Sustainable rural development in Vietnam: experience from Japan “one village one product” (OVOP) and Thailand “one tampon one product” (OTOP)

Policies and Sustainable Economic Development | 197 Sustainable Rural Development in Vietnam: Experience from Japan “One Village One Product” (OVOP) and Thailand “One Tampon One Product” (OTOP) NGUYEN HOANG ANH Vietnam National University – HCMC, University of Economics and Law - anhnh@uel.edu.vn VO THI NGOC THUY Vietnam National University – HCMC, University of Economics and Law - thuyvtn@uel.edu.vn NGUYEN TIEN DUNG Vietnam National University – HCMC, University of Economics and Law - ntdung@uel.edu.vn Abstract OVOP (One Village One Product) movement in Japan is considered as a way of reinforcing local communities’ entrepreneurial skills by employing local assets and knowledge, establishing value adding accomplishments, and forming human resources in the local economy This movement has been transferred into Asian countries and to other developing areas During these transfers, it has evolved and become different forms such as OTOP (One Tampon One Product) in Thailand and OVOC (One Village One Craft) in Vietnam However, not all the replicated OVOP models are successful This study attempts to investigate different approaches in rural development policy such as endogenous and exogenous development or “bottom-up” and “top-down” through comparative analysis of Japan OVOP movement and Thailand OTOP This qualitative study utilizes documentary research to identify important factors having impact on the success of sustainable rural development and comparative analysis to provide critical analysis of developing two movements in different countries The study indicates that in order to reach the level of success as the origin OVOP movement, endogenous development strategy with ‘bottom-up’ approach should be emphasized, along with the support of exogenous factors Keywords: One Village One Product; One Tampon One Product; One Village One Craft; sustainable rural development; endogenous development 198 | Policies and Sustainable Economic Development Introduction According to the World Bank (1975), rural development is defined as “a strategy aiming at the improvement of economic and social living conditions, focusing on a specific group of poor people in a rural area It assists the poorest group among the people living in rural areas to benefit from development” Rural development is a vital element for poverty alleviation Around three-quarters of the world’s impoverished live in rural regions Many poor people in cities are migrant workers and farmers who left rural areas Therefore, if living standards and income generations in rural areas are improved and rural immigrants to cities come back to rural areas, excessive population inflowing to cities will be diminished, causing poverty in both cities and rural areas to decline Besides, development of rural areas can be a shelter when there is a lack of job offers in cities because of depressed economic conditions Although Asian countries are exposed to the forceful policy hastening industrialization, the policies have revealed many flaws simultaneously, such as the income gap between urban and rural, depopulation problem, congestion of big cities, and environment issues, and others According to Brockerhoff (2000) of the world’s population, 48% lived in urban areas in 2003, but this is expected to increase to 61% by 2030, which means that those problems in an increasingly urbanized world will become much more severe Among this context, the success of Japan “One Village One Product” (OVOP) movement in preventing economic deterioration and depopulation of local communities has drawn attentions from many governments in developing countries such as Thailand, Indonesia, and Vietnam However, not every adapted OVOP program outside Japan is successful as expected The difference between Japan original OVOP movement and other adapted OVOP versions has raised questions about policy approach in rural development such as endogenous or exogenous growth and ‘bottom-up’ or ‘top-down’ approach This study aims to investigate those different approaches in region development policy through comparative analysis of Japan OVOP movement and its adapted program in which Thailand ‘One Tampon One Product’ (OTOP) movement is significantly influential This qualitative paper utilizes documentary research to identify important factors which have impact on the success of sustainable rural development Besides, our study draws on historical narratives and documentary review of the implementation process of Japan OVOP and Thailand OTOP Comparative analysis is conducted to provide critical analysis of developing two movements in different countries Literature review 2.1 Endogenous development theory In a globalized, technology-driven, knowledge-based world, endogenous development theory plays a crucial role in providing implications of economic development policies not only in advanced countries but in developing countries as well Previously, variation in standards of living across Policies and Sustainable Economic Development | 199 countries or regions is clearly associated with different amounts of physical capital such as public infrastructure However, physical capital only explains about one-third of the variation in income per capita across regions and countries Endogenous development theory can explain those “two-thirds” of difference The pioneer of this theory is Romer (1986), who argued that human capital, technology or innovation, and knowledge are significant contributors to economic growth In other words, economic growth is primarily the result of endogenous and not external forces The theory also focuses on positive externalities and spillover effects of a knowledge-based economy which will lead to economic development In developing countries, where many governments has followed the path of resources-based economy, local cultural, economic system, opportunities for marginalized groups are undoubtedly deteriorated In such circumstances, the governments of developing countries are required to reidentify and prioritize the goals for sustainable economies with the participation of social capital, the role of the state, and local government and non-governmental organizations (Nixon, 2009) Moreover, in the Sustainability Revolution, regions need to revitalize low-income groups, understand regional resources, develop potential sectors that bring added value for the region, and enhance human empowerment (Nixon, 2009) These ideas lie in the concept of regional development and endogenous growth theory In a globalized world, the role of locality and regional development is particularly significant According to endogenous development approach, social development, the growth of human capital, the role of local communities and their activities in the transformation of local resources are particularly emphasized Martin and Sunley (1998) note that “endogenous development” is here “synonymous with locally-based.” These authors refer to the concept of stimulating regional development by the support of “local enterprise, small-firm growth, and technological innovation.” Recently, Friedman (2007) identified seven elements of regional assets necessary for endogenous development, including basic human needs, organized civil society, the heritage of an established environment and popular culture, intellectual and creative assets, regional resource endowment, the quality of its environment, and infrastructure Besides, rural entrepreneurship is given its importance in regional sustainable development, in terms of poverty reduction, and meeting social needs (Dees, 2007; Torii, 2010) Endogenous development approach is especially suitable for rural areas because it puts the focus on making full use of potential resources, innovations, and human capital, preserves the environment in rural areas, and promotes semi-secondary industries This is also the spirit of the OVOP movement This type of development does not make a large contribution to the economic development of the whole country, since each of the projects is generally small-scale, and the capital and resources used for it are also small Still, the ‘reach’ of such an approach, in terms of geographical and population coverage, can be very significant indeed The aim of the OVOP movement is to create and market local products that, in time, can gain a “global reputation” (Oita OVOP Committee, 2006) 200 | Policies and Sustainable Economic Development With respect to the management and implementation of rural development policies, there are two approaches or strategies: “top-down” and “bottom-up.” For “top-down” approach, macro-level centralized planning strategies with decisions taken by urban elites based in central governments As a result, development is often based on conceptions about what rural people want and need without discussion with rural people Therefore, it can be implied that development can be forced or promoted by states or development organizations rather than being inspired and shaped from the grassroots (Power, 2003) Such strategies have tended to be urban and industrial in nature, capitalintensive, and dominated by high technology and the large project approach (Stohr & Taylor, 1981) However, many countries applied “top-down” approach in their rural development policies mainly because of low literacy levels of people in rural areas and the impacts of centralized political system By the early 1970s it was beginning to become widely accepted that the top-down approach to rural development was failing to make a significant impact upon rural poverty As a result, during the 1980s and 1990s there was comprehensive support for turning development around and approaching it from the bottom-up Bottom-up or grassroots development seeks to amend the imbalances of previous development strategies by emphasizing localism and empowerment and by “putting the last first” (Chambers, 1997) “Participation” of local people has turned out to be a significant factor in development theories and practice It can play a significant role in the establishment of development projects It can also be used to articulate local people’s concerns in the setting of development priorities Development projects should be set by the concerned communities to obtain their complete participation, rather than being orchestrated by outside organizations (Willis, 2005) Moreover, development “from below” considers development to be based primarily on maximum mobilization of each area’s natural, human, and institutional resources with the primary objective being the satisfaction of the basic needs of the inhabitants of that area From this point of view, the “bottom-up” approach corresponds to the endogenous development theory In order to serve the mass of the population broadly categorized as poor, or those regions described as disadvantaged, development policies must be oriented directly toward the problems of poverty, and must be motivated and controlled from the bottom (Stohr & Taylor, 1981) Nevertheless, bottom-up approaches suffer from several limitations (Parnwell, 1992) First, it is the difficulty of finding effective channels of communication through which individuals or groups at the local level can participate, the lack of any homogeneity of interests within such groups, the time, and money required to undertake any effective form of participatory planning and, in many instances, fundamental differences between local and national interests (Apthorpe & Conyers, 1982) Second, localized grassroots initiatives ultimately come into conflict with forces they cannot control, such as the broader issues of legal rights and resource distribution Consequently, it can be argued that increased collaboration between the nation and local, urban, and rural areas will possibly result in a flexible and balanced approach to rural development (Parnwell, 1992) Policies and Sustainable Economic Development | 201 2.2 Community-based social enterprise Besides endogenous development theory, there is also some observations motivating this study For the last four decade, we have had community-based agriculture being driven by governments and it has not worked particularly well in Vietnam We have had many problems with corruption, undemocratic governments, political interference, mismanagement, overbearing bureaucracy We have a centralized and top-down approach to push economic development in rural areas However, the problems of depopulation, income inequality between urban and rural areas, poverty become more and more severe in Vietnam rural areas Furthermore, the emergence of ‘bottom-up’ model as well as the contributions of community-based organizations to the success of OVOP movement has proved the vital role of community-based social enterprises in rural development In addition, few studies examined the role of community organizations to the success of OVOP movement meanwhile the proportion of CBEs which engaged in OVOP/OTOP activities accounted for approximately 66% Therefore, CBEs are believed as important elements for the applications of OVOP movement to be successful Community-based social enterprises offer a new strategy for people-centered local economic development in the majority-developing world The concept of social enterprise coming out of the western social economy context is relatively unfamiliar in Asia Social enterprises are businesses that provide services, goods, trade for a social purpose, and operate independently of the state (DTI, 2002) “Community based social enterprises seek to provide sustainable economic activity in ways to ensure that the money and benefits from such activity flow directly back into the locality in which the social enterprise is based This is of particular value when the social enterprises are based in disadvantaged communities.” (DTI, 2002) While still embracing basic business functions, these types of enterprises “differ from most conventional businesses in that they are not based on utilitarian economic models but have broader political, social, cultural, environmental, and economic goals” (Kerins & Jordan, 2010; Loban et al., 2013) Social enterprises trade like mainstream businesses in order to build long-term sustainability Earned income, therefore, has two functions: firstly, it supports fulfilling social objectives, and secondly, it represents a drive toward financial selfsufficiency (Peredo & McLean, 2006; Parkinson & Howorth, 2008) In short, CBSEs are collective business ventures created by local communities, which aim to contribute to both local economic and social development A large amount of literature indicated that social enterprise could contribute to building sustainable rural communities and help governments in poverty alleviation in developing countries (Steinerowski, 2012; Peredo & Chrisman, 2006; Torri, 2010) The benefits of social enterprises for rural areas described are such that, by using a bottom-up approach, services provided will more appropriately meet local needs and, by doing this, satisfy the distinctive needs of local communities (Torri, 2010) Moreover, social enterprises are believed to present a potential solution bringing together business and social action, and combining needs of communities and the state (Steinerowski, 2012) 202 | Policies and Sustainable Economic Development Comparative analysis of Japan OVOP and Thailand OTOP 3.1 History/Origin of OVOP OVOP movement is considered as an example of endogenous development, and was originally developed in Oyama district in Oita prefecture around 1960 when the local people promoted change from traditional cultivation to increase productivity Their promotion slogan was “Cultivating plums for Hawaii.” After that, at the beginning of 1970s, the success of Yufuin town in exploiting hot springs as a tourism resource and becoming a famous tourism attraction was a major achievement for OVOP In 1979, Mister Hiramatsu, the governor of Oita prefecture, officially took the initiative in promoting OVOP The main idea of the movement is encouraging villages or local areas to concentrate on one product that they did very well and then market that product abroad The OVOP concept grew out of this The OVOP movement had two objectives The first objective was to increase the per capita income of the citizens The second objective of the movement was to create a society where all citizens could be proud and feel satisfied with their lifestyles in each of their respective communities The elderly could live with peace of mind, while the young could fully express their vitality, and people could produce their own specialties including cultural and tourism events in the rural areas Hiramatsu affirmed that “the ultimate goal of the OVOP movement is people-based; the term “product” refers not only for physical goods, but also tourism and culture activity” (Hiramatsu, 2008) In other words, OVOP movement aims to improve local people’s life quality through accelerating both Gross National Product (GNP) and Gross National Satisfaction (GNS) 3.2 Principles of Japan OVOP movement The operation of OVOP movement is based on the following four principles (Hiramatsu, 2008) Endogenous development theories were fully implemented and can be seen in Oita OVOP’s principles Firstly, “local yet global” or “Think Globally, Act Locally” is meant for “creating globally acceptable products and/or services based on local resources.” The marketable product is not only expected to sale at local shop in their area, but it can also be marketable both in their country and around the world The products must represent local people’s pride in material and cultural prosperity of their home villages The second principle is self-reliance and creativity Even daily activities and local entertainment can be transformed into valuable products or services to be marketed For instance, Activities such as big voice or shouting contests in Yufuin town and pond cleaning in Ajimu town attract people from outside Oita The principle also implies that the driving force of OVOP is community’s citizens It is not government officials but the locals who choose what they prefer to be their specialties to revitalize their area Local people have to take both risk and responsibility Policies and Sustainable Economic Development | 203 Next, human resource development is the most importance of the OVOP principle The experience of the successful movement is inevitable to have an excellent leader or outstanding human resource in the each area Moreover, responsibility of Governments is irregularly not referred in some articles It is also one principle that Mister Hiramatsu mentioned The main actor is citizens but local government can take the importance role in promoting the driving force of local Though the government did not provide locals with subsidies directly in order to avoid dependency, local government can support the movement by providing technical guidance, researching products through shops in urban areas, supporting for sale promotion, awarding people and groups to encourage their creativity, establishing private company for local products, organizing product fairs (Hiramatsu, n.d.) Besides, the local government supports to promote human resources, which is the most important principal of the movement, through the establishment of training schools and R&D institutions such as the Land of Abundance Training School, Agricultural Training School, Commerce School, Environment School, IT Academy and OVOP Women’s 100 Member Group, Agricultural Technology Centre, Mushrooms Research and Guidance Centre, Livestock Experimental Station and the Institute of Marine & Fisheries Science (Oita OVOP Committee, 2006) Another effort of the Oita prefectural government in supporting to market OVOP products is to organize product fairs and exhibitions periodically and have promotion initiatives such as roadside station (“Michi-no-Eki” in Japanese) Roadside station was initiated in 1993 by local governments and national highway administrators to facilitate tourism and travelling Local communities along main highways provided automobile users with retail goods and dining services The roadside stations play a role as distribution channels for OVOP products as well as “entrance points for OVOP services such as cultural events and eco tourism” (World Bank, 2004) In sum, the OVOP movement is a campaign to facilitate regional development through making locals aware of their potential and maximizing it with their spirit of self-reliance while the prefectural government provides technical advice Since the OVOP movement was initiated, each province in Japan develops products and local brands in their own style, such as apples at Aomori, peaches at Fukushima, strawberry at Tochigi, green tea at Shizuoka, rice at Nikata, young green beans at Tohoku areas, hot springs at Beppu, Shiitake Mushrooms at Oita As a result, this project has begun to be recognized not only in Oita prefecture, but also in other parts of Japan and other countries Through adding value and developing the uniqueness of products/ services for a specific region, the local’s income has been improved significantly, not to mention strengthening tourism of a certain prefecture Regarding OVOP’s achievement in Oita, in local products alone, there was a dramatic increase in the number of products and sales, from 143 and 35.9 billion in 1980 to 336 and 141 billion Yen in 2001 Intangible products also witnessed a significant revitalization, for example: Oyama town set up a unique agricultural production system through its co-operative, more than ten million tourists 204 | Policies and Sustainable Economic Development visit Beppu for its hot springs, and Yufuin town has more than 3.8 million visitors every year to see its traditional products Totally, thanks to OVOP movement, there were 808 OVOP-related products, facilities, events, and activities created by 2002: 336 local unique products, 148 facilities such as community centers, 133 cultural items, 111 local economic activities, and 80 activities related to environmental protection (Oita OVOP International Exchange Promotion Committee, 2005) However, it is not easy to make an accurate measurement of an overall OVOP impact on the prefectural economy 3.3 OVOP in Thailand and other countries OVOP movement in Oita prefecture provides an ‘ideal’ model of success in regional endogenous development policies Currently, the ideas of OVOP movement have spread out and are being applied in many countries in Asia such as China, South Korea, Thailand, Malaysia, Laos, and so on From the “One village - One product” concept, each country has created its own slogan For instance, “One town one product” movement in Shanghai and “One village one treasure” in Wuhan - China; “Satu Kampung Satu Produk” and “One district One product” in Malaysia; “One Tambon - One product” in Thailand; “One Barangay, One Product” in Philippine; “Neuang Muang, Neuang Phalittaphan” in Laos; “One Village, One craft” in Vietnam Among these “OVOP versions,” “One Tambon - One product” in Thailand emerged as the most “successful” of abroad OVOP movements It can be said that the spirit or the principals of the ‘origin OVOP’ has been remained in the majority of abroad OVOP movements’ objectives However, there is a significant difference between the Japan origin OVOP and other abroad OVOP in terms of governance and implementation Examining oversea OVOPs in several separate studies indicated that the application of OVOP in developing countries tend to follow a ‘top-down’ approach with direct governance from the central government, such as in Thailand, Malaysia, Malawi, Africa, China (Isuga, 2008; Okara, 2009; Shakya, 2011; Kurokawa, 2009) Meanwhile, the Japan origin OVOP is described as “bottom-up” scheme which was initiated by communities with the local government’s support In this study, we conduct a comparative analysis between the Japan original OVOP and Thailand OTOP, which is considered as the most outstanding oversea OVOP, to withdraw experiences in applying OVOP movement in Vietnam rural development The former Prime Minister Thaksin Shinawat (Thailand) is the first person who employed this concept and implemented in reality (Shakya, 2011) The “One Tambon One Product” (OTOP) campaign operated for five years under Thaksin’s government (2001-2006), and was then continued under the government of Prime Minister Surayut (2006-2008) However, under the latter the campaign it was changed to “Local and Community Products.” Similarities between Japan OVOP and Thailand OTOP Regarding the similarities, both Japan and Thailand OVOP aims to improve the average income of rural people through revitalizing local products and resources Similar to Japan, Thailand also Policies and Sustainable Economic Development | 205 employed many strategies to help develop local products as well as production process in rural areas For instance, Thailand also established local research institutes such as Thai Sericulture Institute to help OTOP groups Thai government offered a good many training courses to upgrade knowledge and skills of community leaders Japan and Thailand OVOP also share some common marketing strategies and assistance: establishing close urban-rural economic links through consumers and tourists through developing road/highway networks, organizing product championship contests, publicly grant special awards to innovative local products/services, sponsoring trade fairs, exhibitions and antenna shops, advertising through public broadcast, creating OVOP/OTOP brand, constructing website for local products’ advertisement, and selling products online, etc (Isuga, 2008) Differences between Japan OVOP and Thailand OTOP On the other hand, the differences between Japan OVOP and Thailand OTOP are exposed in several aspects of governance, financing, human resource development, and so on as follows: First, in terms of governance or the role of government, the original OVOP movement in Japan has been majorly to community-oriented development encouraged by local government, concerning on optimizing local resource utilization (Hiramatsu, n.d.) Meanwhile, Thai’ OVOP movement (or OTOP) has characterized as mass production and marketing oriented development rather than community development in which is initiated by central government However, unlike communityoriented development, mass production and marketing oriented development has obstructed many small community industrial businesses to be qualified for joining OTOP projects, because they are not able to produce a large amount of goods matching with the qualification Besides, OVOP movement is a local government’s policy but Thailand’s OTOP is a national policy The difference in policy levels between OVOP and OTOP relatively makes administrative systems different Figures and shows the difference in administrative structure between the origin OVOP and Thailand’s OTOP The OTOP has been systematically driven through the function of the National OTOP Administrative Committee, specialized subcommittees, and various government agencies, and the budget is allocated through the SMEs Promotion Fund This means that there is no coordination and there is overlap Meanwhile, in Oita, OVOP is a truly local development policy Central government support comes in form of basic physical infrastructure to provide energy, water, materials, buildings, and mobility to facilitate economic efficiency of the project This ultimately illustrates the core role of the local element in endogenous development theory discussed in the last section 206 | Policies and Sustainable Economic Development Oita Prefecture Office Oita OVOP International Exchange Promotion Committee Cities’ Office Local People in Village Town/City Figure Oita OVOP Administrative Structure Source: Oita OVOP International Exchange Promotion Committee (2010) Prime Ministry’s Office Related Ministries & Agencies OTOP Office Related Provincial OTOP Offices Related District OTOP Offices National OTOP Administrative Committee Province OTOP Office Provincial OTOP Administrative Committee District OTOP Office District OTOP Committee OTOP Participating Tambon Community Plan Figure Thailand OTOP Administrative Structure Source: Takanashi (2009) Second, there is another difference between OVOP and OTOP regarding their target beneficiaries The former aims at village revitalization by community-wide learning, whereas the latter focuses on enterprise promotion by product upgrading OVOP movements in Japan gradually introduced a change in the way communities organize their production activities, first by going through a thorough evaluation of their geographical, resource and working environments under a competent and respected leader, and then by committing their financial and human resources to the growth of selected subsectors for community-wide development In the case of OTOP, the prime focus is on existing products and enterprises producing them It is more an approach to building on existing products and speeding up the growth rather than introducing a fundamental change in their activities OTOP officials generally approached enterprises with greater potential for growth and favored them with Government support As a result, OTOP project made the advantaged producers more advantageous while making little efforts to uplift disadvantaged producers, limiting the Policies and Sustainable Economic Development | 207 project’s impact on poverty alleviation In this aspect, Thailand OTOP did not effectively target the poor (Kurokawa, 2009) Third, regarding financing sources, there is a huge difference between the original OVOP and Thailand’s OTOP For Oita OVOP, the local government did not provide direct subsidies for OVOP producers in order to avoid dependence OVOP groups in Japan mainly rely on private credits offered by local banks and cooperatives Conversely, Thai government offered a lot of micro-credit financing programs and even direct government subsidies such as the OTOP Policy Loan Project, the Village Development Fund, the People’s Bank Program, the Government Savings Bank, the Bank of Agriculture and Agricultural Cooperatives, the Bank for Small and Medium Sized Enterprises, and so forth, in order to help farmers access to loans and have funds to start-up or expand their OTOP ventures About the efficient use of these financing programs and subsidies, Jitsuda (2010) stated that in the beginning it was hugely successful because every ministry poured in budgets to please the government The total budget for this project was billions of baht However, he estimated that only thirty percent of the money was spent on developing the project (Jitsuda, 2010) Governmental subsidies and cheap loans not contribute to empower the rural poor in the long term, but making them more dependent on external financial assistance and less accountable to the project that they themselves initiate in OTOP program Lastly, as for human resource development aspect, Oita government is fully aware of the importance of developing physical products and enhancing people’s skills and knowledge Oita local government established training schools to develop entrepreneurship for local people in each community so that some trainees can become future leaders in their communities The characteristics of the schools depend on the local demand of learning, including Agricultural Training School, a Commerce School, and a Tourism School The local residents come to class to learn from experienced business owners, or experts in the fields of their products to learn how to create a product, deal with finance, and manage operational activities effectively (Pitchayapisut, 2008) With the same aim of human resources development, Thai government also provided training programs for local residents However, the difference is that the training just provides basic vocational knowledge instead of specializing in the local product Thus, they find the class not much useful for local projects This is understandable because local people are not involved in the selection of trainers The training is organized by national government who does not understand the demand of local people; thus select the trainers whose knowledge is not applicable in the unique local resources (Kaoru et al., 2011) Other differences between Japan OVOP and Thailand’s OTOP include the following Thai community entrepreneurs not distribute products directly to the end-consumer, while OVOP entrepreneurs promote products directly to restaurants or launch them directly to consumers; (Kurokawa 2011) OTOP entrepreneurs make products but don not use local capital, natural resources or local culture, but instead copy products, while OVOP enterprises focus on uniquely local products (Murayama, 2014) 208 | Policies and Sustainable Economic Development In sum, the original OVOP policy in Japan is a locally led and bottom-up movement, which focuses on self-sufficiency while the OTOP scheme in Thailand is a centrally led, top-down policy that involves continuous government assistance The Oita movement was an endogenous one without any precedent and the prefectural government independently developed it On the other hand, though adapted from Japan OVOP, OTOP is not a truly regional endogenous development policy but a government-led project for the manufacturers of new local specialties Nevertheless, the OTOP program has positive impacts: an increase in income, a reduction of outmigration, a greater collaboration within the community For example, most households received 213,420 Baht ($6,467.30) per year before joining the program; however, after joining the program, households had an average income of 244,452 Baht ($7,407.70), a 14.5 percent increase Through marketing and exhibitions, OTOP products were able to increase sales from 6.35 million Baht to 7.82 million Baht (23.1 percent increase) Yet, the Thailand’s OTOP also has many flaws: a rise of household debt, a lack of production of quality products, a general lack of innovation in the commodities, a lack of entrepreneurial skills to manage businesses and a dependence on the government’s assistance Besides, though the report showed that there was an increase in the earning villagers received, only a handful of people’s wages had gone up Most groups that were already successful in setting up OTOP businesses received financial assistance from the government (Jitsuda, 2010) There are several reasons behind the decision of choosing “top-down” approach in Thailand rural development instead of the Japan original “bottom-up” OVOP movement The first reason is due to political interests of Thai government during the time of conducting OTOP OTOP is one of pro-poor policies initiated by former Prime Minister Thaksin Shinawatra, who aims to exert a greater influence on the rural poor The basic motivation of the former Prime Minister Thaksin was to get support from the farmers and to show his capacity to foster coordination among government program for Thai people’s lives The success of the policy contributes to the greater approval of the majority in society for his position of the Prime Minister his incoming election victory McCargo and Pathmanand argue that the OTOP program was designed to attract votes from “new networks of local support,” which were mainly people in the small business network Only by top-down mechanism of policy implementation, the result could come out quickly and widely Other reasons of applying “bottomup” OTOP include the economic incapability of local governments and the lack of education and production knowledge of many villagers Vietnam’s potentials in adapting the OVOP movement Similar to Thailand, Vietnam, compared with other countries around the world, is good at producing agricultural products Three quarters of the population and around 90 percent of the poor living in rural areas Additionally, Vietnam has 54 ethnic people groups and each ethnic group with its traditional handicrafts and cultural identity will be the unlimited resources for revitalizing and develop handicrafts as well as craft tourism As for craft villages in special, there are over 2,700 craft villages nationwide, which employ nearly 30% of the labor force in rural areas (MARD, 2010) Among Policies and Sustainable Economic Development | 209 2700 craft villages in Vietnam, the number of craft villages engaging in bamboo and rattan weaving accounts for 24 percent of the country's traditional craft villages Fabric weaving craft accounts for 14.5 percent of the total; following by furniture making craft and embroidery and lace making craft with 11.4 and 11.5 percent, respectively (Ngo, 2005) As shown in Figure 3, craft villages are mostly located in the Red River Delta (60%) and in the Central Region (30%) and the South (10%) (VEA, 2008) Many Vietnam’s handicrafts have high aesthetic and traditional value and meet the criteria of “one village one product.” However, the development of agricultural products and handicrafts has not been up to their potentials Figure Distribution of craft villages in Vietnam Source: MARD (2010) Generally speaking, Vietnam faces a lot challenges in rural development, including the dependence of agricultural production on investment in labor and natural resources, slow growth of non-agricultural crafts, few rural enterprises, underdeveloped infrastructure, low quality production, loose cooperation and association among farmers, and local authorities’ lack of budget and capacity 210 | Policies and Sustainable Economic Development (Dang, 2007) Vietnam’s craft villages in special are facing with challenges such as lack of master planning, excessive unplanned growth, and causing environment pollution due to backward technology, equipment, and skills In these villages, there is low percentage of trained laborers, poor market approaching, and lack of business skills (Ngo, 2005) During the last four decades, Vietnam government has committed its mission of poverty alleviation, which has been expressed in “Five Year Social-Economic Development Plans” since 1976 Hence, agriculture and rural development lie at the very heart of Vietnam’s development strategies Although Vietnam government recognizes the importance of improving farmers’ actual need and self-reliance capacity, policies and programs related to the state’s assistance is still “more on a topdown central planning modality than dialogues” (Rudengren et al., 2012) From the efficiency of the OVOP movement, the Ministry of Agriculture and Rural Development, Vietnam has been implementing the “One Village One Craft” (OVOC) scheme since 2006 with an aim to push up development of craft villages toward specialization, encouraging people to make full use of local resources in order to enhance community strengths and revitalize traditional craft villages At the first stage, with the support of Japan International Cooperation Agency (JICA), some provinces/villages in the North area, such as Ha Noi, Lai Chau, Dien Bien, Son La, and Hoa Binh, have participated in the OVOC project However, there is almost no report or study that assesses the achievement of OVOC program Mister Luu Duy Tan, Chairman of the Vietnam’s Craft Village Association, claimed that not many handicraft producers/farmers are aware of the existence of OVOP/OVOC program as well as its principals Local villagers even suffer lack of knowledge and skills of production, market, entrepreneurship, and promotion, and they cannot define their own competency Besides, within each village, due to the convention/customs of keeping “trade secret,” there is no sharing of production techniques among households/villages Therefore, Vietnam OVOC program is still a government plan and does not succeed as expected Suggestions to develop Vietnam OVOC movement In order to make the OVOC program more effective for the sake of sustainable rural development and poverty alleviation, Vietnam government could learn from the experience of implementing OVOP movement in Japan as well as in other developing countries, Thailand included According to Power (2003), development cannot always be planned and promoted by states but it must also be seen as emerging from the grassroots The key point of this success is that the OVOP policy emphasizes on self-reliance and endogenous development of the communities To be sustainable, community development must be carried out by community members themselves rather than depending on supports from outsiders However, in the era of globalization, it seems difficult for local communities, especially in undeveloped areas in developing countries, to depend only on endogenous development Yoshimura (2004) suggests that villagers should utilize not only local resources and local values but also support from national government and inter-regional cooperation Policies and Sustainable Economic Development | 211 to establish a network connecting various local economic and civil movements In OVOP, self-reliance is one of the most important principles in the adoption of the endogenous development theory but it is difficult for villagers to find information and markets for their specialties and products without the support from national governments or other outside stakeholders Therefore, in some aspects, endogenous development is dependent on exogenous factors Besides, one of the aims of the OVOP movement is to produce local specialties and products that can be sold internationally, exogenous factors can support endogenous development and help to export local products to international markets through its linkage with the indigenous industry of the local community Nevertheless, to reach the level of success as Oita OVOP movement, local people still play a key role in community development process, and the local government only gave technical support, encouragement, and marketing promotion, not much of financial subsidies, because too much dependence on government might weaken the dynamism of the movement In the case of Vietnam, we suggest that at the first stage the OVOC scheme should follow the ‘topdown’ approach with the emphasis on the government and outsider’s support of production knowledge, market, business skills, and even finance sources to improve rural infrastructure and help local villagers define their own competency At the second stage, the “top-down” approach should be transformed gradually into the “bottom-up” approach Self-reliance should be propagated by showing the model of successful cases under the strong guidance of local administration through dialogs between local government and villagers In addition, community-based social enterprises (CBSEs) should be encouraged to play an active role in sparking startup spirit and evoking rural entrepreneurship In both Japan original OVOP and Thailand adapted OTOP, CBSEs contribute a lot in the success of these movements CBSE is a form of community organization which is considered to be a focus of recent sustainable rural development projects in developing countries It will help impoverished farmers to “become independent as active beneficiaries of development” (JICA, 2000) Besides, from the perspective of efficiency, donor agencies and business angels would prefer farmers’ organizations, in comparison with assistance of individuals Additionally, CBSEs can enhance villagers’ choices in development For instance, CBSEs are able to reconstruct roads or develop markets where individuals/households cannot Although ‘Social Enterprise’ seems to be a new concept in Vietnam, there were more than 1,000 NGOs, 320 national associations, and more than 2,000 associations operating on voluntary principles and autonomy at the central and local levels (CIEM, 2012) These organizations have certain characteristics of social enterprises and can be transformed into social enterprises in the future Furthermore, according to a survey on Vietnam’s social enterprises that was carried out by CSIP Vietnam, the British Council, and Spark in 2011, 68% of Social Enterprises in some way have been working toward contributing to poverty reduction, life stability, and income improvement through providing education and vocational training, enhancing skills, providing equipment, and updating knowledge Among these organizations, approximately 38 percent of surveyed enterprises are operating in crafts industry, which means we can rely on these social enterprises to support and 212 | Policies and Sustainable Economic Development develop the OVOC program During the implementation process of OVOC program, local government should pay attention to these features to support the establishment of CBSEs In detail, the following steps should be considered to make the Vietnam OVOC movement successful: The National government (such as MARDs) has campaigns and strategies to make local government officials, academics and the wider public acknowledge the philosophy of the initiative OVOP/OVOC as well as its principle and its methodology The OVOC movement is publicized widely through mass media and galvanizes their competitive spirit At the same time, nationwide delivery services, transportation networks, telecommunication infrastructure, rural electrification infrastructure included, need to be expanded and improved quickly It enhances human and social capabilities and requires the investment from the central government Local government directly called for the grass-roots leaders to take initiative of movement (from Oita OVOP movement’s experience) Local leaders asked the people to find commerciable products in each town and village and employ their local wisdom in product development under the support of local government Prefecture government encourages establishing community-based social enterprises with the participation of local people to not only nurture local leaders and evoke rural entrepreneurship but also play a role as entity representative in business contracts Besides, CBSEs could diffuse production knowledge and techniques to its members who are local villagers to help them develop and improve the quality of local products as well as production process Local government, NGOs and CBSEs cooperate to help develop villagers’ business capabilities as well as improve conditions for small-scale businesses and entrepreneurs Villagers’ business capabilities could be developed through vocational training and seminars on technical improvement for existing products or the introduction of new products As for conditions for small-scale business, various projects should be implemented such as microfinance services, shipping and distribution cooperatives, and market development Training and education are offered to regional and industrial leaders Prefecture research organizations mobilize technical supports for product development A community product standard system at prefectural level and national level should be developed Prefectural government took initiative to propagate OVOP products in the global market in the big cities, including exhibition of OVOP products Effective channel of distribution and marketing of OVOP products were established and promoted Policies and Sustainable Economic Development | 213 Conclusion The Japan OVOP movement implies a crucial model of success in sustainably rural development policies The movement encouraged and empowered local people to uncover opportunities for economic growth by utilizing local resources and local wisdom to build up local industries with a global outlook The movement, along with the emergence of CBSEs is believed to be a suitable approach to the issue of renovation of local industries in the globalization era Learning from Japan OVOP movement, many developing countries, Vietnam included, has adapted the movement, and transformed it into their own version However, those adapted OVOP programs have not had big impacts on local economy as expected It requires entirely change the people's mindset which had been enclosed in the small community and never been familiar with business and commercial issues It 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