ABSTRACT
Trade liberalisation stimulates economic growth, and that economic growth in turn benefits everyone in the economy, including the poor. This is one of the major pathways through which trade liberalisation affects poverty. Historically, trade liberalisation was considered to be an engine of growth for many countries, especially developing countries. Vietnam attained remarkable achievements in economic growth and poverty reduction after transforming a centrally planned economy into an open market economy in 1986. High economic growth in the 1990s and the 2000s appears to have contributed to the substantial reduction in poverty over the two decades in this country. Although several other countries also achieved high economic growth and reduced poverty considerably, the relationship between trade liberalisation and poverty has been far from confirmed. The persistence of poverty amongst a considerable proportion of people in the transitional or liberalised developing economies also calls into question the impacts of trade liberalisation on poverty in reality. In fact, the context of trade policy in a country is important to understand its impacts. The focus of recent research on the relationship appears to have shifted to examining the impacts at the microeconomic level.
