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Natural disasters and rural Vietnam: Estimations and forecasts

The results reveal that disasters have different impacts on different sectors of the rural Vietnam with agriculture suffering the heaviest losses, fishery second, and forestry suffers the least. We then analyze the effects of reforestation as a disaster prevention measure and provide forecasts on the forest development in Vietnam. | Tam Bang Vu & Eric I. Im. Journal of Economic Development 22(1), 42 – 61 42 Natural Disasters and Rural Vietnam: Estimations and Forecasts TAM BANG VU University of Hawaii-Hilo, tamv@hawaii.edu ERIC IKSOON IM University of Hawaii-Hilo, eim@hawaii.edu ARTICLE INFO ABSTRACT Article history: Using disaster data from the emdat.be website and data for six regions in Vietnam, this paper investigates the impacts of natural disasters on the gross product per capita of the three rural sectors that have been affected the most by disasters―agriculture, fishery, and forestry―over the period 1995 to 2013. The preliminary tests reveal endogeneity and contemporaneous correlations among these three sectors. Hence, a combination of instrumental variable (IV) estimations and system seemingly unrelated regressions (SSUR) are employed. The results reveal that disasters have different impacts on different sectors of the rural Vietnam with agriculture suffering the heaviest losses, fishery second, and forestry suffers the least. We then analyze the effects of reforestation as a disaster prevention measure and provide forecasts on the forest development in Vietnam. Received: Dec. 10 2014 Received in revised form Dec. 21 2014 Accepted: Dec. 30 2014 Keywords: Vietnam, natural disasters, rural areas, deforestation, reforestation. Tam Bang Vu & Eric I. Im. Journal of Economic Development 22(1), 42 – 61 43 1. Introduction The economic reform in Vietnam has brought on rapid economic development in rural Vietnam. Together with the positive impacts such as higher GDP per capita, infrastructure and human capital improvements, and access to new technology, are a host of negative effects, including deforestation and pollutions that cause suffering for most residents, especially the ones who live in the remote areas. To some extent, the negative consequences of disorganizing development exacerbate the negative impacts of natural disasters on rural production. This paper looks into the .