Vietnam’s terms of accession and distributional impact of WTO membership

The strong growth of the Vietnamese economy over the last two decades has brought about sweeping economic and social changes. In particular, there has been a sharp downturn in poverty along with an upturn in social inequalities (albeit not as sharp as in China). This makes the question of the distributional impact of the country’s WTO accession (January 2007) a particularly keen one. The first simulations made using our micro-simulation model point to mainly four types of redistributive effects induced by WTO membership: job gains (especially industrial jobs), growth in real wages, reduction in gender inequalities, and increase in inequalities between rural and urban areas (but slight drop in overall inequalities). Our findings demonstrate the importance of flanking measures to accompany WTO accession and making the most the opportunities that arise, especially in the area of training, domestic migration, regional policies and assistance to wage earners affected by restructuring.