First, poverty remains widespread in the new economies in transition-Cambodia, Lao PDR, Mongolia, and Vietnam. Second, there is a growing concentration of poverty among specific groups in middle income countries such as Indonesia, the Philippines, and Thailand. Third, some countries have experienced large increases in inequality, with potentially serious implications for the perceived fairness of the economic system, as well as for future growth rates. Moreover, in light of the recent turbulence in exchange and financial markets in the region, there is concern that any negative impact on growth rates could translate into slower progress in reducing poverty. Poverty Profile Rural areas have substantially higher incidence of poverty than urban areas-in Indonesia, the Philippines, Vietnam, and Lao PDR, poverty is twice as high in rural areas than urban, and almost 90 percent of the poor in Vietnam and Lao PDR live in rural areas.
Regional variations are also significant.
Education is a strong correlate of poverty throughout the region-lower education reduces earnings and increases vulnerability to poverty, thus reducing a household's ability to educate its children. Children living in poorer households have lower primary and substantially lower secondary enrollment rates. Agricultural households face a higher risk of poverty than any other occupational group, with the share of poor who live in agricultural households correspondingly high-60 percent in the Philippines, and 76 percent in Thailand and Vietnam. Ethnicity can be linked to poverty in certain countries in the region, such as Vietnam and Malaysia. In Vietnam, for example, poverty incidence is substantially higher among the non-Chinese ethnic groups.