UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM- NETHERLANDS PROGRAMME FOR M. 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 I HO CHI MINH CITY, OCTOBER 2009 UAN VAN CHAT LUONG download : add luanvanchat@agmail.co UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM- NETHERLANDS PROGRAMME FOR M. 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 UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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. 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.
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. UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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 UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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 lll UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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 IV UAN VAN CHAT LUONG download : add luanvanchat@agmail.co Determinants of Households' Income in Planned Areas Contents Acknowledgements.
v List of Tables .vii List of Figures. Objectives ofthe study. Outline of the thesis .1 Definitions and terminologies .3 Land use rights .5 Land recovery and resettlement .2 Empirical studies of land recovery, resettlement and its impacts on displaced farm households' livelihoods. Analytical framework of the study.
Econometric framework ofthe study. Data collection and analysis .1 Selection of study site .2 Unit of analysis .3 Data sources and collection techniques. Description of Study Area. 22 MDE- Class 13 v UAN VAN CHAT LUONG download : add luanvanchat@agmail.co Determinants of Households' Income in Planned Areas 4.1 Industrialization progress ofBinh Duong province .2 Background of study site (My Phuoc downtown) .3 Regulations of Vietnam on land recovery and resettlement.4 Regulations of land recovery and resettlement of My Phuoc Industrial Park project .5 The implementation of policies of land recovery and resettlement in My Phuoc downtown.
Displaced Households' Livelihoods .1 Household's livelihood patterns .1 Households' livelihood patterns before land recovery (Year 2000) .2 Patterns of household's livelihood right after resettlement .3 Current patterns of households' livelihood .2 Compensation and compensation using .1 Income sources and income calculation method .2 Trends in household income .6 Results ofthe econometric analysis .1 Determinants of households' income before the planning .2 Determinants of households' income after resettlement .1 Conclusion and recommendations. 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).
85 MDE- Class 13 Vl UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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 Vll UAN VAN CHAT LUONG download : add luanvanchat@agmail.co 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 .