Globalriskinsights.com – A joint report issued earlier this month by the Vietnam General Statistics Office and the World Bank has drawn attention to a growing wealth gap in the Southeast Asian nation. The gap is both economic and geographical, with the majority of the rural community growing increasingly poor in contrast to a wealthier urban populace. If the government does not respond to this growing disparity, political instability could be on the horizon in Vietnam.

The Vietnamese economy has achieved impressive growth in the last two decades, undeniably benefitting large areas of the population with some 30 million people being lifted out of poverty. Today the poverty rate stands at 7.8 percent compared with nearly 58 percent in 1993. This growth, however, has to a certain extent masked the fact that a proportion of the population are being left behind – namely the rural poor and ethnic minorities.

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East Asia Needs A New Growth Formula

The export-dependent development model that fueled Asia’s economic rise is nearing its end.

The East Asian economic model is running out of steam. Demographics and slowing growth in world trade will force Asia’s developing countries to rely more on internal demand instead of the outward-oriented policies that made their neighbors rich. That will mean slower growth and prolonged regional inequality.

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