INSTITUTE OF SOCIAL STUDIES THE HAGUE
THE NETHERLANDS
VIETNAM – NETHERLANDS
PROGRAMME FOR M.A. IN DEVELOPMENT ECONOMICS
DETERMINANTS OF HOUSEHOLDS’ INCOME IN PLANNED AREAS: A CASE OF MV PHUOC DOWNTOWN — BEN CAT DISTRICT — BINH DUONG
HO CHI MINH CITY, OCTOBER 2009
Acknowledgements
In the first of all, my heartfelt thank goes to my supervisor, Dr. Ha Thuc Vien. His comments and suggestions on my term paper for Rural Development course helped me to form my research topic. During the course of my thesis research and writing, I have received numerously his kind supervision, guidance, useful comments and encouragements.
I am grateful to My Phuoc downtown and Ben Cat district People’s Committee, especially to Mrs. Thuy who gave me many information which included important data; I am grateful to my manager in Binh Duong Telecommunication, Mrs Huong, who created advantage condition in job let I had time to survey during two month.
Abstract
Urban planed areas in Binh Duong Province through a case study of My Phuoc Downtown. A main approach of this study is based Sustainable Livelihood Framework developed by DFID (2001). From the early stage to the data analysis stage to describe livelihood patterns of surveyed households before and after displacement and to analyze statistically factors affecting their income. More specifically, econometrics models were applied to estimate the role of livelihood assets on livelihood outcome of displaced households.
The estimation results show that there is positive impact of livelihood assets on livelihood outcome (total household income) before the displacement at a 1% significant level (wage and saving) and at a 5% significant level (farmland and residential land).
Contents
Acknowledgements i
Abstract iii
Contents v
List of Tables. vii
List of Figures ..
Chapter I. 1
1. Introduction 1
1.1. Problem statement 1
1.2. Objectives of the study 3
1.3. Research questions 4
1.4. Outline of the thesis. 4
Chapter II. 6
2. Literature Review 6
2. 1 Definitions and terminologies 6
2. 1.1 Land ownership 6
2. 1.2 Land allocation 6
2. 1.3 Land use rights. 6
2. 1.4 Land price 7
2.1.5 Land recovery and resettlement. 7
2.1.6 Livelihoods 8
Chapter III 12
3. Research Methodology. 12
3. 1. Analytical framework of the study 12
3.2. Econometric framewor1‹ of the study 14
3.3. Variables definition 16
3.4. Data collection and analysis 18
3.3. I Selection of study site. 18
3.3.2 Unit of analysis. 19
3.3.3 Data sources and collection techniques ………………,. 19
3.3.4 Data analysis. 20
Chapter IV. 22
4. Description of Study Area. 22
Determinants of Households’ income in PlanneJ Areas
4.1 Industrialization progress of Binh Duong province 22
4.2 Background of study site (My Phuoc downtown) 22
4.3 Regulations of Vietnam on land recovery and resettlement. 24
Chapter V 32
5. Displaced Households’ Livelihoods. 32
5.1 Household’s livelihood patterns 32
5.1.1 Households’ livelihood patterns before land recovery (Year 2000) 32
5.1.2 Patterns of household’s livelihood iight after resettlement 33
5.1.3 Current patterns of households’ livelihood 37
5.2.1 Compensation 41
5.2.2 Compensation using. 44
5.3.1 Natural Capital. 51
5.3.2 Physical capital 52
5.3.3 Financial Capital. 54
5.3.4 Social Capital. 56
5.3.5 Human capital. 58
5.5.2 Trends in household income. 63
5.6.1 Determinants of households’ income before the planning 67
Chapter VI. 73
6. Conclusions. 73
6.1 Conclusion and recommendations. 73
6.2 Research limitation 75
References. 76
Appendices 82
Appendix A: Variables definition. 82
Appendix B: Aggregated income model before the planning (Year 2000) 83
Appendix C: Aggregated Income Model after the Resettlement (Year 2008) 83
Appendix D: Questionnaires. 85
List of Tables
Table 3-1 : Variable definition 17
Table 4-2: Summary of compensation in My Phuoc Industrial Park 27
Table 5-1: Patterns of Livelihood before the Planning. 32
Table 5-2: Patterns of livelihood activity combination before the planning 33
Table 5-3: Patterns of household’s livelihood activities after land recovery and resettlement. 36
Table 5-4: Number kinds of livelihood after displacement and resettlement. 37
Table 5-5: Current patterns of households’ livelihoods 39
Table 5-7: Vary in cash compensation among households 42
Table 5-8: Classification of household’s cash compensation. 42
Table 5-10: Classification of household’s land compensation by area 43
Table 5-11 : Cash compensation expenses 44
Table 5-13: Household’s investment in education 46
Table 5-14: Using compensated/resettled residential land 47
Chapter I. IntroductloR
1.1. Problem statement – Determinants of Households
The centrally planned economy led Vietnam into deep socio-economic crisis and serious food shortage in the beginning of 1980s. In attempting to get the country out of its difficult situation, in 1986, the Vietnamese Communist Party (VCP) and the government of Vietnam decided to implement radically innovative reform, known as “Doi Moi” reform towards a market-oriented economy. As a result, Vietnam’s economy has significantly improved and a lot of bright achievements. Economy has grown over 7% per year in the 90s and it still continues to present. The economic growth has improved living standard of people, significantly; GDP per capita rising from under 100 USD per year in the early of 1990 to over 800 USD per year in 2007 (WEO 2008).
The industrialization and urbanization process in line with economic reforms has been ta1‹en place throughout the country.
Vietnam is a country with 75 percent of its population living in rural areas (Dower 2004:4). Their life and livelihoods are heavily relied on agriculture or at least agriculture — related activities. Land is, therefore, one of the most valuable assets to farm households, particularly the poor. It is not only the primary means for generating livelihoods, but also the vehicle to accumulate capital and transfer it between generations (Moore 1999:3). Therefore, land recovery by the government for industrialization and urbanization process has strongly affected the life and livelihood of farm households in planned areas. Empirical evidence suggests that one hectare of farmland converted into non-agricultural land leads ten farmers to be jobless.
1.2. Objectives of the study
The study has both conceptual and practical relevance:
1. It is to understand the development process of industrialization and urbanization in Binh Duong province in general and farmland conversion in particular;
2. It is to have a precise insight on the implementation process related to recovery of land, compensation, subsidy and resettlement in Binh Duong province (a case of My Phuoc downtown);
3. It is to describe, analyze, compare livelihoods, livelihood assets and outcomes of households in planned areas before and after the recovery of land, compensation, subsidy and resettlement;
4. It is to assess impacts of the recovery of land, compensation, resettlement and subsidies policies having on livelihood assets and outcomes of households.
As these objectives are fulfilled, this work aims at achieving the two following basic objectives:
1.3. Research questions
1. How does the policy of land recovery, compensation, subsidies and resettlement implement in Binh Duong province, particularly in My Phuoc Downtown?
2. What are livelihood patterns of households in planned areas before and after implementing land recovery and resettlement?
3. What impacts do land recovery, compensation, subsidies and resettlement have on livelihood assets and outcomes of households in planned areas?
1.4. Outline of the thesis
The thesis is divided into six chapters. The introductory chapter comprises of problem statement of the study, objectives of the study and research questions.
Chapter II begins with some definitions and terminologies of Vietnam’s Land Law 1993 and 2003 about land ownership, land allocation, land use rights, land price, land recovery and resettlement.
Chapter III reviews research methodology used for the analysis throughout this woil‹. It begins with first section including analytical framework and econometric framework of the study.
Chapter IV, in first two sections, piesents the industrialization process of Binh Duong province and the background of My Phuoc downtown.
Chapter V presents findings of the study, it includes five sections. The first section describes household’s livelihood patterns in planned areas through three different periods: before land recovery, right after resettlement and at the present.
Determinants of Households – Chapter II –
2. Literature Review
This chapter presents some terminologies and empirical studies of land recovery, resettlement and its impacts on displaced farm households’ livelihoods.
2.1 Definitions and terminologies
2.1.1 Land ownership
“Land is the property of the entire people, uniformly managed by the State” (Vietnam’s Land Law, 1993). The 2003 Land Law of Vietnam re-defined: “Land belongs to the entire people with the State as the representative owner”.
2.1.2 Land allocation
“The State shall allocate land to organizations, households and individuals for stable and long-term use” (Vietnam’s Land Law, 1993). The 2003 Vietnam’s Land Law re-confirmed: “Land allocation by the State means the grant of land use rights by the State by way of an administrative decision to an entity which has requirements for land use”.
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