INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS
UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM
VIETNAM- NETHERLANDS
PROGRAMME FOR M.A. IN DEVELOPMENT ECONOMICS
DETERMINANTS OF HOUSEHOLDS' INCOME IN
PLANNED AREAS: A CASE OF MY PHUOC
DOWNTOWN- BEN CAT DISTRICT- BINH DUONG
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS
By
THAI THANH PHONG
,so G1i0ovc 1:~Xo ·~o---. ·-1
TRIJONG f),~, HQC KINH TE TP.HCM
I
TIIV YVII1.r\T I
) 1 1-i1
HO CHI MINH CITY, OCTOBER 2009
I
UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM
INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS
VIETNAM- NETHERLANDS
PROGRAMME FOR M.A. IN DEVELOPMENT ECONOMICS
DETERMINANTS OF HOUSEHOLDS' INCOME IN
PLANNED AREAS: A CASE OF MY PHUOC
DOWNTOWN- BEN CAT DISTRICT- BINH DUONG
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS
Academic Supervisor: DR. HA THUC VIEN
Student: THAI THANH PHONG
HO CHI MINH CITY, OCTOBER 2009
Acknowledgements
In the first of all, my heartfelt thank goes to my supervisor, Dr. Ha Thuc Vien.
His comments and suggestions on my term paper for Rural Development course
helped me to form my research topic. During the course of my thesis research and
writing, I have received numerously his kind supervision, guidance, useful comments
and encouragements. My deepest thanks also go to Associate Professor Dr. Nguyen
Trong Hoai, Co- Director of Vietnam - The Netherlands Programme for M.A. in
Development Economics, who has always given me his encouragements and kindly
during the course of my study and thesis research. My thanks also go to my kindly
and enthusiastic classmate, Mr Nguyen Ngoc Danh, who is always ready to instruct
me while I am processing and analyzing to my data with STATA 9 .1.
My thesis was made possible with co-operation and supports of local people in
of My Phuoc downtown who kindly provided me useful information and ideas related
to my research. I am grateful to My Phuoc downtown and Ben Cat district People's
Committee, especially to Mrs. Thuy who gave me many information which included
important data; Mr Tuan in ward 2, Mr Chau in Ward 3, Ms Hoa in ward 4 who took
and introduced me with local people during time conducting my fieldwork. I would
also like to present many thanks to my cousin and my friends, who helped me to
approach project documents of My Phuoc IPs.
I am grateful to my manager in Binh Duong Telecommunication, Mrs Huong,
who created advantage condition in job let I had time to survey during two month.
My heartfelt gratitude also goes to my wife, Ha and two girls, Nha and Thanh, who
are my love and motivation during the studying time.
Determinants of Households' Income in Planned Areas
DECLARATION
I declare that "Determinants of Households' Income in Planned Areas: A
Case of My Phuoc Downtown - Ben Cat District - Binh Duong Province" is my
own work, that it has not been submitted to any degree or examination at any other
universities, and that all the sources used or quoted are indicated and acknowledged
by complete references.
HCMC, October 2009
THAI THANH PHONG
MDE- Class 13
11
Determinants of Households' Income in Planned Areas
Abstract
This study aims to investigate the impacts of land recovery for industrial and
urban development on displaced people's livelihoods those who are living in
industrial and urban planed areas in Binh Duong Province through a case study of My
Phuoc Downtown. A main approach of this study is based Sustainable Livelihood
Framework developed by DFID (2001). A combination of qualitative and quantitative
methods was employed throughout the research process, from the early stage to the
data analysis stage to describe livelihood patterns of surveyed households before and
after displacement and to analyze statistically factors affecting their income. More
specifically, econometrics models were applied to estimate the role of livelihood
assets on livelihood outcome of displaced households.
Quantitatively, linear regression model was applied to estimate the impacts of
household livelihood assets, compensation (both in kind and in cash) on household
income. The estimation results show that there is positive impact of livelihood assets
on livelihood outcome (total household income) before the displacement at a 1%
significant level (wage and saving) and at a 5% significant level (farmland and
residential land). After resettlement, estimating results of simultaneous equations
model with three-stage least-squares estimation method inform that compensated
money, compensated residential land and accessed credit volume has positively
determined the total investment for livelihood rehabilitation at 1% significant level. In
addition, a number of resettled housing land transfer times are positive effect
(significantly at a 5% level) to household's total livelihood investment. Together with
investment for livelihood rehabilitation, total expenditure on children education after
resettlement also has positive impact with total household's income after resettlement
at a 5% significant level. Proxy indicators of livelihood assets are positively and
significantly related with total income after resettlement such as: education of
household head (at a 5% level), a number of working member in household (at a 1%
level); a number of cell phone in a household (at a 1% level); a number of meeting
time per year (at a 1% level) and financial savings and livestock value before the
displacement (at a 5% level).
Moreover, the study found that, most displaced households do not receive any
priority in vocation trainings, credit for alternative livelihood development and tax
MDE- Class 13
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Determinants of Households' Income in Planned Areas
exemplification programs from local government and urban development project
investors although displaced people are often promised by authorities and investors at
the beginning ofthe project initiation.
Keywords:
Livelihood,
industrialization,
land
recovery,
compensation,
resettlement.
MDE- Class 13
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Determinants of Households' Income in Planned Areas
Contents
Acknowledgements ....................................................................................................... i
Abstract ...................................................................................................................... iii
Contents ........................................................................................................................ v
List of Tables ..............................................................................................................vii
List of Figures .......................................................................................................... viii
Chapter 1....................................................................................................................... 1
1. Introduction ........................................................................................................... 1
1.1. Problem statement .......................................................................................... 1
1.2. Objectives ofthe study ................................................................................... 3
1.3. Research questions ......................................................................................... 4
1.4. Outline of the thesis ........................................................................................ 4
Chapter II ..................................................................................................................... 6
2. Literature Review .................................................................................................. 6
2.1 Definitions and terminologies ........................................................................ 6
2.1.1 Land ownership ..................................................................................... 6
2.1.2 Land allocation ...................................................................................... 6
2.1.3 Land use rights ....................................................................................... 6
2.1.4 Land price .............................................................................................. 7
2.1.5 Land recovery and resettlement ............................................................. 7
2.1.6 Livelihoods ............................................................................................ 8
2.2 Empirical studies of land recovery, resettlement and its impacts on
displaced farm households' livelihoods ......................................................... 8
Chapter III ................................................................................................................. 12
3. Research Methodology ........................................................................................ 12
3 .1.
3.2.
3.3.
3 .4.
Analytical framework of the study ............................................................... 12
Econometric framework ofthe study ........................................................... 14
Variables definition ...................................................................................... 16
Data collection and analysis ......................................................................... 18
3.3 .1 Selection of study site .......................................................................... 18
3.3 .2 Unit of analysis .................................................................................... 19
3.3 .3 Data sources and collection techniques ............................................... 19
3.3.4 Data· analysis ........................................................................................ 20
Chapter IV .................................................................................................................. 22
4. Description of Study Area ................................................................................... 22
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Determinants of Households' Income in Planned Areas
4.1
4.2
4.3
4.4
4.5
Industrialization progress ofBinh Duong province ..................................... 22
Background of study site (My Phuoc downtown) ........................................ 22
Regulations of Vietnam on land recovery and resettlement.. ....................... 24
Regulations of land recovery and resettlement of My Phuoc Industrial
Park project ................................................................................................... 25
The implementation of policies of land recovery and resettlement in My
Phuoc downtown .......................................................................................... 27
Chapter V ................................................................................................................... 32
5. Displaced Households' Livelihoods .................................................................... 32
5.1 Household's livelihood patterns ................................................................... 32
5.1.1 Households' livelihood patterns before land recovery (Year 2000) .... 32
5.1.2 Patterns of household's livelihood right after resettlement ................. 33
5.1.3 Current patterns of households' livelihood ......................................... 37
5.2 Compensation and compensation using ...................................................... .41
5.2.1 Compensation ...................................................................................... 41
5.2.2 Compensation using ............................................................................. 44
5.3 Livelihood Assets ......................................................................................... 51
5.3.1 Natural Capital ..................................................................................... 51
5.3.2 Physical capital .................................................................................... 52
5.3.3 Financial Capital .................................................................................. 54
5.3.4 Social Capital ....................................................................................... 56
5.3.5 Human capital ...................................................................................... 58
5.4 Households' expenses .................................................................................. 61
5.5 Household's income ..................................................................................... 61
5.5.1 Income sources and income calculation method ................................. 61
5.5.2 Trends in household income ................................................................ 63
5.6 Results ofthe econometric analysis .............................................................. 67
5.6.1 Determinants of households' income before the planning .................. 67
5.6.2 Determinants of households' income after resettlement ..................... 68
Chapter VI .................................................................................................................. 73
6. Conclusions ........................................................................................................... 73
6.1
6.2
Conclusion and recommendations ................................................................ 73
Research limitation ....................................................................................... 75
References ................................................................................................................... 76
Appendices ................................................................................................................. 82
Appendix A: Variables definition .......................................................................... 82
Appendix B: Aggregated income model before the planning (Year 2000) ........... 83
Appendix C: Aggregated Income Model after the Resettlement (Year 2008) ...... 83
Appendix D: Questionnaires .................................................................................. 85
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Determinants of Households' Income in Planned Areas
List of Tables
Table 3-1 : Variable definition ..................................................................................... 17
Table 4-1: Summary of compensation following regulations ..................................... 25
Table 4-2: Summary of compensation in My Phuoc Industrial Park .......................... 27
Table 4-3: Policies of compensation and resettlement ................................................ 31
Table 5-l: Patterns of Livelihood before the Planning ................................................ 32
Table 5-2: Patterns oflivelihood activity combination before the planning ............... 33
Table 5-3: Patterns of household's livelihood activities after land recovery and
resettlement .................................................................................................................. 36
Table 5-4: Number kinds oflivelihood after displacement and resettlement.. ............ 37
Table 5-5: Current patterns of households' livelihoods .............................................. 39
Table 5-6: Current patterns of household livelihood activity combination ................. 40
Table 5-7: Vary in cash compensation among households ........................................ .42
Table 5-8: Classification of household's cash compensation ...................................... 42
Table 5-9: Vary in household's land compensation .................................................... 43
Table 5-l 0: Classification of household's land compensation by area ...................... .43
Table 5-11: Cash compensation expenses ................................................................... 44
Table 5-12: Detail of property investment from cash compensation ......................... .45
Table 5-13: Household's investment in education ...................................................... 46
Table 5-14: Using compensated/resettled residential land .......................................... 47
Table 5-15: A number oftimes to transfer compensated land .................................... .47
Table 5-16: Reasons of sale compensated/resettled residentialland ........................... 48
Table 5-17: Other income sources of displaced household ......................................... 48
Table 5-18: Balance of compensation expenses .......................................................... 49
Table 5-19: Detail of household finance deficit .......................................................... 49
Table 5-20: Finance sources to cover deficit.. ............................................................. 49
Table 5-21: Surplus of compensation after expenses .................................................. 50
Table 5-22: Land area of observed households before the planning and at the present
..................................................................................................................................... 51
Table 5-23: Classification of household's house types before the planning ............... 53
Table 5-24: Public service access by households before the planning ........................ 53
Table 5-25: Price of one kilowatt of electrical power ................................................. 54
Table 5-26: Types of constructed house at the present.. ............................................. 54
Table 5-27: Area of house before the planning/at the present.. ................................... 54
Table 5-28: Average distance to public service systems ............................................. 54
Table 5-29: Saving and livestock value of household before the planning/at the
present .......................................................................................................................... 55
Table 5-30: Household's loan access before the planning/at the present.. .................. 55
Table 5-31: Household's loan sources before the planning/at the present .................. 55
Table 5-32: Loan using before the planning ................................................................ 56
Table 5-33: Loan using at the present.. ........................................................................ 56
Table 5-34: Friendly level of neighbours .................................................................... 57
Table 5-35: Security condition level.. .......................................................................... 57
Table 5-36: Social environment before the planning/at the present ............................ 57
Table 5-37: Organizations/Associations before the planning/at the present ............... 58
Table 5-38: Member of social organizations before the planning/at the present ........ 58
Table 5-39: Age of household head in the sample at the present ................................ 59
MDE- Class 13
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Determinants of Households' Income in Planned Areas
Table 5-40: Classification of average age of household members at the present.. ..... 59
Table 5-41: Household size ......................................................................................... 59
Table 5-42: Average education of household members at the present.. ...................... 59
Table 5-43: Education in observed households at the present ..................................... 60
Table 5-44: Composition of household at the present.. ............................................... 60
Table 5-45: Annual expenses of households before the planning/at the present ......... 61
Table 5-46: Detail of annual expense before the planning/at the present.. .................. 61
Table 5-47: Comparison of household annual expenses ............................................. 61
Table 5-48: Income sources of surveyed households .................................................. 63
Table 5-49: Annual farm-based income before the planning/after displacement/at the
present .......................................................................................................................... 64
Table 5-50: Household aggregated income ................................................................. 65
Table 5-51: Trends in proportion of farm-based income ............................................ 65
Table 5-52: Household's non-farm income before the planning/after resettlement /at
the present .................................................................................................................... 66
Table 5-53: Descriptive statistics of proxy variables before the planning .................. 68
Table 5-54: Regression results of econometric model before the planning ................ 68
Table 5-55: Descriptive statistics ofproxier variables after resettlement ................... 70
Table 5-56: Regression results of econometric model after resettlement.. .................. 71
List of Figures
Figure 3-1: Conceptual framework for the empirical study ........................................ 12
Figure 4-1: Administrative map of Ben Cat district .................................................... 23
Figure 4-2: Location map of My Phuoc downtown .................................................... 23
Figure 4-3: Double market (Chq Doi) ......................................................................... 28
Figure 4-4: Silent professional school in My Phuoc IP ............................................... 29
Figure 5-1: Resettled house border with the cattle cage of Uncle Pham Van Hai ...... 34
Figure 5-2: Cattle freely on non-using resettled land .................................................. 34
Figure 5-3: Recruitment information pasted on the gate of a company ..................... 35
Figure 5-4: Villa of Mr. Pham Van Tru with motorbike mend panel in the front ....... 38
Figure 5-5: Internet Shop of a displaced household ................................................... 38
Figure 5-6: Chain of rooms for lease of a resettled household .................................... 40
Figure 5-7: Old lady Nguyen Thi An keeping a herd ofcattle ................................... .41
Figure 5-8: Chart of compensation expenses ............................................................... 45
Figure 5-9: New house of the most successful displaced household ........................... 50
Figure 5-10: Average education of household members at the present ....................... 60
Figure 5-11: Trends in household income sources ...................................................... 64
Figure 5-12: Trends in average annual income ofhousehold ...................................... 67
MDE- Class 13
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Determinants of Households' Income in Planned Areas
Chapter I
1.
Introduction
1.1.
Problem statement
The centrally planned economy led Vietnam into deep socio-economic crisis and
serious food shortage in the beginning of 1980s. In attempting to get the country out of
its difficult situation, in 1986, the Vietnamese Communist Party (VCP) and the
government of Vietnam decided to implement radically innovative reform, known as
"Doi Moi'' reform towards a market-oriented economy. As a result, Vietnam's economy
has significantly improved and a lot of bright achievements. Economy has grown over
7% per year in the 90s and it still continues to present. The economic growth has
improved living standard of people, significantly; GDP per capita rising from under 100
USD per year in the early of 1990 to over 800 USD per year in 2007 (WEO 2008).
The industrialization and urbanization process in line with economic reforms has
been taken place throughout the country. As a consequence, a large area of farmland is
converted into non-agricultural land for expansion of urban areas, industrial zones, and
infrastructure. Thanh· (2007) asserts that more than 73,000 hectares of farmland was
annually converted for expansion of industrial clusters and parks, urban areas and
infrastructure development. Particularly, in the period of 2001 - 2005 land conversion
has suddenly increased, approximate 360,000 hectares of farmland were shifted into
non-agricultural land in the whole country.
Vietnam is a country with 75 percent of its population living in rural areas (Dower
2004:4). Their life and livelihoods are heavily relied on agriculture or at least
agriculture - related activities. Land is, therefore, one of the most valuable assets to
farm households, particularly the poor. It is not only the primary means for generating
livelihoods, but also the vehicle to accumulate capital and transfer it between
generations (Moore 1999:3). Therefore, land recovery by the government for
industrialization and urbanization process has strongly affected the life and livelihood of
farm households in planned areas. Empirical evidence suggests that one hectare of
farmland converted into non-agricultural land leads ten farmers to be jobless. As a
MDE- Class 13
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Determinants of Households' Income in Planned Areas
consequence, millions of those whose land recovered for industrial, urban and
infrastructure development have become no career since adopting economic reforms in
1986 (Nga 2007).
Binh Duong is one of leading provinces in the industrialization and urbanization
process in Vietnam. The first industrial park of the Southern provinces was founded in
Binh Duong province in 1995. Currently, Binh Duong has 25 operating industrial
clusters and parks with over 12,135 hectares (ICBD 2009). The industrialization and
urbanization process has significantly stimulated local economic development. Binh
Duong province's GDP has annually grown over 14 percent and GDP of industry has
grown over 36 percent annually, on average in a period of 1997- 2004. Moreover, the
industrialization process has offered dozens of thousands of jobs to local people and
migrant workers from other provinces (ICBD 2008). The fast industrialization and
industrialization has caused thousands hectares of farmland converted in a period of
2001 - 2005. Of which, converted land was used for Industrial Parks (excluding
resettlement areas) until September, 31st 2005 approximate 2,500 hectares (author
summed areas of nine operating Industrial Parks). Consequently, thousands of farm
households lost their farm land.
Farmland recovery for non-agricultural purposes has led those displaced farm
households have to adjust partly or even totally their livelihood activities. However,
many displaced households have faced serious challenges in making their livelihoods in
new economic and living environment since most of them have traditionally based
agriculture, rural culture and living style, have low education and lack of skillfulness in
economic activities other than agriculture. Binh Duong is claimed as one of the most
successful localities in solving the compensation and resettlement for farm households
in planned areas; especially, land recovery and compensation for My Phuoc Industrial
Park project was recognized as the most successful one in Binh Duong in terms of
recovery progress, compensation and resettlement. However, as empirically observed,
displaced people seem to be very hard while seeking their livelihoods in the new living
environment
Although, the impacts of land recovery and resettlement on displaced people's
livelihoods have been widely discussed in daily rumors, newspapers, magazines, few
empirical studies on this issue have not been done. In addition, comprehensive studies
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Determinants of Households' Income in Planned Areas
on displaced farm households' livelihoods are very rare up till now. In order to enrich
both theoretical and empirical knowledge on impacts of industrialization, urbanization,
land recovery, compensation and resettlement on resettled farm households' livelihoods
and recommend to policy makers strategies to resolve problems created by such policies
and development process, this work will take land recovery for the development of My
Phuoc Industrial Park as a case study. The research aims at comparing and analyzing in
detail impacts of industrialization and urbanization progress; more precisely the impacts
of land recovery and resettlement displaced farm households' livelihoods in My Phuoc
planned areas by relying on Sustainable Livelihood Framework that developed by DFID
(2001). Besides, I attempt to simulate an econometric model that demonstrates the
relationship between livelihood assets and outcomes of households in the planned area.
1.2.
Objectives of the study
The study has both conceptual and practical relevance:
1. It is to understand the development process of industrialization and
urbanization in Binh Duong province in general and farmland conversion in
particular;
2. It is to have a precise insight on the implementation process related to
recovery of land, compensation, subsidy and resettlement in Binh Duong
province (a case of My Phuoc downtown);
3. It is to describe, analyze, compare livelihoods, livelihood assets and outcomes
of households in planned areas before and after the recovery of land,
compensation, subsidy and resettlement;
4. It is to assess impacts of the recovery of land, compensation, resettlement and
subsidies policies having on livelihood assets and outcomes ofhouseholds.
As these objectives are fulfilled, this work aims at achieving the two following
basic objectives:
1. Major policy themes related to land recovery, compensation, resettlement and
their impacts on farm households' livelihoods in planned areas will be
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Determinants of Households' Income in Planned Areas
recommended to policy-makers to construct more effective and flexible policies
and programs on the mentioned issues.
2. Findings from this work will contribute to the growing discussion on the field
related to land recovery, compensation, resettlement and their impacts on farm
households' livelihoods in planned areas
1.3. Research questions
1. How does the policy of land recovery, compensation, subsidies and resettlement
implement in Binh Duong province, particularly in My Phuoc Downtown?
2. What are livelihood patterns of households in planned areas before and after
implementing land recovery and resettlement?
3. What impacts do land recovery, compensation, subsidies and resettlement have
on livelihood assets and outcomes of households in planned areas?
1.4. Outline of the thesis
The thesis is divided into six chapters. The introductory chapter comprises of
problem statement of the study, objectives of the study and research questions.
Chapter II begins with some definitions and terminologies ofVietnam's Land Law
1993 and 2003 about land ownership, land allocation, land use rights, land price, land
recovery and resettlement. The next section reviews empirical studies of land recovery,
resettlement and their impacts on displaced farm households' livelihoods.
Chapter III reviews research methodology used for the analysis throughout this
work. It begins with first section including analytical framework and econometric
framework of the study. The last section mentions about selection of study site, unit of
analysis, data sources, data collection techniques and methods to analyze collected data.
Chapter IV, in first two sections, presents the industrialization process of Binh
Duong province and the background of My Phuoc downtown. Next two sections
mention about regulations of Vietnam on land recovery and resettlement, and policies of
land recovery and resettlement of My Phuoc Industrial Park project. The last section
MDE- Class 13
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Determinants of Households' Income in Planned Areas
discovers the implementation of policies of land recovery and resettlement in My Phuoc
downtown.
Chapter V presents findings of the study, it includes five sections. The first section
describes household's livelihood patterns in planned areas through three different
periods: before land recovery, right after resettlement and at the present. The second
section analyzes compensation implementation and the ways in which displaced
households used their compensation. The third section describes five livelihood assets
(natural, physical, financial, social, and human) of displaced households before the
planning and at the present. Next two sections present about expenses and incomes of
displaced household before the planning and at the present. And final section shows the
determinants of households' income in two periods, before the planning and after
resettlement.
Chapter VI summarize the findings of the study and recommends some policies
implications which drawn from the research results.
MDE- Class 13
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Determinants of Households' Income in Planned Areas
Chapter II
2.
Literature Review
This chapter presents some terminologies and empirical studies ofland recovery,
resettlement and its impacts on displaced farm households' livelihoods.
2.1
Definitions and terminologies
2.1.1 Land ownership
"Land is the property of the entire people, uniformly managed by the State"
(Vietnam's Land Law, 1993). The 2003 Land Law of Vietnam re-defined: "Land
belongs to the entire people with the State as the representative owner".
2.1.2 Land allocation
"The State shall allocate land to organizations, households and individuals for
stable and long-term use" (Vietnam's Land Law, 1993). The 2003 Vietnam's Land Law
re-confirmed: "Land allocation by the State means the grant of land use rights by the
State by way of an administrative decision to an entity which has requirements for land
use".
2.1.3 Land use rights
Vietnam's 1993 Land Law regulated: Certification of land use rights will be
granted to those who are using land on a stable basis which is certified by the People's
Committee of rural, urban communes and commune towns. Household or individual,
who were land owner, can exchange, transfer, inherit, or mortgage the land use right.
Vietnam's 2003 Land Law adjusted the land use right more detail: Land owners may
exercise the right to exchange, assign, lease, sub-lease, bequeath and donate land use
rights; right to mortgage, guarantee and contribute capital using land use rights; and
right to be paid compensation when the State recovers land.
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Determinants of Households' Income in Planned Areas
2.1.4 Land price
Provincial authorities launched decision which regulated land price in province
and this price was used to compute: transfer tax; fees of land using, land leasing;
compensation price when the State recover land for goals of military, security,
development, national benefit; ... Compensation land price for displaced households in
My Phuoc downtown based on the frame of land price of Decision no. 24/1999/QD-UB
(dated 06/03/1999) of People's Committee ofBinh Duong Province.
2.1.5 Land recovery and resettlement
- Land recovery means "the issuance by the State of an administrative decision
to recover land use rights or to recover land which has once been allocated to economic
entities such as individuals, households, economic organizations, etc." (Vietnam's 2003
Land Law). Land often is recovered for objectives of national defense and security,
national interest, public interest, or economic development.
- Recovered land's compensation: Decree No. 2211998/ND-CP of Vietnam's
Government stated a principle: people, who have recovered land, will be compensated
money or house or new land. Decree No. 197/2004/ND-CP, an upgraded of Decree No.
22/1998/ND-CP, regulates more detail: "Persons who have land recovered shall be
compensated with new land having the same using purpose; if there is no land for
compensation, they shall receive compensation equal to the land use right value at the
time of issuance of the recovery decisions; in case of compensation with new land or
houses, if there is any difference in value, such difference shall be paid in cash."
- Resettlement means policies of compensation, relocation, assistance are
provided by the State (or the organization who using the recovered land) to displaced
people, who have recovered land (Vietnam's Land Law 2003). The resettlement policies
for displaced farmer's households after land recovery often circle these modes: cash
resettlement, employment resettlement, farming resettlement, land reallocating
resettlement, housing resettlement, and social insurance resettlement (ADB 2007).
However, Decree No. 197/2004/ND-CP of Vietnam's Government just regulates three
cases of resettlement: dwelling houses resettlement, new residential land resettlement
and money for acquiring new residences resettlement. Beside that, it also mentions four
others subsidy and compensation policies, they are: a) compensate or support whole
MDE- Class 13
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Determinants of Households' Income in Planned Areas
recovered land, b) compensate or support all assets linked to recovered land and
invested cost in the land, c) support for: moving, stabilization of living, training and
transfer job, ... d) support for stabilization of production and life of displaced people in
resettled area.
2.1.6 Livelihoods
Livelihood is "a mean of gaining a living". "A livelihood comprises capabilities,
and mean ofliving, including food, income and assets" (Chambers and Conway 1991).
Ellis (2000) suggests a more elaborate definition, that is, "A livelihood comprises the
assets (natural, physical, human, financial, and social capital), activities, and the access
to these (mediated by institutions and social capital) that together determine the living
gained by an individual or households".
2.2
Empirical studies of land recovery, resettlement and its impacts on
displaced farm households' livelihoods
During the last two decades of the 20th century, about 10 millions people per
year in the world were displaced and resettled due to development projects such as:
industrial parks, irrigation, transportation highways, power generation, urban resident
areas ... (Cernea 2000: 11). In China from 1993 to 2003, about 1.7 million hectares of
cultivated land were converted into non-farming use purposes and this impacted to
approximate 3.3 million farmers, annually.
Farm households in planned areas was recovered all or partly of their farmland,
a main asset on which their livelihoods are generated. Regularly, if investors or
Governments take land from farmers, they must have some resettlement policies such
as: cash resettlement, farming resettlement, vocational training programs to help
displaced households rehabilitate their livelihoods. However, resettlement policies
applied by the authorities still have some limitations and negative effects. For example,
cash resettlement is easy to manage and often is accepted by displaced farm households.
But, it only suited to young people and farmers who are working out of horne and was
not suitable to groups of above 45 years old or who are low skill labors, it is rather
difficult for these farmers to seek job by themselves (ADB 2007). Besides, the efficient
of vocational training courses and new job introduction services to support land loss
farmers still is a big problem. Most of displaced households are farmers and low
education, so they have a limited to perceive and compute for their future. Just few
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Determinants of Households' Income in Planned Areas
households invest in training alternative jobs after resettled. Many displaced households
did not use the huge compensated money in a proper way, they used such money to
build new and expensive house, equip luxury electric appliances and vehicles (Quang et
al. 2005, Nang 2006, Sen 2007). In the near future, these households certain faced
difficult situation when the compensation money was exhausted.
According to recent study of Sen, although displaced households received
compensation, assistance and subsidies from investors or the government, but
proportion of resettled people being jobless and having unstable jobs is still very higher,
occupying over 615 respondents or 44.5 percents of sample (Sen 2007). Free time of
displaced people increases sharply in Vo Que district (Bac Ninh province, Vietnam) due
to industrial zone development, it is higher 50 percents of working time fund, especially
in young labors force (average age is around 26 years old) (Tho 2006).
Land recovery caused losing household's productive assets o, such as farmland,
common property resources, jobs, community articulation and the changing of culture
living (Webber and Mcdonald 2004). It also created several impoverishment risks for
land-loss farmers: income reduction, employment difficulty, poor long-term livelihood
guarantees. Cernea (1995: 251) shows that displaced people will loss some principal
capitals such as: natural capital, man-made capital, social capital, human capital. The
farm production and income of displaced households is major impacted by land
recovery and resettlement. The household's income reduces significantly after the
resettlement (Syagga & Olima 1996, Webber & Mcdonald 2004, ADB 2007). Many
displaced households have difficulties in rebuilding livelihoods because of the lack of
access to common household capital and limited farmland (Heming et al. 2001 ).
Especially, a proportion of displaced farm households are in a "four-no" status - no
land, no job, no security, and no capital for establishing business. Only a half of them
can be transferred to non-farming employment (ADB 2007).
Land recovery leads to the gradually shifting of laborers to non-farming sector.
However, most of them just to be employed in fields which require a relative low level
of education and skills and to be laid off easily due to poor adaptability after a short
period (ADB 2007, Phong 2005). The sharp reduction of cultivated land and the
weakness of industrial foundation lead to the serious surplus of rural laborers. Female
employees in displaced areas are impacted firstly because most of them are farmers, not
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Determinants of Households' Income in Planned Areas
well educated and just do domestic works, so they face more difficult if leave their
home to find non-farming jobs (Shaoquan et al. 2004).
After land recovery, people who were relocated into new farmland will face less
changing in their livelihoods. However, in industrial planned areas, displaced people
received often compensated money, resettled residential land or new house. They had
no farmland after resettlement. Therefore, livelihoods of these affected households were
very differing with the prior situation; they had to adopt non-farm livelihood strategies
and urban living style. In developed areas, some affected households used remain
compensation money to build flats for renting, or run small shops, or to buy vehicle
engage transportation (Sen 2007, ADB 2007). The highest second proportion of
households in the study of Nang (2006) deposited remain compensated money in the
bank and received the return of interest rate or withdrew a proportion of the deposit
monthly for their daily spending. Price of goods in planned areas often increases after
land recovery due to reduce cultivation land areas. Therefore, displaced households in
slowly developed areas will face more difficult, livelihoods is lack and poor while they
have to spend at high price for everything, from water, electricity, coal to food, farm
products (such as: rice, vegetable, ... ) (ADB 2007). Some people had to migrate to find
job after land recovery.
Many empirical studies show various reasons that rural households often
diversify their livelihoods, simultaneously participate in more than one income earning
activities. However, Adi (2007) used simultaneous equation model suggested by Smith
and Blundell (1986) to estimate the probability of participating in non-farm or nonagricultural activities of households, and come to conclude that, despite of high
incidence of diversification, agriculture still is highly significant to households'
livelihoods in rural communities of Eastern Nigeria. Schwarze (2004) also have some
major results after a quantitative study in Central Sulawesi (Indonesia), non-agriculture
activities play an important role in rural livelihoods but households' livelihoods
principally depend on agriculture activities which generate about 70 percents of the total
household income. Therefore, lost whole of cultivated land and have to adopt nonagriculture livelihoods are a big leap or shock with displaced farmers. The lack of
efficient vocational training programs and social insurance for displaced people who are
old or do not meet the demand of industrial jobs is one of the foremost causes of
poverty because of land recovery and resettlement (ADB 2007).
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