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Trade villages drowning
The high inflation rate in 2008 has been pushing a lot of trade villages under with no sellers and very few buyers. Lots of tradesmen have abandoned their jobs, while lots of production establishments have shut down.
It is estimated that there are 1.4mil households in rural areas with 11mil labourers working in 2,000 trade villages throughout the country.
Trade villages miserable
Phan Dinh Luong, Deputy Chairman of the Dong Quang Commune People’s Committee, complained that Dong Ky Trade Village, which is famous for woodworks, has not exported any container of goods so far this year.
Luong said that most workshops have shut down, while some others are only maintaining moderate production. Storage houses now are full of unsold products.
“Dong Ky has never been as miserable as nowadays,” Luong said, adding that in previous years, it got the average turnover of VND270-300bil, a sum of money which is equal to the budget of a mountainous province in the northwest. In its hey-day, the village had 200 private enterprises and thousands of woodwork traders. 70% of products made by the trade village were exported.
Eight of 27 communes in Nga Son district in Thanh Hoa province specialised in sedge production. Over 56,000 local residents earned their living from sedge mats which were exported and consumed domestically.
In previous years, the trade village got the turnover of VND150-160bil a year. However, Nga Son’s sedge production has been falling since the end of 2007. Sedge has become unsalable, while the prices have been dropping dramatically to VND800/kg from VND3,500/kg. It is because there is no market for Nga Son sedge, while commodity prices have been skyrocketing, pushing farmers against the wall.
Seeking the way out
In 2007, Vietnam got $850mil from the export of handicrafts made by trade villages. The Ministry of Industry and Trade then forecast that exports would reach $1bil this year, an increase of 35%. However, it is clear that the targeted export turnover has gotten further away.
Nguyen Thanh Binh, the owner of a private-owned enterprise in Dong Ky trade village, said that the biggest problem now of trade villages is that products can neither be exported nor sold domestically.
Binh said that high inflation has been making everything worse. As everything has been going up in price dramatically, owners of workshops earlier this year tried to spend money to buy materials in large quantities. However, now they cannot sell products and wood materials are left unused.
Nguyen Luc, a representative of the Vietnam Trade Village Association in HCM City, said that Vietnamese trade villages are lacking three things: workshop premises, capital for investment and market information.
Trade villages have been swimming hard but they are in danger of drowning.
VNN
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