Untitled - Oxfam Blogs

Impacts of Price Hikes
on the Life and Livelihoods
of the Urban Poor
Figure 4.3: Monthly expenditure structure of migrant workers
Hai Phong
Go Vap - HCMC
Remittance to
home
16%
Self-savings
12%
Private
purchase
5%
Contributiions
to weddings/
funerals
9%
Others
7%
House rental
7%
Recreation/
refreshment
5%
Food & Drink
27%
Clothes
6%
Travel
6%
Remittance to
home
12%
Self-savings
11%
Private
purchase
2%
Contributiions
to weddings/
funerals
6% Recreation/
refreshment
1%
Others
7%
Travel
5%
Clothes
4%
House rental
17%
Food & Drink
35%
Source: Questionnaire survey of 120 migrant workers in Hai Phong and Go Vap - HCMC (june-July 2008)
Selling/Buying Practices. Selling and buying transactions in the urban areas are commonly of the cashon-delivery
nature. In very few cases where they have close relationship with the agents the poor households
can buy things on credit or the agents can get a small loans from the wholesaler (for example, they can buy
five kg of rice and pay when they next make a purchase).
The habit of stockpiling things no longer exists (it was very common in the northern cities before the
introduction of the “doi moi” policy). Although urban residents did stockpile rice during the two-day “virtual
hike” of prices in April 2008 because of rumors of shortages. However the hike did not last long thanks clear
to communication by the authorities and prompt arrangements for sufficient rice supply for the big cities.
4.3 Impacts of Price Hikes on the Lives and Livelihoods of the Urban Poor
As incomes and social assistance are not rising in line with the prices of foods and services most urban poor
and near-poor are in a very difficult situation due to their reduced purchasing power (except for certain
suburban areas where crop farming is still possible and the farmers can manage to partly or fully meet their
own demand for food).
4.3.1 Impact on the permanently registered urban poor
The permanently registered poor (and near-poor) is facing a great challenge as a result of the ‘price storm’.
In particular, pensioners and social assistance recipients are struggling as prices of food and other essential
products are rising. Although the Government has applied a 20 percent increase in pension payments since
the beginning of 2008, it is considered too little to offset the increase in the cost of living in urban areas
over the last two years. Those who have resigned from the Government employment with a severance
package and are not entitled to pension payments also suffer since they do not have any alternative sources
of income. They rely on support of their children or work irregular poorly paid jobs.
“Our pension payment as of end of 2007 was 700,000 VND/month for the two of us, an old
couple. We had managed to survive the year before. At the end of 2007 when the
Government announced a salary increase everything suddenly became so expensive, from
food to rice and fuels. In January 2008, we received a 20 percent increase in our pension
payment to 840,000 VND/month. We were able to pay for rice, gas, fish sauce, salt and some
extra meat. However, as of April, 20 kg of rice cost 300,000 VND. We had only 540,000
VND left to pay for everything else including electricity, gas, medications, fish sauce and salt.
Our food intake has been cut to only vegetables and small fish now. Prices keep rising while
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