Dynamics of health insurance ownership in Vietnam, 2004 – 06

Vietnam is undertaking health financing reform in an attempt to achieve universal health insurance coverage by 2014. Changes in health insurance policies have doubled the overall coverage between 2004 and 2006. However, close examination of Vietnam Living Standard Surveys during this period reveals that about one fifth of the insured in 2004 dropped out of the health insurance system by 2006. This paper uses longitudinal data from VHLSS 2004 and 2006 to investigate the characteristics of those who joined and those who left the health insurance system. We model the static and dynamic health insurance choices allowing for heterogeneity of choices. The results from both static and dynamic models highlight the importance of income and education in determining the movement in or out of a particular scheme. The results from the static models of health insurance determinants show significant adverse selection in the current health insurance system where individuals with bad health are more likely to be insured. The findings from the dynamic models of health insurance ownership also suggest that the current health insurance system entails significant adverse selection where people with worse health are more likely to join or stay in and less likely to move out of the system. Some policy implications to increase coverage and to maintain financial sustainability of the health insurance system are drawn.health insurance, adverse selection, Vietnam

The role of the state in Vietnam’s economic transition

This paper discusses Vietnam’s economic development for the three decades since the early 1980s, and the changing role that the state played in this process. The success of the first major liberalization step (Doi Moi ) is attributed, in large part, to the microeconomic/structural reforms that occurred throughout the 1980s and to the confluence of economics and politics. This did not continue into the second half of the 1990s when reforms stalled. Since the Asian financial crisis in 1997/98, the pace of reforms has accelerated. This paper argues that, for the reforms to be effective, the state has to be viewed as performing a catalytic role whilst permitting the private sector to contribute directly to economic growth

Managing commodity price fluctuations in Vietnam’s coffee industry

The coffee tree was introduced into Vietnam by the French during the 1850s. Production, however, was relatively insignificant until after re-unification in 1975, when the policy of constructing “new economic zones” resulted in migration from the densely populated northern and coastal areas to the central highlands whose soil and climate conditions are suitable for coffee-growing..

Integration and transition – Vietnam, Cambodia and Lao PDR

Coming out of French colonial rule and central planning, the three transitional economies of Indochina, Vietnam, Cambodia and Lao PDR, embarked on market-oriented reforms in the late 1980s and early 1990s. Vietnam was certainly the most successful, but all three countries quickly achieved macroeconomic stability and rapid growth. However, the Asian financial crisis in 1997/98, as well as the countries’ use of administrative edicts in response to the crisis, highlights the fragile nature of their transition. The paper holds as a premise that effective integration of the three Indochina economies with the “old ASEANS” involves the former developing market institutions that can sustain “quality” growth which will take them out of the transitional economy status. It finds that, although the three economies are open to international trade and investment flows, their domestic market structures are still very much under-developed, with heavy protection of the state sector in terms of tariff structures and bank credits, and inadequate legal and judiciary developments. As a result, foreign investment flows which went principally into the state-owned enterprises in Vietnam and Lao PDR, and into the quota-dependent garment sector in Cambodia, peaked in the mid-1990s and have been declining ever since. Private sector developments have been retarded, and the process of building a commercial/legal infrastructure to support private enterprise has only just begun. Meanwhile, modern production technologies and processes involving component manufacturing in different countries and then assembly in yet a third country (the so-called “component production and assembly within integrated production systems”) means that the cost of doing business includes not just labour cost but also cost of services such as transport, telecommunication, electricity, insurance and banking. The latter are high cost industries dominated chiefly by SOEs in Vietnam and Lao PDR. The bilateral agreements already in place and the WTO agreements (when negotiated) will set deadlines for the three countries to open their service sectors to entry by international firms. Competition has, and will continue, to drive down prices for these services, thereby benefiting the domestic private sector as well as improving competitiveness for foreign direct investments. Implementation of the international trade agreements will also help to streamline cumbersome laws and regulations as well as improve the judiciary in the three countries, again with significant benefits for the domestic private sector. An important challenge is to develop the necessary human resources to complement the countries’ public administration reform. Another challenge is to maintain macroeconomic stability whilst opening the countries’ domestic and external financial sectors. A third challenge for the “New ASEANs” is to counter protectionism of the developed countries with whom they enter trade agreements