Official development assistance also plays an important role. ODA donor countries committed a combined US$ 4.45 billion aid for Vietnam for 2007, the largest amount yet for the country, at a meeting in December. Japan is one of the largest donor countries, with an US$ 890 million commitment.
According to the United Nations Development Programme, Vietnam reduced poverty rates — the proportion of people who live on less than US$ 1 a day — to 24.1 per cent in 2004, from over 58.1 per cent in 1993. The government hopes to lower the percentage to 11 per cent by 2010.
"Vietnam is one of the few (developing) countries that has successfully linked economic growth and poverty reduction," said Ayumi Konishi, Director of the Asian Development Bank's Vietnam office.
But it is also true that some people, especially in rural areas, are still lagging behind, as in other fast-growing nations, including China, where the gap between wealthy coastal cities and poor inland regions is increasing.
In the case of Vietnam, curbing poverty requires reducing income inequality between the dominant ethnic group, the Kinh, and ethnic minorities living in mountainous areas. While there are more than 50 ethnic minority groups, their population accounts for only 14 per cent of the total. But ethnic minorities account for nearly one-third of the poor, according to UNDP.
The government, along with multilateral development agencies, are focusing on poor ethnic minorities in the mountains who remain isolated from the country's economic growth. One such project to improve living conditions of the rural poor was the water supply programme in Dakrong district of Quang Tri Province, a mountainous area in central Vietnam.
"Our family's life is much better now," said Ho Thi Huong, who lives in Dakrong village of Mo O, with her husband and two children. Mo O is home to the Van Kieu tribe. "We used to walk one km to draw water from the Dakrong River or from the mountain stream every day," the woman in her mid-30s said.
The construction of the water supply facility, completed in 2003 at a cost of roughly US$ 410,000, was partially financed by the ADB, an international development institution working to reduce poverty in the Asia-Pacific region. Japan and the United States are the largest donor countries for the ADB.
The facility has a daily capacity of 3,000 cu. metres, supplying water for some 10,000 people in the province.
Although there is no official data, people in the district are less prone to digestive disorders and kidney disease after gaining access to clean water, said Quang Tran, an official of the facility.
Huong's family uses water supplied from the facility only for drinking, still depending on river water for laundry and bathing.
The water supply project is one of the successful examples of improving living conditions of the poor. UNDP says the overall proportion of people with access to clean water rose to 70 per cent in 2004, from 26.2 per cent in 1993, while the rural proportion increased to 58 per cent in 2004 from 18 per cent.
However, to truly eradicate poverty, another step must follow.
Huong said her family's annual income is only about US$ 250. Her husband, the family's breadwinner, grows peanuts and beans on land he rents from the government. Asked what she wants next, Huong said: "There are too many things to count. We don't even have a bathroom or a toilet in our house."
Konishi, of the ADB, said the government needs to place more emphasis on fighting rural poverty.
In addition to developing infrastructure and providing medical services and education, he said greater efforts to promote regional trade are needed to create jobs for the poor, as seen in the development of industrial zones now under way in central Vietnam.
"A remote village will no longer be isolated if the movement of people and goods is facilitated."