In 1986, most of Vietnam’s population lived in the countryside and depended on subsistence farming with little access to markets, credit or modern health care. That year, the government introduced Doi Moi, a set of market-oriented reforms that decollectivized farmland and opened the economy to foreign trade. The changes set off one of the most significant declines in poverty in Vietnam ever recorded. Gross domestic product per capita climbed from less than $700 in 1986 to nearly $4,500 in 2023, according to the World Bank.

A Sharp Decline in Extreme Poverty

Extreme poverty in Vietnam, measured against the World Bank’s international line of $2.15 a day, fell from 45% of the population in 1992 to less than 1% in 2022, according to the Organisation for Economic Co-operation and Development. Using the World Bank’s benchmark for lower-middle-income countries of $3.65 a day, the poverty rate declined further, from 14% in 2010 to about 4% in 2023.

Health and education outcomes improved alongside income. Infant mortality dropped from 32.6 deaths per 1,000 live births in 1993 to 12.1 in 2023, and life expectancy rose from 70.5 years in 1990 to 74.5 years in 2023, World Bank data show. National health insurance now covers 93% of the population.

Land Reform and Export Manufacturing Drove Growth

Two mechanisms account for much of the drop in poverty in Vietnam. First, Doi Moi returned control of farmland to individual households instead of state collectives, allowing farmers to sell surplus rice and other crops on the open market. Second, the government opened special economic zones and courted foreign manufacturers, turning the country into a hub for electronics, textiles and footwear production. The World Bank describes Vietnam as a middle-income economy that transformed from one of the world’s poorest countries within a single generation.

Millions Remain Vulnerable

Despite the sharp decline in extreme poverty in Vietnam, close to one in five people remain in a low-income bracket and could fall back into hardship after an economic shock or natural disaster, the Organisation for Economic Co-operation and Development (OECD) reported. Ethnic minority households in the country’s northern mountainous provinces and rice-farming communities in the Mekong Delta face particular exposure, as remote terrain and increasing flooding limit access to jobs, credit and health services.

A Road Program Reaching Remote Communities

One initiative addressing this vulnerability is the World Bank-supported Local Road Asset Management Program, which ran from 2016 to 2024 across dozens of Vietnam’s provinces. Rather than funding new construction, the program focused on routine maintenance of existing rural roads and bridges, ultimately improving the lives of more than 11 million people. Close to 51,000 kilometers of rural roads received regular upkeep under the program, connecting thousands of communes, home to some of the country’s most vulnerable populations, to schools, hospitals and markets, the World Bank reported. Lower transport costs allow farmers in remote provinces to reach buyers, addressing one of the structural barriers that keeps pockets of poverty in Vietnam persistent even amid national growth.

A Model for Continued Progress

Vietnam’s experience shows that sustained, reform-driven growth combined with targeted infrastructure investment can transform a country’s fortunes within a single generation. As the World Bank continues to describe Vietnam as a remarkable development success story, the country’s next task is ensuring that the millions still living near the poverty line are not left behind by the same shocks that once defined its past.

– Rachel Ma

Rachel is based in Florham Park, NJ, USA and focuses on Business and New Markets for The Borgen Project.

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