Hanoi’s trade villages expanding: capital and raw material
Hanoi’s trade villages expanding: capital and raw material

(Hương Dung - the New Hanoi newspaper - 25/08/2008) – Since August 1, Ha Tay province joined with Hanoi, which creates a city of the biggest nest for trade villages. It’s the good way for labor problem, however, it make villages face with costs and high spending.

Losing job due to material shortage

Mr. Nguyen Van Tai, director of Liep Tuyet Private Enterprise whoproduce and trade rattan & bamboo products from thousands of labors inside and outside Quoc Oai district, households and enterprises are facing problem of raw material and capital

shortage. Material price of bamboo & rattan have been increasing quickly, about 30-50%, some increased 100% compared to price in 2007, while it’s hard to negotiate higher export price.

Due to material shortage, the company have to collect materials from Son La, Lai Chau provinces… with higher transport costs. According to Mr. Do Lai Luat, leader of Quoc Oai’s Department of Industry and Trade, the material shortage does not only make production slackness, but also causes the disappearing of some villages, as the Nghia Hung bamboo mat weaving village, Tan Hoa and Cong Hoa starch processing villages…

According to Mr. Pham Van Khanh, Tien Dong Co., Ltd’s Director (cum chainman of Ha Tay Bamboo and Rattan Association), the banks have tighten finance policy which is necessary for inflation restrain but it cause bad effects for the development of craft villages as the lack of capital, high interest rate, production slow down, thousands of workers do not have job. Currently, enterprises are trying to accept lost in order to keep customers and get job for workers, but they can not suffer in a long term.

1 million people are threaten to lose their job.

One of the main reasons to support craft villages because they create a great number of job for villagers, especially for those whose land were revoked, it also contribute to stabilize social order and pushing the land clearing process for projects. Ha Tay province (Hanoi now) now has a lot of transportation & urban development projects with thousands hectare will be revoked. From now to 2010, Quoc Oai district will converse 4,500ha of agricultural area (among total of 7,200ha) to urban land and non-agricultural land, 7/20 of communes will have no more agricultural land.

Thach That district also revoke more than 3,000ha, in which about 2,000ha are agricultural land of 20,000 households (equivalent to 400,000 labors), about 10,000 households will have no cultivation land. Ha Dong city and other districts are also in the same situation, therefore, job creation is the most important issue. According to the Department of Industry and Trade of Hanoi city, Ha Tay province has 1,180 craft villages among 1,460 villages, which contributes 35% of total value of small scale industry, 60% export turnover and creates job for more than a million people. Therefore, strengthening craft villages also means strengthening jobs for more than 1 million labor as well as stabilization social order.

Supportive policies are in need

According to Mr. Do Lai Luat, the leader of Quoc Oai district’s Department of Industry and Trade, people can see the value of craft villages because it contributes to 70% of total villagers’ income. However, local government doesn’t have strong supports for craft villages, especially, the material planning areas for craft villages was not yet paid attention.

According to Mr. Nguyen Van Thi, vice-director of Social and Policy Bank, there are 7 preferential credit programs, among which 2 programs relates craft villages: job creation and SME assistance, but the fund source is very limited. In 2008, the bank was added only VND 4.5 billions the first program, but none to the other.

In reality, from Jan to June 2008, it has only 4,135 turns of craft villagers could borrow money (less than 10% of total clients of the bank) with 68.2 billion. These two programs are limited by the amount (maximum 500 million/ project), short period of time, long time for procedures,

Investment & Development Bank also lend money to direct export enterprises but only 4 were successful in borrowing money with total fund of more than VND 10 billions. Therefore, craft villages has little benefit from this supportive programs.

In fact, when discuss with enterprises that are the leader points of craft villages, they agree to anti-inflation programs of Government, but the Government should have supportive policies for craft villages.

Mr. Pham Quoc Khanh, chairman of the Bamboo and Rattan Association, craft villages in Vietnam faced severe difficulties when the Eastern market were disappeared, so we must invest more money and time to recover them. The Government should set up supportive .

 
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