A relevant context for developing and testing a comprehensive vulnerability framework is found in the newly emerging market economies of South East Asia. In spite of their success in economic growth, in many cases these countries are still faced with a high degree of regional disparity in income and wealth and they show patches of deep poverty and high levels of vulnerability, mostly in the rural part areas. Thailand and Vietnam are two countries that fall into this category. In Vietnam the poverty rate fell from over 70% in 1990 to 32% in 2000 as a consequence of strong economic growth. In Thailand poverty has fallen from a level of almost 40% during the mid eighties to about 15% at the turn of the century.

However, persisting regional disparities in the distribution of wealth disturbs the generally positive picture in the development of these two emerging Asian economies. People living in remote rural households have benefited proportionately less from the high average growth performance. More severely, these people are most vulnerable to the impact of various economic, ecological, and political shocks such as, for example, a drop in the price of an agricultural commodity (e.g. coffee in Vietnam), large-scale pest outbreaks (golden snail and brown plant hopper in Thailand and Vietnam), financial crises (see below), or epidemics like the avian flu, SARS, and natural disasters such as the recent tsunami. The number, extent, and impact of especially macro shocks have increased considerably in recent years. Such events are adding further burdens to the lives of poor people who are also frequently confronted with idiosyncratic shocks such as unemployment, illness, or death of family members or the household head. Therefore, shocks can drastically upset the process of economic growth and cause those who had already escaped poverty to fall below the poverty line again.