person-day and
average monthly income of a local or migrant household into rice or pork rear terms, it is evident that the
“double-edged” prices have adversely affected the relative purchasing power between a year ago and now.
(Except for Hai Phong where the purchasing power in pork rump terms has increased slightly. However the
purchasing power converted into pork side terms has actually declined by 20 percent as pork of lower
quality grades has become more expensive than pork of higher quality grades).
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