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Regional approach to developing industrial clusters and poverty reduction: A case study of Vietnam

This paper aims to develop a framework for a regional approach identifying the connections from rural areas to urban areas and growth centres, and clusters’ impact on poverty reduction. | VNU Journal of Economics and Business Vol. 29, No. 5E (2013) 1-15 Regional Approach to Developing Industrial Clusters and Poverty Reduction: A Case Study of Vietnam Nguyễn Quốc Việt1,* Nguyễn Minh Thảo2 1 VNU University of Economics and Business, 144 Xuân Thủy Str., Cầu Giấy Dist., Hanoi, Vietnam 2 Central Institute of Economic Management, 68 Phan Đình Phùng, Ba Đình Dist., Hanoi, Vietnam Received 16 April 2013 Revised 15 May 2013; Accepted 30 December 2013 Abstract: This paper aims to develop a framework for a regional approach identifying the connections from rural areas to urban areas and growth centres, and clusters’ impact on poverty reduction. We identify cluster development opportunities in different regions of Vietnam to create a pro-poor impact, in rural areas that otherwise have been marginalised from economic growth; this could include key pro-poor commodities and job generating industries and services. By regional approach, the paper maps growth centres and connect poor rural areas that can benefit from cluster development. Using three case-studies of Vietnam, we recommend a number of regional policies that would promote pro-poor growth and achieve poverty reduction from spillover effects from urban centres as well as identify investment types for linking rural development with urbanisation and towns, based on cluster initiatives. Keywords: Cluster, regional development, poverty reduction. 1. Introduction * economic growth is arguably the main driver of rapid poverty reduction in Vietnam. Vietnam’s poverty reduction and economic growth achievements in the last ten years are one of the most spectacular success stories in economic development. The scale and capacity of the economy have increased continuously, with GDP growth of about seven per cent on average. The economic structure of Vietnam during last ten year was relatively stable, with adjustment in a reasonable tendency from agriculture to industry and service. Rapid Vietnam is .