The German Research Foundation (DFG) in Bonn, Germany in 2006 has awarded a special research unit to the Universities of Hannover, Göttingen and Frankfurt. The subject of the project is the analysis of the role of shocks and risks for the development of poor countries and emerging market economies. Central to the analysis of these factors is the concept of vulnerability. While numerous research papers have been produced on this subject, to date the concept of vulnerability still lacks a comprehensive and empirically well-founded framework in the development economics literature.

Target countries of this research are Thailand and Vietnam. These two countries were chosen because they offer excellent conditions to undertake such research as they have past (and current) experience with high rates of economic growth and success in poverty reduction. However, they have also suffered from various types of shocks and have implemented crisis response strategies. Both countries, although to different degrees, show a growing regional inequality with a persistence of “pockets of poverty”. Most importantly, in both countries a fair amount of secondary data is available and competent local partners assure high quality research and diffusion of results.

To advance the vulnerability to poverty concept the project follows an integrated approach. Through interconnected research in different fields of economics, the determinants of vulnerability are investigated. Five interlinked subprojects look at the role of macro and micro risks and shocks of vulnerability to poverty. Two sub projects, are so-called Base Projects. These two projects generate outputs which are needed by the three other subprojects. The latter projects deal with vulnerability from a sectoral and regional perspective.

Base project No. 1 “Vulnerability and household dynamics” develops the theoretical and conceptual base of the vulnerability to poverty concept in order to facilitate the establishment of a sound empirical base of the factors that determine vulnerability. Complementary to that the second base project takes charge of the collection and management of the vulnerability database including secondary and primary data. Base project 2 is adding a spatial dimension to the analysis. Building on the results of the other subprojects it will generate GIS-based maps of vulnerability for the six target provinces.

The three other projects deal with different aspects that play a role for vulnerability. They cover the field of (i) agriculture, (ii) financial institutions and (iii) regional economic development. In combination they provide the specific factors that influence vulnerability including macro and micro shocks specific to these fields. The subprojects will follow the theoretical concept outlined by project 1 and will make use of the database service function provided by project 2.

The project officially started in December 2006. Aside from preparatory activities, which included literature reviews, conceptual studies, preparatory visits and pre-tests the first major field activity of the research group was the conduct of a household survey in three provinces in Thailand and three provinces in Vietnam. In Thailand the survey has been conducted from 18 April to June 1, 2007. In Vietnam the survey started on June 12 and finished on August 6 in the provinces of Ha Thin and Hue and on August 20 in the province of Dac Lac.

To assess the status of the project and to report on the progress achieved so far a workshop will be conducted in Ubon Ratchathani, Thailand.

The workshop has the following objectives:

• To assess the project concept in light of initial empirical findings
• To update all subprojects on the conceptual basis for vulnerability
• To strengthen the cooperation between the German and the national research partners of the different subprojects
• To explore the possibility of including partners with additional research fields into the next phase of the project.
• To discuss research plans for the all subprojects (Ph D research and others)

The workshop will last for three days. It will comprise of scientific presentations, a field trip and discussion groups. The purpose of the presentations is twofold, first to update the research group on the state of the art of vulnerability to poverty research. Second to present some results of the secondary data analysis and to the extent possible a first analysis of the data collected from the HH survey. Most likely this will only be possible for the data collected in Thailand as the survey in Vietnam started late. On the second day the Ph D students will present their research plans, which will be subjected to intensive discussion. On the third day a field trip will be carried out visiting two villages that were included in the survey. Discussions with household members and village leaders can be conducted.