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Traditional craft villages face bankruptcy
The global economic crisis has put thousands of household businesses in craft villages in Viet Nam on the brink of bankruptcy.
The Ministry of Agriculture and Rural Development (MARD) reported that nine craft villages, 2,166 households trading craft products and two businesses have gone bankrupt since March this year.
They include Buoi village that used to make do paper, the painting village of Kim Hoang, the pottery village of Trieu Khuc in Ha Noi, the shoe-making village of Chi Long and the porcelain and pottery village of Huong Canh in Vinh Phuc province.
Craft villages and businesses around the country have had to reduce their production scale, reported MARD at a conference on the development of traditional craft villages held last Sunday in central Thua Thien-Hue province.
Lien Minh, a senior official from the ministry, explained that because of unplanned and haphazard development, 80 per cent of the country’s craft villages lack funds for acquiring equipment and technologies.
Their products, therefore, lacked quality or uniformity, he said, adding around 35 per cent of rural handicraft makers had also had to cut back on production due to a shortage of raw materials.
"Since late 2008, craft villages have faced myriad difficulties caused by impacts of the global economic decline such as a lack of capital, production materials and a shrinking consumer market," said vice chairman of the Viet Nam Association of Craft villages, Luu Duy Dan.
It is estimated that more than 50 per cent of craft businesses nationwide would collapse, causing job losses for around 5 million workers.
"Craft villages will suffer the most from the impacts of the economic crisis, which are home to household, co-operatives and small- and medium-sized businesses, not big businesses or corporations," Dan said.
Nguyen Van Do, director of the Hang Do Company which specialises in producing rattan and bamboo products in Ha Noi’s Chuong My district said: "The lack of market and credit limitations have severely hindered my company’s production and trade; thousands of workers involved with my company may lose their jobs this year."
The way out
In an effort to help craft businesses rise above their challenges, Minister of Agriculture and Rural Development Cao Duc Phat said the ministry would propose that the Government encourage banks to provide craft villages with preferential policies such as debt forgiveness.
The ministry would also speed up the planning for areas to grow more materials and encourage domestic consumption, he said.
Dan, of the Viet Nam Craft Villages’ Association, said: "Setting up a national committee for the sustainable development of craft villages and helping them function in the free market are urgent requirements."
He added that Government assistance recently helped revive many of the country’s 2,790 craft villages.
He hailed the Government’s efforts to promote trade and consumption and publicise the villages’ tourism potential as playing a crucial role in expanding markets and building a stable production base.
The association had also actively worked to help craft businesses improve product quality and models, as well as providing consultancy services on financial information and market expansion.
"The association will also help businesses to build their trademark and join trade promotion programmes to expand their markets and boost exports," he said.
"We also actively build relations with foreign organisations and associations and hold meetings and conferences for local businesses to boost co-operation with their foreign partners," he added.
Dan recommended that the Government simplify procedures to help craftsmen gain increased access to credit to buy materials and equipment to boost their production and competitiveness.
Viet Nam has nearly 3,000 craft villages, which employ more than 12 million workers and creates additional income for millions of rural families.
Made-in-Viet Nam handicrafts are sold to 120 countries and their export fetched US$750 million in 2007 and $1 billion last year.
VietNamNet, VietNamNews
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