Asia Times: Life looks up for Vietnamese farmers



	September 22, 1999	atimes.com

Southeast Asia

Life looks up for Vietnamese farmers
By Nguyen Nam Phuong

HANOI - ''Ten years ago we ate only two meals of rice and vegetables a day. Now we can afford meat, fish and shrimp. Yes, things have improved enormously,'' says Dung, a farmer in Truc Son village, 25 kilometers from the Vietnamese capital.

Dung could be speaking on behalf of much of Vietnam's 79.5 million people. Living standards in communist-ruled Vietnam have risen dramatically as a result of ''doi moi'', the process of economic liberalization launched in 1989.

The trend is confirmed by a survey of 6,000 families by the Vietnam's General Department of Statistics, which states that between 1993 and 1998, average annual per capita income increased by 250 percent to 3.466 million dong (around $247).

The survey, conducted in 1997-1998 but whose results were released in late August, was done with the help of the World Bank, United Nations Development Program (UNDP) and Swedish International Development Agency.

Prior to the government's change in economic direction, some 70 percent of Vietnamese languished in poverty. As crucial support from the former Soviet Union waned after the Cold War, the threat of hunger and economic collapse was very real.

Despite an economic slowdown in recent years the country, boosted by overseas development aid and private foreign capital, has enjoyed unprecedented levels of GDP growth this decade. The economy has grown by 8 to 9 percent per year on average between 1990 and 1997 - with industrial growth peaking at 14.2 percent in 1996.

Remarkably, Vietnam, previously unable to feed itself, has become the world's second largest official rice exporter.

Its poverty levels dropped to 50 percent in 1992 and to around 15 percent last year, official statistics show. (The Vietnamese government's poverty figures refer to income as measured in rice per person - less than 25 kilograms per person a month in urban areas, 20 kilograms for low and midland rural areas and 15 kilograms for highlands.)

The World Bank estimates that poverty incidence in Vietnam has dipped from 58 percent of the population below the poverty line in 1993, to 37 percent in 1998.

Despite these achievements, which stand up to other richer countries, Vietnam has not managed to avoid the affliction of other rapid-growth economies in the region - the widening gap between the haves and have-nots.

The most significant discrepancy is perhaps between the cities and the countryside. Last year, urban residents averaged incomes of 9.057 million Vietnamese dong per head per year ($650), a figure that represents a 370 percent climb during the last five years. Incomes in rural areas, where 80 percent of the population live, doubled to 2.544 million dong ($183).

Farmers such as Dung have other things to be thankful for, however. Since the passing of the 1993 Land Law, which scrapped the disastrous agricultural cooperatives and instead gave families rights over their own land, they have had the freedom to chose crops and find their own markets.

Many households, particularly in the Red River Delta, have successfully adopted a farming system known as VAC (vuon-ao-chuong, or fishpond, garden and livestock) to supplement incomes.

However, natural disasters such as severe drought followed by flooding last year, bureaucratic hindrances in gaining credit, low-quality rice strains, poor infrastructure and insufficient market access all hold back the rural economy. Economist Nguyen Nguyet Nga of the World Bank, a major donor in rural development projects in Vietnam, says the bank is discussing with the government ways to address these problems.

Meanwhile, a recently proposed corporate income tax of 32 percent on ''rich'' farmer households with annual income of more than $2,572 has received widespread criticism and adds fuel to the argument that farmers consistently get a raw deal.

Critics point out that state employees pay only 20 percent corporate income tax, foreign-invested enterprises an average of 25 percent and state-owned enterprises enjoy a range of tax reductions and soft loans. ''The government knows what it has to do to boost the rural economy but at the same time it needs revenue. There is no consistency in policy,'' commented a Hanoi journalist.

For those toiling in the rice paddies, lack of sympathy from central government is not the only obstacle. Indeed, corruption and bureaucracy at local level is often blamed for frustrating farmers' attempts to fulfill their potential.

In the northern province of Thai Binh, violence erupted last year as farmers claimed the profits from their plentiful harvests consistently found their way into the pockets of local cadres through excessive and unjust taxes. In a gesture which lent further credence to the farmers' accusations, the Communist Party expelled 150 Thai Binh members and disciplined a further 900 in August this year.

To address the wider problem of official corruption, the General Secretary of the Communist Party, Le Kha Phieu launched a two-year ''criticism and self-criticism'' campaign in May.

Nevertheless, the Vietnamese saying that the king's rulings stop at the gates of villages is still generally believed to hold true. Farmers seldom benefit from a system many call feudalistic.

If life for the country's farmers is tough after economic improvements, Vietnam's 53 ethnic minority groups - comprising 13 percent of the population and found mostly in remote mountainous areas - have gained even less from economic revival.

In 1996 the UNDP estimated that about 66 percent of ethnic minority people lived in poverty, many suffering food shortages for three to four months a year. Traditional methods of slash and burn agriculture, both environmentally destructive and unsustainable, and rapid population growth have made their situation all the more critical.

NGOs dealing with poverty among ethnic minorities privately doubt the government's commitment to groups who, in the past, did not ally themselves with the Vietnamese struggle for independence, speak different languages and practice ''primitive'' cultures. Decisions on the allocation of government aid are generally made from Hanoi, based on scant knowledge of each community's problems.

Nasir Khan, a UNDP expert on poverty alleviation, says that moves are being made to ease the dependence of minority groups on bureaucrats in the capital. In the central province of Dak Lak, a UNDP-assisted ethnic minority project is taking needs assessment and planning to village level for the first time.

Proposals, specific to each community, are drawn up with minority groups and are then sent higher up the ladder for approval. The villages themselves provide 36 percent of the capital, removing some of the burden from the state.

Officials say there is no quick solution to fighting poverty, but this local initiative is one that can make a difference. ''It could become a model for poverty alleviation in the future,'' said Khan.

(Inter Press Service)

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