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Impacts of Price Hikes on the Lives and Livelihoods of Poor People in Viet Nam is 1.5 percent. Payment is made on a weekly basis which is appropriate for the members. At the end of the fifth year of operation, the repayment rate reached 95 percent. Overdue and bad loans account for five percent. Many poor migrant women, thanks to the loans provided by the programme, have been able to have a more stable life. A good example is Mrs Phm Th H, 32/1, Lê Đc Th road, Unit 2, ward 16, who has a family member living with HIV/AIDS. Her husband has died. Two of her children used drugs (one has also died) and two others are in school. She is struggling to feed the family by washing clothes for households in the community. After joining the credit group, she was able to get a loan of two million VND which she used to buy a washing machine to collect more clothes to wash. After having repaid the first loan, she decided to borrow a second loan of three million VND to buy a sewing machine and fabric to make clothes to sell to local stores. She has since taken a fifth loan from the programme of the maximum five million VND to invest in materials and tools. The life of her family has improved considerably. She has managed to buy a fridge, a TV, a gas cooker and pay for her children’s education. The Programme Management Board has had the following observations on the programme: • The provision of credit to poor migrant women and women in difficult circumstances has assisted the local government in improving the life of the local population in general and of poor women in particular. Women have also benefited from the opportunity to develop themselves and strengthen their status in the family and in the society. • The programme, with its simple lending procedures and appropriate interest rates and loan duration, has contributed to the reduction of informal loans at high interest rates (10-20 percent) and thus contributed to the control of complicated social problems associated with informal loans. • Apart from the delivery of loans, the district Women’s Union has also introduced acitivities such as communication and exchange of experiences in buidling happy families, health care, business skills and how to use loans effectively, all of which have benefitted participating women. • The programme has provided an alternative option for those who have difficulty accessing formal (Government) credit sources such as migrant workers, people in difficult circumstances, people involved in social evils, family members of people living with HIV/AIDS. Many women have managed to escape from poverty with loans from the programme and some have voluntarily resigned from the programme in order for poorer women to benefit from the programme. Despite these successes some ward authorities are reluctant to adopt and expand the programme on the grounds that the risks associated with the target beneficiaries may be high. Therefore in the programme’s operational regulations, there needs to be clear provision of the repayment failure rate. The policy on consessional loans (as per Decision 157/2007/QD-TTg dated September 27, 2007 of the Prime Minister) for poor/near-poor pupils and students and households in difficult circumstances has been welcomed. However, in such urban areas as Go Vap district, there remains a long waiting list of applications as the funds have not yet been made available for disbursement. The policy may need to be expanded to reach upper secondary school students in mountainous and EM comumes. 5.2.6 Vocational training The Government has introduced a policy of free vocational training for poor households and concessional loans for vocational trainees coming from poor households. However the number of poor/near-poor households benefiting from such a policy is very small. One of the main reasons is that the poor are more interested in short-term needs (“poor people are not able to plan ahead“). Free vocational training for the poor – a difficult puzzle to solve The Government has introduced a policy of free vocational training for the poor. Children of poor households can borrow concessional loans from the Social Policy Bank to obtain vocational training. Vocational training centres at the district level receives an annual budget from the Government to 76
Rising Prices, Poverty Reduction and Relevant Policies organize vocational training for the poor. In Hai Phong, for example, since 2007 DOLISA has an annual budget of 700-800 million VND to organize free vocational trainings for the poor. In additon, there is a budget of 1.5-2 billion VND for vocational training for farmers whose land has been recalled. In practice, the really poor people do not often participate in these trainings, nor borrow loans for training for their children. One of the main reasons is that they are busy making money to meet shortterm needs (“poor people are not able to plan ahead“) or they are afraid they will not find a job after training. For example, in Unit 25, ward 6, Go Vap district, no participants turned up for a free vocational training course. 5.2.7 Agricultural extension At the rural study sites agricultural extension workers have recommended measures to help farmers reduce costs and improve productivity as prices increase such as the “3 reductions, 3 gains” initiative; increased use of bio-fertilizer, inorganic fertilizer and single ingredient fertlizers instead of blended fertilizers; improve product quality (through collecting, semi-processing and sorting). However, the effectiveness of agricultural extension work is limited. In many places poor people are still not keen on extension messages. The linkages between processing enterprises and the extension system remains loose. The agricultural extension programme needs to be strengthened and the grassroots extension network to be developed in order to meet the needs of different target groups and help the poor better cope with risks. Agricultural extension is not as easy in the context of rising prices In the last few years the Dien Bien district, Dien Bien province has been implementing the “3 reductions, 3 gains” (reduce seed rate, reduce fertilizer rate and reduce pesticide spray; and gain productivity, gain quality and gain profit). However the effectiveness of the extension work has not been as desired. The “row seeding” technology using a row seed was introduced two years ago. However, it has only been applied to 100 ha (of the total 6,000 ha of paddy land of the district) as the farmers are not used to the “widely spaced holess“. The fertilizer rate has actually been increased rather than reduced. Nearly 25 percent of the poor households and 35 percent of the non-poor households interviewed have increased their fertilizer rate over the last year and none have reduced the rate. The recommended frequency of pesticide spray is only two times per crop while many farmers still spray 3-4 times. In Huong Hoa district, Quang Tri province, the cassava processing plant has always recommended the use of fertilizers to improve soil quality. However, farmers still tend not to use fertilizers as they have not done so traditionally and assume it is a labour-intensive process. The plant is piloting a new fertilizer rate for cassava crop which costs less than the regularly recommended rate. However it is not easy to change the farming practice of the Vân Kiu group. Leaders of Xy commune believe that they “may have to wait until the next harvest when the people realize that output has further declined (there has been a 30 percent reduction of output of the last crop) and start paying attention to fertilizers“. There is also the disadvantage that the plant does not have a close relationship with the local extension system. 5.2.8 Implementation of grassroots democracy There may be an opportunity to enhance the implementation of grassroots democracy. As prices increase people tend to become more sensitive to the various forms of mandatory contributions and require higher levels of transparency, waste reduction and quality assurance for infrastructure facilities. Grassroots cadres interviewed noted that “everything that requires contributions from the people has to be implemented thoroughly and supervised closely”. Transparent information will also allow for the smoother implementation of State managed activities, particularly “socialized” activities at the grassroots level. The experience of Go Vap district in implementing the “ward/commune budget analysis“ programme serves as a good example. 77
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Preface 1 Viet Nam has made strikin
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Table of Contents Executive Summary
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Executive Summary 1. Between May an
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Tóm tt budget. Women also tend to
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Tóm tt 34. A frequently asked ques
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1. Introduction 1.1 Context Rising
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Introduction • Go Vap district (H
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2. Overview 2.1 Inflation Rising in
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Overview Table 2.2: Percentage of N
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Overview Maize. The average output
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Overview and policies for new targe
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