Infrastructure and Poverty in Viet Nam

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Infrastructure and Poverty in Viet Nam

The Living Standards Measurement Study

The Living Standards Measurement Study (LSMS) was established by the World Bank in 1980 to explore ways ofimproving the type and quality of household data collected by statistical offices in developing countries Its goal

is to foster increased use of household data as a basis for policy decisionmaking Specifically, the LSMS is

working to develop new methods to monitor progress in raising levels of living, to identify the consequences forhouseholds of past and proposed government policies, and to improve communications between survey

statisticians, analysts, and policymakers

The LSMS Working Paper series was started to disseminate intermediate products from the LSMS Publications

in the series include critical surveys covering different aspects of the LSMS data collection program and reports

on improved methodologies for using Living Standards Survey (LSS) data More recent publications recommendspecific survey, questionnaire, and data processing designs and demonstrate the breadth of policy analysis that can

be carried out using LSS data

LSMS Working Paper

Number 121

Infrastructure and Poverty in Viet Nam

Dominique van de Walle

Copyright © 1996

The International Bank for Reconstruction

and Development/THE WORLD BANK

1818 H Street, N.W

Washington, D.C 20433, U.S.A

All rights reserved

Manufactured in the United States of America

First printing February 1996

To present the results of the Living Standards Measurement Study with the least possible delay, the typescript ofthis paper has not been prepared in accordance with the procedures appropriate to formal printed texts, and theWorld Bank accepts no responsibility for errors Some sources cited in this paper may be informal documents thatare not readily available

The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) andshould not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of itsBoard of Executive Directors or the countries they represent The World Bank does not guarantee the accuracy ofthe data included in this publication and accepts no responsibility whatsoever for any consequence of their use

The boundaries, colors, denominations, and other information shown on any map in this volume do not imply onthe part of the World Bank Group any judgment on the legal status of any territory or the endorsement or

acceptance of such boundaries

The material in this publication is copyrighted Requests for permission to reproduce portions of it should be sent

to the Office of the Publisher at the address shown in the copyright notice above The World Bank encouragesdissemination of its work and will normally give permission promptly and, when the reproduction is for

noncommercial purposes, without asking a fee Permission to copy portions for classroom use is granted throughthe Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A

The complete backlist of publications from the World Bank is shown in the annual Index of Publications , which

contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countriesand regions The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, TheWorld Bank, 1818 H Street, N.W., Washington, D.C 20433, U.S.A., or from Publications, The World Bank, 66,avenue d'Iéna, 75116 Paris, France

ISSN: 0253−4517

Dominique van de Walle is an economist in the World Bank's Policy Research Department

Library of Congress Cataloging−in−Publication Data

Van de Walle, Dominique

Infrastructure and poverty in Viet Nam / Dominique van de Walle

p cm — (LSMS working paper: 121)

Includes bibliographical references

ISBN 0−8213−3544−8

1 Infrastructure (Economics)—in Vietnam 2 Poverty—Vietnam

3 Vietnam—Economic conditions—Regional disparities 4 Household

surveys—Vietnam I World Bank II Title III Series

Foreword link

2 Poverty and Infrastructure in Viet Nam, 1992−93 link

2.1 Availability of Physical Infrastructure in Rural Viet Nam link

3.2 The Benefits from Irrigation: Policy Simulations link

3.4 The Cost of Irrigation Expansion link

Tables

Table 1: Rural Infrastructure and Poverty in Viet Nam link

Table 2: Rural Infrastructure in North and South Viet Nam link

Table 3: Source of Drinking Water in Rural and Urban Areas of

North and South Viet Nam (%)

link

Table 4: Source of Drinking Water by Region (%) link

Table 5: Toilet Facilities in Rural and Urban Areas of North and

South Viet Nam (%)

link

Table 6: Toilet Facilities by Region (%) link

Table 7: Average per Capita Square Meters of Irrigated,

Non−irrigated, Other and Total Land

link

Table 8: Average per Capita Square Meters of Irrigated,

Non−irrigated, Other and Total Land by Region

link

Table 9: Lighting Source in Rural and Urban Areas of North and

South Viet Nam (%)

link

link

Table 10: Cooking Fuel in Rural and Urban Areas of North and

South Viet Nam (%)

Table 11: Variable Definitions and Summary Data link

Table 12: Regression Results: Crop Incomes link

Table 13: Marginal Effect on Net Crop Income Allowing for

Table 19: Regression Results: Family Labor Costs link

Table 20: Marginal Effect on Family Labor Costs Allowing for

Interaction Effects

link

Figures

Figure 1: Safe Water Sources in Rural Viet Nam link

Figure 2: Sources of Safe Water in Viet Nam link

Figure 3: Sanitation Facilities in Rural Viet Nam link

Figure 4: Sanitation Facilities in Urban Viet Nam link

Figure 5: Total and Irrigated Annual Land Distribution in Viet

This study uses the Viet Nam Living Standards Survey of 1992−93 to examine the association between householdliving standards and the level of access to various infrastructural services It also explores in depth the

distributional impact of an expansion in irrigation infrastructure The paper is part of a larger effort in the PolicyResearch Department to understand how public spending policies affect household welfare

LYN SQUIRE, DIRECTOR

POLICY RESEARCH DEPARTMENT

Abstract

Viet Nam has poor physical infrastructure and high levels of income poverty What role might better

infrastructure play in reducing poverty in Viet Nam? This paper explores the link between poverty and lack ofinfrastructure using the 1992−93 Viet Nam Living Standards Survey The household data indicate that althoughthere are some regional and urban−rural imbalances, in general access to infrastructure is not very differentbetween poor and non−poor—infrastructure tends to be bad for everyone Simulations of the potential benefitsfrom an expansion of irrigation infrastructure and under certain assumptions about how it would be distributed,suggest that the policy would be redistributive, representing proportionately greater gains to the poor The mostpro−poor impacts would occur in Viet Nam's poorest regions and under a policy which targeted irrigation

expansion to small per capita landholding households The average annual economic rate of return of the

irrigation investments considered would be at least 20 percent The paper also finds evidence that various

constraints over and above that presented by lack of irrigation appear to diminish the benefits of irrigation to poorand non−poor alike

Acknowledgments

Financial assistance from the World Bank Research Committee (RPO BB67883) is gratefully acknowledged Iwould like to thank Shanta Devarajan, Paul Glewwe, Frannie Humplick, Nauman Ilias, Jennie Litvack, AmitMohindra, Martin Ravallion, Hedy Sladovich, and Tom Wiens for their help and useful comments

1—

Introduction

Various arguments can be made as to why basic infrastructure investments in a country such as Viet Nam wouldreduce poverty 1 One is that the poor have least access to infrastructure and so will benefit most from newinvestments If the non−poor have captured all the benefits of past infrastructure projects and are now satiatedthen new projects must benefit the poor Another argument is that the poor are concentrated in sectors of theeconomy where rates of return to infrastructure investments are high For example, the poor in Viet Nam dependheavily on agriculture, and rural infrastructure investments could have high agricultural returns

This paper attempts to throw light on these arguments by asking: How large, and how pro−poor are the gains frominfrastructure investments—specifically irrigation—likely to be? The Viet Nam Living Standards Survey

(VNLSS) household data—collected during 199293—contains much information which is suggestive in

examining this question The paper only addresses this question in any depth for irrigation The data have partlyinfluenced this choice—the attraction of modelling irrigation is that it is household specific, and so there is amplescope for identifying interaction effects with other variables and assigning benefits at the household level

The paper begins in section 2 by linking household living standards as revealed in the VNLSS with the level ofvarious infrastructural services Using standard descriptive techniques, an overall picture of the state of

infrastructure, and how access varies by standards of living, is provided Section 3 then attempts to explore in

much greater depth one aspect of infrastructure—irrigation—and its association with living standards Heremarginal, as opposed to average, effects of irrigation expansion are estimated and the distributional implicationsassessed Farm household crop incomes are modelled as functions of household characteristics, communitycharacteristics and land, irrigated and nonưirrigated The impact of irrigation on family labor inputs is also

explored The final section draws some conclusions

1 The paper defines economic infrastructure to consist of services from public utilities such as sanitation, powerand water supply and public works such as road and transport networks and irrigation systems (World Bank1994a) Such services are distinguished by the fact that ''they share technical features (such as economies of scale)and economic features (such as spillover from users to nonưusers)" (World Bank 1994a, p 2) For these reasons,government provision is often seen to be necessary Linkages between poverty and infrastructure are discussed inWorld Bank (1994a), Lipton and Ravallion (1995) and Jimenez (1995) For sector specific discussions see Howeand Richards (1984), Binswanger et al (1993) and Goldstein (1993)

2—

Poverty and Infrastructure in Viet Nam, 1992ư93

Except where noted, the analysis is based on the nationally representative 1992ư93 Viet Nam Living Standards(VNLSS) survey The survey covers 4800 households (23,790 persons) of which 3840 (19,094 persons) are rural,and includes a separate questionnaire on the communes in which sampled rural households are found 2 Collectedinformation covers a wide spectrum of aspects of living standards The household survey touches upon access toand usage of infrastructure facilities in the context of its focus on household members' activities, income sources,health, education, housing and so on The community survey provides detailed information on the availability ofinfrastructure services in each rural household's commune of residence It does not cover urban areas For certaintypes of infrastructure, the community survey is the sole source of information in the VNLSS For others, detailsare also provided at the household level However, the latter are often conditional on the household's usage and sotend to provide a skewed view of "access" For example, for households who do not report an illness or whosemember's illness was not externally treated, the survey reveals nothing about the household's accessibility tohealth facilities The commune level data must also be treated with caution Because communes vary in size anddistances differ, the figures do not reveal all that we would ideally like to know about household access to

infrastructure services These data were supplemented by a number of field trips to rural areas of the North,Center and South of Viet Nam during 1993 and 1994

Throughout, the paper uses household consumption expenditure per person as the welfare indicator Since pricesvary spatially, each household's expenditure is deflated by the region specific poverty line relative to the nationalpoverty line 3 This provides a measure of household per capita expenditures at what can be termed "all Viet Namprices" All monetary units are also converted into real values in this way The analysis is thus based on realexpenditure values representing purchasing power parity throughout the country For the distributional analysis insection 3 and the figures, individuals are ranked by the converted household per capita consumption expendituresand placed into 14 class intervals defined on per capita expenditures

In the following sections, the paper first briefly looks at the general availability of physical infrastructure in therural communes to which households belong It then turns to access to drinking water, sewerage and sanitation,irrigation, energy sources and roads for each household in both urban and rural areas

2 Expansion factors are not needed as the survey is selfưweighted The community questionnaire relies on

interviews of village leaders, health care workers, teachers and local government officials

3 Regional poverty lines are estimated based on the "cost of basic needs" methodology (Ravallion 1994), anddetailed in World Bank, 1994c Deflating by region specific poverty lines is an alternative to using a regionalprice index Because the weighing diagram used in deriving poverty lines tends to be more appropriate to the poorthan that typically used in spatial price indices, their use is often preferred for investigations concerning poverty.

2.1—

Availability of Physical Infrastructure in Rural Viet Nam

Tables 1 and 2 combine information on household living standards from the VNLSS household level survey withinformation on infrastructure facilities in each household's commune of residence from the community schedule

As mentioned, this is possible only for rural households Table 1 shows availability across various householdgroups for all of rural Viet Nam while Table 2 desegregates this information across North and South householdgroups For example, (from first row, Table 1) 70.2% of the population as a whole are estimated to live in

communes which have a passable road, while this is true of 74.7% of people living in "non−poor" households and

of 67.3% of those living in "poor" households (with consumption per person above and below the poverty line,respectively) Using a lower poverty line (arbitrarily set at close to two thirds of the national poverty line) 72.8and 62.5 % of those living in non−poor and poor households respectively live in communes with a passable road

Table 1: Rural Infrastructure and Poverty in Viet Nam

INFRASTRUCTURE Percent of rural population living in communes

with this infrastructure

Headcount

Index of Poverty (%

poor among those with this

infrastructure)

Total High Poverty Line Low Poverty Line

Non−Poor Poor Non−Poor Poor High

Poverty Line

Low

Poverty Line

Note: The table combines data from the household and community questionnaires Poor defined by

higher poverty line are those with yearly per capita expenditures deflated by regional poverty line

which are less than the national poverty line of 1,209,300 Dongs Poor defined by lower line are

those with per capita expenditures deflated by regional poverty line which are less than

(0.65)*national poverty line Electricity is defined as most households in commune have it;

pipe−borne water is defined as at least some households have it

Source: 1993 VNLSS.

Table 2: Rural Infrastructure in North and South Viet Nam

INFRASTRUCTURE Percent of rural population living in communes

with this infrastructure

Headcount

Index of Poverty (%

poor among those with this

infrastructure)

Total High Poverty Line Low Poverty Line

Non−Poor Poor Non−Poor Poor High

Poverty Line

Low

Poverty Line

Total 50.9 19.0

Note: The table combines data from the household and community questionnaires Poor defined by

higher poverty line are those with per capita expenditures deflated by regional poverty line which are

less than national poverty line of 1,209,300 Dongs Poor defined by lower line are those with per

capita expenditures deflated by regional poverty line which are less than (0.65)*national poverty

line Electricity is defined as most households in commune have it; pipe−

borne water is defined as at least some households have it

Source: 1993 VNLSS.

Infrastructure for social services—schools and clinics—is much more widely accessible than other physicalinfrastructure such as electricity and water (Tables 1 and 2) There are clinics in communes accounting for 93% ofthe total rural population, lower secondary schools in communes covering 88% and primary schools (not

reported) exist in every sampled rural commune Facilities tend to be somewhat more prevalent in the North.Differences between

poor and non−poor are not large Thus, according to the VNLSS, communes tend to be quite well−provisioned in

at least basic social services However, the data also remind us that the quality of social services may leave a lot to

be desired For example, although all surveyed rural communes report having a primary school, 20% of childrennot attending school say this is because the school is too far; and 64 % of communes complain of poor materialconditions as the number one problem facing their commune's primary school

Forty−three percent of the rural population live in communes in which "most" households have electricity 4 Thevariation from North (56%) to South (only 20%) is striking Pipe−borne water is even less frequently present incommunes Only 5% of the rural population reside in communes where at least some households have pipedwater This percentage is somewhat higher in the South The availability of electricity and piped water is alsorelated to living standards, with the poor less likely to make their home in communes where these are obtainable.Particularly for water in the North, headcount indices for households in communes with this infrastructure areconsiderably lower than for the population at large

Some of these data must be interpreted carefully For example (as noted), the survey indicates that 70% of therural population are found in communes serviced by a road which is passable year round Two caveats should bementioned First, in the South, coastal areas and parts of the North, canals and waterways are widely used totransport goods and passengers, so that roads may not be the relevant entity Second, the survey gives little

indication of the quality of the roads or how it defines "passable" Based on casual observation during my fieldwork in rural Viet Nam, it seems likely that being passable by a motorcycle or bicycle may have been sufficient toqualify as "passable" For these reasons, the availability of passenger transport may be a more informative

indicator of accessibility Tables 1 and 2 thus include this variable as a proxy for the presence of a serviceableroad or waterway Around half the population are in communes in which some kind of passenger transport isavailable Transport is more frequently found in the South probably reflecting widespread use of boats as well asroad vehicles there There is also a more pronounced difference between poor and non−poor in terms of access to

a passable road and transport in the North, indicating the remoteness of some of the poorest households in theNorth

In the rest of section 2 the household questionnaire is used to further examine access to specific infrastructureservices at the household level in both urban and rural areas

Drinking Water

Over half the population of Viet Nam (52%) secure their drinking water primarily from wells which are notequipped with a pump A further 20% obtain it mostly from rivers, lakes and other water bodies, while another11% rely on rainwater There are sharp regional and

4 The questionnaire asks whether "most" or "just a few" have electricity

urban−rural differences, as well as some variation related to living standards Table 3 presents percentages ofvarious population subgroups according to their drinking water source In rural areas the pattern closely followsthe national one: wells without pumps are most common, followed by water bodies and rainwater However, wellsare much more prevalent in the North where they are by far the most common source of drinking water (71 %).The population in the rural South rely somewhat more on surface water (41%) than wells (33%) Public

standpipes and private taps, whether inside or outside the residence, are almost non−existent in rural areas

Comparable data for Pakistan, Ghana, Tanzania and Peru indicate that 14 percent or more of these countries' ruralpopulations have access to piped water compared to none in Viet Nam 5

Differences between rural poor and non−poor are not large, though the poor almost always have less access to themore desirable sources of drinking water Figure 1 which plots how use of a water drinking source varies acrossexpenditure per capita groups reinforces this conclusion Though the slopes show a tendency to slightly incline ordecline as living standards rise, on the whole the variation across expenditure groups is not dramatic

Differentials between rich and poor are more pronounced in urban than in rural areas This is illustrated by Figure

2 which adds the urban pattern to the rural to give the national equivalent of Figure 1 Access to water taps

exhibits a steady rise beyond the seventh class interval while use of wells steadily drops from about the sixth.Table 3 shows that the better off are considerably more likely to have access to an inside tap, outside tap or publicstandpipe than the poor Still, although piped water systems are limited to urban areas, less than half the totalurban population have access to tap water (public or private) Again, this compares poorly with the urban areas ofour 4 previous comparator countries, where the lowest access is found in Pakistan at 57% of urban households 6The data clearly show how inadequate these networks continue to be There are also distinct North−South

differences between urban areas Private indoor taps are more prevalent in the South (44 versus 24%) whilepublicly provided standpipes are more standard in the North (16 versus 4%) Wells with pumps are also morefrequent in the South (10 versus 2%) As in rural areas, wells without pumps are the most common source ofdrinking water for the North's urban populations (43%) It is striking to note that as much as 14% of the South's

urban non−poor population relies on assorted water bodies, while 30% of the poor do so.

5 These countries are chosen as comparators because they have Living Standard Measurement Surveys whichfollow the same methodologies and ask similar questions The data on access to piped water in rural areas is thefollowing: Ghana: 13.5 percent of households (1991/92 Ghana Living Standards Survey); Tanzania: more than21.5% of households (1993/4 Human Resources Development Survey) though this number excludes obtainingwater from a neighbor's piped water supply; Pakistan: 15% of households (Pakistan Integrated Household Survey1991/2); and Peru: 43 % of the rural Sierra population (1991 Living Standard Measurement Survey)

6 Results on access to piped water in urban areas are the following: Ghana: 73.5 percent of households (1991/92Ghana Living Standards Survey); Tanzania: more than 56% of households (1993/4 Human Resources

Development Survey) though this number excludes obtaining water from a neighbor's piped water supply;

Pakistan: 57% of households (Pakistan Integrated Household Survey 1991/2); and Peru: 91 % of the rural Sierrapopulation (1991 Living Standard Measurement Survey)

Table 3: Source of Drinking Water in Rural and Urban Areas of North and South Viet

Nam (%)

Non−poor Poor Total Non−poor Poor Total

Non−poor Poor Total Non−poor Poor Total

Note: The figures are % of persons in each subgroup according to their household's primary

source of drinking water Totals may not add up to 100—remainder is attributable to "other"

Private inside and outside taps are aggregated for rural areas Bottled water is one of the

options though it is rare

Source: 1993 VNLSS.

Figure 1:

Safe Water Sources in Rural Viet Nam

Figure 2:

Sources of Safe Water in Viet Nam

Table 4 presents some of the same information disaggregated across urban and rural areas of the seven

geographical regions Among rural areas, the deltas—particularly the Mekong—stand out In contrast to all otherrural regions where populations overwhelmingly rely on wells without pumps, in the Mekong use of water fromrivers and lakes, rain and wells with pumps is higher than elsewhere In both deltas, over 20% depend on

rainwater A large majority of the urban populations of the Northern Uplands and the North Coast also procuretheir drinking water from wells (no pumps) It is noteworthy that piped water is found primarily in the Red River,Central Coast and Mekong Delta regions reflecting the better provisioned urban centers of Hanoi, Danang, and

Ho Chi Minh City respectively

Table 4: Source of Drinking Water by Region (%)

Uplands

RedRiver

NorthCoast

CentralCoast

CentralHighlands

SouthEast

MekongDelta

Note: The table gives the percent of persons in each subgroup according to their household's

primary source of drinking water

Source: 1993 VNLSS.

The VNLSS data also suggest that up to 80% of the population lives within 100 meters of their source of

non−piped drinking water and almost all (98%) within 1 kilometer Close to 79 % of all households obtain bathand laundry water from the same source Almost all the rest also live within a kilometer of their household'ssource for non−drinking water needs Though there may be seasonal variations not captured by the VNLSS—theextended dry season may require collection from surface water at greater distances (World Bank 1990)—thesedata do not

lend support to the claim that water collection presents a severe burden on women and children (UNICEF 1994,NEDECO 1993)

Finally, it is important to point out that the data tells us nothing about the quality or safety of the obtained

drinking water Piped water is reputed to often go untreated Wells are for the most part shallow and the waterprone to contamination Indeed, one study found that up to 80% of wells were of unacceptable standard andharbored harmful bacteria though households still preferred them to alternative sources (UNICEF 1994) Givensewerage and sanitation conditions (see below), the presumption must be that surface water is rarely safe fordrinking Evidence on the country's health profile and high incidence of water−related diseases implies severewater and sanitation problems Viet Nam's National Programme of Action for Children (NPA) reckons that 21%

of the rural population have a hygienic and ample water supply, though UNICEF cautions that this is on the highside of most estimates (UNICEF 1994)

Sewerage and Sanitation

Untreated industrial and residential waste waters tend to be dumped straight into existing sewerage systems andwaterways Waste from flush toilets enters sewers directly or via septic tanks and is eventually discharged intorivers and other water bodies Waste water systems generally manage both flood and waste waters Other than thatprovided through septic tanks, there is little treatment (World Bank 1990) For the most part, sewer systems werebuilt pre−1954 in the North and pre−1975 in the South Coverage is limited and performance of existing networks

is poor

A fraction of the population is serviced by conventional sewerage systems The VNLSS indicates the style oftoilet used by each household The survey lists flush, double vault composting latrines (DVCL), pit latrines, other,and no toilet as choices The first three are considered hygienic and desirable relative to other methods by theMinistry of Health "Other" which includes bucket and fishpond latrines, toilets hanging over water bodies, andanimal and human waste manure tanks, are of lower standard and not officially sanctioned

Human wastes are used extensively in agriculture and aquaculture and are a major concern for rural sanitation A

1989 national study revealed extremely high rates of parasitism—as high as 90−95%—in villages where DVCLare common and excreta used as fertilizer, and a much lower rate—40%—in similar villages where fishpondlatrines are prevalent (World Bank 1990) Although DVCLs are hygienic when operated correctly—includingallowing sufficient composting time in a sufficiently large vault—in practice, proper use appears to be rare TheNPA's figure for the percent of the rural population with access to adequate sanitation facilities is 13% (UNICEF1994)

Tables 5 and 6 show population subgroups according to the type of toilet used by the household Nationally, 26%

of the population reports having no toilet This indicates a worse situation than that found in Peru (17%),

Tanzania (5.3% of households) and Ghana (25% of

households).7 A further 33% of the population use pit latrines, 22% use ''other" and the rest flush and double vaultcomposting toilets A tiny percentage have access to flush toilets in rural areas While not commonly in useanywhere in the South, DVCLs are employed by 13% of the rural North's population and by 21% of its ruralnon−poor Pit latrines are by far the most common toilet type in the rural North while other and no toilet are mostprevalent in the South The urban areas of the Central Coast and the South East account for most flush toilets.However, the former also betrays one of the worst waste management situations in the country A householdwithout access to a flush toilet in the urban Central Coast is most likely to have access to no toilet at all In itsrural hinterland, the percentage of the population without toilet facilities of any kind reaches a national high of 55

% How household waste management varies across expenditure groups can be seen in Figure 3 for rural areasand in Figure 4 for urban areas Figure 3 indicates a clear and steady decline in the proportion of the populationwithout recourse to any kind of toilet facility as living standards rise The use of DVCLs starts at a very low rateand rises with welfare levels, as does the use of flush toilets Interestingly, pit latrines exhibit more of a flatinverted u shape These are used primarily in the mountainous areas of the North The graph reflects the fact thatthe poorest in these regions probably have worse access than the less poor, while less of the higher expenditurepopulation is found in these areas In urban Viet Nam, patterns are less clear except in the case of flush toiletswhich exhibit a steady increase as per capita expenditures rise

Figure 3:

Sanitation Facilities in Rural Viet Nam

7 Sources as detailed in footnote 5

Figure 4:

Sanitation Facilities in Urban Viet Nam

Table 5: Toilet Facilities in Rural and Urban Areas of North and South Viet Nam (%)

Pit latrine 47.2 44.8 45.6 21.3 18.4 19.8

Note: The table gives the percent of persons in each subgroup according to the toilet facility used

by their household DVCL is a double vault compost latrine

NorthCoast

CentralCoast

CentralHighlands

SouthEast

MekongDelta

Note: The table gives % of persons in each subgroup according to the toilet facility used by their

household DVCL is a double vault compost latrine

Source: 1993 VNLSS.

Access to Irrigation

Around half of Viet Nam's annual crop cultivation area is currently irrigated Irrigation needs are largely supplied

by surface water (Vu and Taillard 1993) Irrigation includes both large−scale (networked investments) and

small−scale (wells, bore−holes) systems The two major river deltas are characterized by complex hydraulicsystems dating back hundreds of years which incorporate navigation, flood control, drainage, saline intrusioncontrol and irrigation functions The latter rely on a system of canals with pumping stations and on−farm watercontrol arrangements These networks are in a state of severe disrepair It is estimated that by rehabilitation of theexisting infrastructure alone, there is the potential to expand irrigation to some 700,000 hectares assuming there issufficient water (SPC et al 1989) Outside the deltas, irrigation—like other physical infrastructure—is less welldeveloped, though there are expansion possibilities In some areas, this requires storage dam construction andgravity irrigation systems In others the development of small scale irrigation systems such as based on smallelectric pumps drawing water from reservoirs and natural water bodies is more feasible

Some features of the distribution of irrigation infrastructure based on information from the VNLSS can be seen inTables 7 and 8, and in Figure 5.8 The tables present mean per capita square meters of total land and its variouscomponents, including irrigated and non−irrigated annual crop land and perennial land, across poor and non−poorgroups (Table 7) and across Viet Nam's seven geographical regions (Table 8) Differences between the ruralNorth and South are the most striking feature of Table 7 First, overall per person land amounts are quite a bithigher in the South as are all components with the exception of "other" land But, the most notable difference is inthe variation between poor and non−poor land endowments These are relatively equitable in the North, thoughthe poor have less irrigated land However, these differences are dwarfed by the disparities in the South Onaverage, the Southern poor have access to less than half the amount of land that the non−poor control Table 8reveals some of the geographical variation—attributable in large part to environmental terrain and variable

population densities Average total land cultivated per person varies from 702 m2 in the Red River Delta to 1977m2 in the Mekong Delta, while irrigated land ranges from 17 in the Central Highlands to 713 m2 in the MekongRiver Delta Figure 5 combines the geographical and distributional aspects of land allocation Total land and totalirrigated annual land are graphed separately (both in square meters per capita) by per capita expenditure groupsfor all of rural Viet Nam and individually for the 7 regions Past land reform has ensured relatively low

intra−regional inequality of access to land (Vu and Taillard 1993) Significant variation in farm size and landquality can be found between regions Landholdings are more correlated with living standards in some regions Inparticular, all three regions of the South reveal a more pronounced positive association of land size with per capitaexpenditure levels In general the distribution of irrigation appears to be more equitable or about the same as that

of total land Based on the tables and Figure 5, there appears to be considerable room for expanding irrigation

Table 7: Average per Capita Square Meters of Irrigated, Non−Irrigated, Other and Total Land

Non−poor Poor Total Non−poor Poor Total Non−poor Poor TotalIrrigated annual

Total land 932.4 888.6 902.9 2505.7 1249.4 1872.8 1604.3 985.8 1222.9

Note: Per capita m2 of land are calculated over the rural farm population Other land includes forest, water

surface, and "other" as defined in footnote 10

Source: 1993 VNLSS.

8 According to the interviewer's instruction manual, irrigated land in the VNLSS includes all land which isirrigated either through a system of canals or by means of electric or petrol pumps which prevent flood anddrought

Table 8: Average per Capita Square Meters of Irrigated, Non−Irrigated, Other and Total Land by

Region

Rural Northern

Uplands

RedRiver

NorthCoast

CentralCoast

CentralHighlands

SouthEast

MekongDelta

Note: Per capita m2 of land are calculated over the rural farm population Other land includes forest,

water surface, and "other" as defined in footnote 10

in the North and South respectively In urban Viet Nam a large majority of the population depends on electriclighting though the proportions are smaller in the South than in the North and among the less well off than thebetter−off Again, comparison with countries for which similar data exists can help place the Viet Nam numbers

in context On the whole, household access to electricity in Viet Nam compares favorably to that in both Ghana(69% of urban and 9% rural households) and Tanzania (35% and 1%) but less well to Peru (95% of the totalpopulation)

Electricity is rarely used for cooking Table 10 indicates that wood and leaves predominate in the rural areas ofthe North and wood dominates in the South's rural sector, while coal and kerosene also take on importance in theurban household sector The differences between poor and non−poor rural groups are small In the urban areas ofboth parts of the country however, the poor are more likely to use wood and the better off to use coal or kerosene.

Table 9: Lighting Source in Rural and Urban Areas of North and South Viet Nam (%)

Non−poor Poor Total Non−poor Poor Total

Non−poor Poor Total Non−poor Poor Total

Table 10: Cooking Fuel in Rural and Urban Areas of North and South Viet Nam (%)

Non−poor Poor Total Non−poor Poor Total

Non−poor Poor Total Non−poor Poor Total

Note: The table gives % of persons in each subgroup according to their household's cooking

fuel Totals may not add up to 100 The remainder is attributable to "other" and kerosene and

electricity in rural areas, and to other and bottled gas in urban areas

Other than the information (from the community schedule) of whether a road passes through the commune, there

is little information in the VNLSS to illustrate the poor state of the country's transportation sector The public roadnetwork consists of around 105,100 km of roads: 11,400 of national roads, 14,200 of provincial level roads,25,300 of district level roads, 46,200 of village roads and 2,600 urban roads and 5,400 special roads (World Bank

1994b) In 1992, around 12 percent of Viet Nam's existing road network was paved compared to 30% of India's in

1985 and 48% of Indonesia's in 1990 (World Bank 1994b) Average road density is quite low at 0.32 km per sq

km of land area and 1.6 km per 1000 inhabitants Not unexpectedly, densities are highest in the two deltas andlowest in the more mountainous regions Together with the rest of the infrastructure stock in Viet Nam, the roadnetwork—dating largely from before the 1970s in the South and pre−1954 in the North—is old and in severedisrepair This is also true of other transport infrastructure including inland waterways (a 40,000 km network),ports, and the railway system (World Bank 1994b)

2.7—

Summary and Implications

The current state of physical infrastructure in Viet Nam is clearly poor by most standards Nearly a third of therural population live in communes without a passable road Nearly half do not have access to passenger transport.More than half do not have electricity Barely half of annual crop land is irrigated All but 5% of the rural

population live in communes where no one has access to piped water There are also marked differences in access

to infrastructure between urban and rural areas with urban areas generally favored, as well as considerable

regional imbalances

The poor tend to have worse access to infrastructure than the non−poor However, for many types of

infrastructure the poor in rural Viet Nam do not have appreciably worse access than do the non−poor: many types

of basic infrastructure are equally bad for both Basic infrastructure ventures will not automatically be

redistributive It cannot be argued that the non−poor already have adequate basic infrastructure and the poor havenone such that new investments will necessarily benefit the poor

What do these data imply for the distributional impacts of future investments in infrastructure? The answer will

depend on the marginal benefits from infrastructure investments For example, take irrigation If a household's

land is fully irrigated then clearly the marginal benefits to that household from expanding total irrigated area arezero Those who benefit from a general expansion of irrigation, say, will be those who have non−irrigated land If

it were true that the rich have fully irrigated land while the poor don't, then the benefits would go to the poor.However, if anything it is the non−poor who have more of both non−irrigated and irrigated land (Table 7 andFigure 5) Looking at Figure 5 one would not think that undifferentiated irrigation infrastructure would be animportant redistributive instrument as such; the poor would

benefit but probably less so than the non−poor 9 There are, however, a number of other factors which are

correlated with the marginal benefits from irrigation It is often argued for example that smaller farms are moreproductive so that marginal benefits may be higher for the poor Or it might be argued that marginal benefits willtend to be higher for those with more human capital, likely to be the not−so−poor On balance, it is not clear whatthe outcome would be Inferring the potential gains from irrigation using cross−sectional data thus requirescontrols for these other factors To properly address such questions we need to go beyond the simply descriptiveanalysis and investigate marginal impacts

9 It may be a different question if one could adequately target irrigation to the poor, but targeting can often bedifficult and costly (van de Walle 1995a)

3—

Explaining Crop Income

This section attempts a detailed assessment of the likely distributional impacts of an expansion in the irrigatedland area The data set contains detailed information on household land assets and farm incomes The vast

majority of Viet Nam's population derives its livelihoods from farming (van de Walle 1995b) The extent to whichannual crop land is irrigated and water adequately managed are widely recognized as key factors in the

productivity and success of agriculture at the local level Although the aggregates hide considerable regionalvariation, around one half of agricultural annual crop land is currently under irrigation 10 For these reasons, it ispossible to look closely at the impact of irrigation infrastructure on livelihoods in rural Viet Nam How largewould the gains in incomes from further irrigation investments be? Would those gains be pro−poor? Such

questions are of considerable interest given the multiple policy choices faced by policy makers in a countrysetting where budgets are heavily constrained and simultaneously challenged by a plethora of real investment andconsumption needs

3.1—

Determinants of Crop Income

In attempting to throw some light on these questions the paper looks at the determinants of net farm crop incomeand the role played by irrigation The size of the difference in marginal returns between irrigated and

non−irrigated land determines the income gains from irrigating a unit of land To quantify the gains from

irrigation the paper posits the profit function π (p , L N , L 1 , z ) giving the farm−household's maximum profit conditional on a vector of prevailing output and input prices (p ), amounts of non−irrigated (L N ) and irrigated (L

1 ) annual crop land, and a vector of other fixed factors (z ) including other types of agricultural production land,

human capital, location specific agro−ecological variables and other constraints arising from market imperfections

(such as the underdeveloped state of labor markets and supervision costs of labor) In specifying z a wider range

of variables are allowed than one would normally posit in a profit function, recognizing that this is a transitioneconomy in which markets are still underdeveloped For example, in many parts of Viet Nam household

demographic factors can be an important constraint on production arising out of labor−market imperfections andinstitutionalized non−market modes of factor allocation

10 In addition to annual crop land, households derive agricultural incomes from perennial land (used for perennialtree crops), forest land (natural forest or reforested areas used for inseminating of young plants and growing offorest tree crops), water surface land (for raising water products) and what I will call other land The latter

includes various other land categories listed in the survey: vacant lots and bald hills (land managed by householdbut not cultivated for at least 12 months); virgin land (burnt and fallow land); and other (area of road and dikesides, river banks, etc)

Output and variable input prices are assumed to vary between but not within communes, so these can be

represented by a vector of commune dummy variables For the jth household, the profit function is assumed to belinearized as follows:

where the marginal returns to non−irrigated and irrigated land are given by

and