Impact of shocks on vulnerability to poverty in Thailand and Vietnam: consequences for the development of emerging Southeast Asian economies (since 2006)

The overall objective of the proposed DFG research unit is to advance theoretically and empirically the concept and the methodology of measuring vulnerability to poverty in the economic and political context of emerging economies in Southeast Asia. This objective will be reached through interdisciplinary economic research that is based on the establishment and analysis of a wide-ranging, joint database collected from rural households, firms and regional stakeholders in provinces in Thailand and Vietnam that border their common Indochina neighbors, i.e. Laos and Cambodia. The cross-sectional database will be complemented by panel data and secondary data from household surveys and provincial statistics.

Results of this research are expected to foster the understanding of the scientific community, development specialists and decision-makers in development economics in formulating policies for pro-poor economic growth and proactive social protection in a risky ecological, economic and political environment. Within a total time frame of six years, the first three-year phase will focus on conceptual issues and the establishment of an empirical basis for measuring vulnerability of poor households in the two countries. The specific objectives of phase 1 are:

* To expand and deepen the conceptual and methodological understanding and associated measurement issues involved with vulnerability to poverty in a risky global and national environment and provide a “state of the art” assessment of the vulnerability to poverty in Southeast Asia.

* To advance the scientific understanding of poor households’ decision-making in risky environments in emerging economies. This will be achieved through interdisciplinary analysis of intra-sectoral (agriculture), inter-sectoral and interregional (off-farm activities, migration) as well as interpersonal and inter-temporal (credit, saving and finance) ways of diversifying against external risks. It will also include intra- and inter- household ex ante and ex post coping strategies to reduce and manage vulnerability.

* To assess the impacts of shocks on the vulnerability to poverty of rural households and communities in terms of agricultural production, agricultural product markets, financial markets, social services and public goods, migration (labor markets) and technology adoption.

* To investigate the hypothesis of the concept of forward-looking social protection as an approach to align the growth equity trade-off in development. The results will provide guidance for developing country governments and for international donor organizations on effective and efficient public interventions to support risk-reducing strategies of the poor and vulnerable.