Entrepreneurship Development Programme for Women in Food Processing in Central Vietnam, Phase II

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1 THE SOCIALIST REPUBLIC OF VIETNAM (SRV) UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANISATION (UNIDO) Country: Project Number: Title: Project Sites: Entrepreneurship Development Programme for Women in Food Processing in Central Vietnam, Phase II Government Cooperating Agency: UN Executing Agency: PROJECT DOCUMENT Cost: Estimated Starting Date: First quarter of 2004 Duration: Three years, The Socialist Republic of Vietnam TF/VIE/04/002 Entrepreneurship Development Programme for Women in Food Processing in Central Vietnam, Phase II Three provinces in Central Vietnam: Ha Tinh, Quang Binh and Quang Tri Women s Union of Ha Tinh United Nations Industrial Development Organization (UNIDO) USD 858,000 (excluding agency support cost) BRIEF DESCRIPTION: In a UNIDO-executed training programme on training of trainers and women entrepreneurs in food processing was piloted in five provinces of Northern Vietnam. The project developed a training manual Training Programme for Women in Foodprocessing Industry where business management and food technology were integrated to respond to the needs of women s small-scale enterprises. The present Project, Phase II, builds on this accumulated experience. During more efficient and viable small-scale enterprises in the food-processing sector, particularly of women, will be developed for increased income, employment and poverty reduction. This will involve building capacities of the counterpart organizations, the Women Union (WU) branches in Ha Tinh, Quang Binh and Quang Tri Provinces in Central Vietnam. A Rural Resource Center (RRC) will be established in Ha Tinh province under the auspices of the WU. The training courses in enterprise management, appropriate food processing and gender equality will reach trainers who will train 650 entrepreneurs followed by post-training services. The Project will collaborate with several institutions/projects to achieve maximum impact and to enhance sustainability. It will be implemented in close cooperation with Entrepreneurship Development Project for Women in Food Processing in Central Vietnam, Phase I, making use of local capacities created by that project, also executed by UNIDO (this Project being Phase II), and financed by Japan and Belgium in the neighbouring provinces of Da Nang, Thua Thien Hue and Quang Nam. On behalf of: Signature Date Name/Title Government of Vietnam Executing Agency: Government of Finland:

2 TABLE OF CONTENTS LIST OF ABBREVIATIONS 4 A. CONTEXT 5 A.1 Background 5 A.1.1 Pilot project 5 A.1.2 Phase I project 5 A.1.3 Donor interest 5 A.1.4 Why food processing sub-sector 6 A.2 Description of the Sub-sector 6 A.2.1 Backward linkages 6 A.2.2 Industry in rural Central Vietnam 6 A.2.3 Rural household enterprises create employment 6 A.2.4 Food processing sector 7 A.3 Sector Policies 8 A.3.1 Private Sector Development 8 A.3.2 Policies to Promote Rural Industrial Development 8 A.3.3 Enterprise Law 8 A.3.4 Other policy instruments 9 A.3.5 Women in Development 9 A.4 Related Technical Assistance 10 A.4.1 Potential collaboration partners 10 A.4.2 Potential linkages to credit programmes 12 B. PROJECT JUSTIFICATION 12 B.1 Problems to be Addressed 12 B.1.1 Regional imbalance 12 B.1.2 Poverty in rural areas 13 B.1.3 High unemployment and underemployment 13 B.1.4 Training institutes and trainers scarce 13 B.1.5 Enterprise related constraints 13 B.1.6 Women s heavy workload 14 B.1.7 Less training for female entrepreneurs 14 B.1.8 Lower salaries for women 14 B.1.9 Land titles for men 14 B.2 Expected Situation at the End of the Project 14 B.3 Beneficiaries 15 B.4 Project Strategy and Institutional Arrangements 16 B.4.1 Experiences from pilot project 16 B.4.2 UNIDO execution 17 B.4.3 Organisation and management 18 B.4.4 Training strategies 20 B.4.5 Accessing credit 24 B.4.6 Follow-up counselling services 25 B.5 Special Considerations 25 B.6 Compatibility and Sustainability 25 B.6.1 Policy support 25 B.6.2 Ownership by beneficiaries 26 B.6.3 Appropriate technology 26 B.6.4 Environmental protection 26 B.6.5 Socio-cultural issues 27 B.6.6 Gender equality 27 2

3 B.6.7 Economic and financial viability 27 B.6.8 Exit strategy 27 B.7 Counterpart Support Capacity 28 C. DEVELOPMENT OBJECTIVE 29 D. IMMEDIATE OBJECTIVE, OUTPUT AND ACTIVITIES 29 D.1 Immediate Objective 29 D.2 Outputs 29 D.3 Activities 30 E. INPUTS 31 E.1 Government Inputs 31 E.2 UNIDO Inputs 32 F. RISKS 33 G. PRIOR OBLIGATIONS AND PREREQUISITES 33 H. MONITORING, REPORTING AND EVALUATION 34 I. LEGAL CONTEXT 35 Tables: Table 1: Number of Rural Employees in Industry and Construction Sector by Type of Production Unit 7 Table 2: Summary Budget Sheet 32 Annexes: Annex 1: Summary sheet, Pilot Project in Northern Vietnam Annex 2: Summary sheet, Entrepreneurship Development Project for Women in Food Processing in Central Vietnam, Phase I Annex 3: Job Descriptions Annex 4: Work Plan Annex 5: Approach to Training Annex 6: Terms of Reference for Trainers and Entrepreneurs Annex 7: Outline for Logical Framework Annex 8: Project Budget Sheet Annex 9: Commitment by the Women s Union of Ha Tinh 3

4 ADB CEFE COHASIPH CTA FIRI GCAs GoB GoF GoV GTZ HAFREC ILO JPO MARD MOLISA MoU MPI MPDF NAP NCFAW NGO NPD NPM PCU PMRC PPER PRSP QTRDP RRC SC SHG SIYB SME SNV SOE TNA TOT QTRDP UNDP UNICEF UNIDO UNIFEM VCCI VNCPC VND VWU WHO WU LIST OF ABBREVIATIONS - Asian Development Bank - Competency-based Economics through Formation of Entrepreneurs - The Council of Handicraft Small Industry, Co-operatives and Non-State Producers of Hai Phong - Chief Technical Adviser - Food Industry Research Institute - Government Coordinating Agencies - Government of Belgium - Government of Finland - Government of Vietnam - German Technical Assistance - Hanoi Food Research and Experimental Centre - International Labour Organisation - Junior Professional Officer - Ministry of Agriculture and Rural Development - Vietnam Ministry of Labour, Invalids and Social Affairs - Memorandum of Understanding - Ministry of Planning and Investment - Mekong Project Development Facility - The Nordic Assistance Programme in Vietnam - National Committee for the Advancement of Women - Non-governmental organisation - National Project Director - National Project Manager - Project Co-ordinating Unit - Prime Minister s Research Group on SME Development System and Policy - Project Performance Evaluation Report - Poverty Reduction Strategy Paper - Quang Tri Rural Development Programme - Rural Resource Centre - Steering Committee - Self-help Group - Start and Improve Your Business - Small and Medium-sized Enterprise - Netherlands Development Organization - State-owned Enterprise - Training Needs Assessment - Training of Trainers - Quang Tri Rural Development Programme - United Nations Development Programme - United Nations Children's Fund - United Nations Industrial Development Organization - United Nations Development Fund for Women - Vietnam Chamber of Commerce and Industry and Medium Sized Enterprises - Vietnam National Cleaner Production Centre - Vietnam Dong (currency unit) - Vietnam Women's Union - World Health Organization - Women s Union 4

5 A. CONTEXT A.1 Background A1.1 Pilot project In 1994 on the request of the Government of Vietnam (GoV), UNIDO carried out a training needs assessment of women entrepreneurs resulting in a training programme in food processing implemented during with financial assistance from the Government of Belgium (GoB). The project sites were five provinces of Northern Vietnam, namely Hai Phong, Bac Giang, Thai Binh, Hai Duong and Hung Yen (see annex 1, Summary Sheet, Pilot Project in Northern Vietnam). Implementation was undertaken by COHASIPH (Council of Handicrafts, Small Industry, Cooperatives and Non-State producers) in Hai Phong where UNIDO assisted in developing training materials in response to the requirements of the enterprises, and in training 18 trainers and 145 female entrepreneurs. The participatory training programme consisted of management and food processing technology modules for micro and small-scale enterprises. As part of the pilot project, food processing equipment for practicals was installed in the premises of COHASIPH where trainees learned how to apply different food processing equipment such as extractors, boilers, mixers, sterilisers and heat sealers. Towards the end of the project a Tracer Study and an In-depth Evaluation were carried out. The final tripartite review indicated for a need to extend the training programme to other provinces, especially rural areas, as the concept appeared replicable in Vietnam. A.1.2 Phase I project In 2000, a new, but a larger project was developed on capacity building of training institutes in Central Vietnam to support women entrepreneurs in six provinces. Due to inadequate funds, the presently on-going similar project, Entrepreneurship Development Programme for Women in Food Processing in Central Vietnam, Phase I, financed by Japan and Belgium, could cover only three provinces. (See annex 2, Summary Sheet, Entrepreneurship Development Project for Women in Food Processing in Central Vietnam, Phase I.) A.1.3 Donor interest The GoV and UNIDO have approached the Government of Finland (GoF) to support a similar project in three provinces; Ha Tinh, Quang Binh, and Quang Tri. Cost effectiveness and sustainability would improve if both projects could be implemented simultaneously. It should be noted, however, that the Phase I project has been ongoing since November Finland has a long history in supporting Vietnam through a variety of development projects, for example, today through two ongoing rural development programmes, in Quang Tri (since 1996) and in Thua Thien Hue provinces. Full use can be made of the experiences accumulated. The Project can complement the ongoing activities, particularly that of the Quang Tri Rural Development Programme (QTRDP). 5

6 Vietnam is one of the main partners of Finland s development cooperation, and there are plans to strengthen this. As the current Project 1 is well in line with the policies of the Finnish development cooperation, including advocating gender equality and women s economic empowerment, it is considered important to allocate resources accordingly. A.1.4 Why the food processing sub-sector The food processing sector has been selected because of its relatively high value added to agro-products and women s traditional engagement in home-based food processing business. In rural areas supplementary sources of income are needed, in addition to agriculture, which in many cases does not ensure full-time employment to all family members, and adequate household income. A.2 Description of the sub-sector A.2.1 Backward linkages Agriculture is the main economic sector in Vietnam employing more than 80 percent of people and dominated by food crops (about 60 percent) mainly rice, coffee, tea and pepper. Other important sub-sectors are fisheries, dairy and livestock. Since Doi Moi in 1986, agriculture has developed quickly and is being diversified; fruits, vegetables, cashew nuts, groundnuts, coconuts and coffee becoming increasingly important. Today Vietnam is the second largest exporter of rice in the world, while imported agricultural products compete for local ones on the domestic market. Vietnam s potential in agriculture, fisheries and livestock is recognised to be considerable, for both local and export markets. A.2.2 Industry in rural Central Vietnam The GoV has selected several concentrated economic zones for industrial development, the so called triangle zones, including Da Nang-Quang Nam-Quang Ngai in Central Vietnam. The central triangle zone is yet to develop so far, accounting for 2.4 percent of the country s Total gross industrial output. Industries are concentrated around the major cities; out of the Total gross industrial output an estimated percent emanates from urban areas, leaving only an estimated percent for rural areas 2. Therefore the current Project will focus on disadvantaged suburban and, in particular, on rural areas in accordance with government policies on industrialization and SME development. This would not exclude actions in the urban areas where high impact could be created. A.2.3 Rural household enterprises create employment As shown in table 1 below, there are some 2.2 million people in rural areas that receive their main income from industry and construction sector. Another 2 million people in rural areas have temporary or part time work in the sector to supplement farm income. The domestic 1 Entrepreneurship Development Programme for Women in Food Processing in Central Vietnam, Phase II will be referred to in this document as the Project, or Phase II. 2 Rural Industrial Development in Vietnam - Recommendations for a strategy for employment generation and regionally balanced development UNIDO project in co-operation with MARD funded by UNDP,

7 private sector is the dominating source of employment in industry and construction sector accounting for 96 percent of employment. Presently State-owned enterprises (SOEs) and foreign enterprises in rural areas play an insignificant role from an employment generation point of view. Therefore, the focus of the current Project has been placed on rural households whose livelihoods derive from multiple economic activities as well as on off-farm micro/small enterprises. Table 1 Number of Rural Employees in Industry and Construction Sector by Type of Production Unit Type of Unit Number of Units Average Number of Employees Total Number of Employees Percent share of Total Employees Foreign-owned ,000 - State-owned ,000 4 Private 23, , incorporated a/ Non-farm 483, ,450, households b/ Mixed-type 2,000, ,000, households b/ Total full time/ 4,200, part time Source: Various statistical sources and UNIDO/MARD study team estimates. a/ Refers primarily to formal small and medium-sized enterprises. 3 B/ Refers primarily to micro-enterprises, but include also small and medium-sized enterprises. A.2.4 Food processing sector Of all the manufacturing units, including the household enterprises, 36 percent are food and foodstuff manufacturing units. This figure is followed by other agro-product processing (other than food and foodstuff and wood processing) 16 percent, wood processing 15 percent, textiles and garment 13 percent, and production of construction materials 10 percent. In Total, about 80 percent of all rural industries are based on domestic natural resources. There are some 9,000 registered food-processing units in the country of which nearly half are rice mills owned by the State or co-operatives. Private food-processing firms are not yet extensively developed, and are largely operating as micro and household-based businesses as part of the informal sector, mainly managed by women. These enterprises usually have less than five employees, exceptionally up to ten. Many of them engage family members as the only employees, but have a great potential to create substantial employment. The businesses are normally operating without a license processing locally consumed food products, for example, tofu, sweet cakes, rice crackers, noodles and fish sauce. Some technical equipment may be used. In most cases capital investment is less than VND 10 3 According to Document 681/CP-KTN issued by the Government on 20 June 1998, small and medium enterprises, SMEs, have a maximum registered capital of VND 5 billion (USD 387,600 as of the date of issuance) and employ less than 200 persons. The beneficiaries of this project are even smaller enterprises with no registered capital (informal micro-sector). 7

8 million (USD 670) while the average monthly profit is less than VND 1 million (USD 66). In more than 75 percent of cases women s businesses are the main source of family income. A.3 Sector Policies A.3.1 Private Sector Development The GoV has incrementally been introducing a large number of economic reforms since Doi Moi. These include land management reform, price liberalisation, encouragement of private enterprises, financial system and tax reforms towards modernization. During the past two years enterprise policies have been under vigorous development which are enshrined, for example, in the Prime Minister s Decision on Some Policies to Promote Rural Industrial Development, November 2000, the Enterprise Law, 2000, and the Decree of the Government on Supporting Development of Small and Medium Enterprises, November A.3.2 Policies to Promote Rural Industrial Development Rural industries will be promoted entitling them to preferential investments in compliance with market economy. Environmental sustainability receives considerable attention in the policy document. The Preferential Investment Certificate system will detail the rights of the enterprise and ease administrative procedures. Well-developed investment projects are eligible for loans from the Development Support Fund and support to interest rates. In the absence of collateral, a guarantee with third party assets is acceptable. The State will, among others, encourage and facilitate organisations and individuals to mobilise resources to initiate activities in support of consulting, networking, marketing, vocational training and product development. Rural industries can be granted land use permits to assure their investments. There is also a provision to rent land for raw material production. Land use needs of rural industries will be taken into account by local authorities in land use planning. A.3.3 Enterprise Law The Enterprise Law institutes concretely the regulation of Constitution of 1992 that A citizen has the right to do business in compliance with regulations of the law. It has improved the country s investment and business environment significantly impacting the economy as a whole, attracting local investors and public support. It has had positive implications on the external economic relations of Vietnam. The promulgation of the Enterprise Law was followed by a vigorous implementation with about 30 guiding documents having been issued by the end of A large number of new projects have sparked off, many by the non-state sector with domestic capital. During the first 18 months 26,000 new companies, mainly SMEs, were registered under the new law constituting 58 percent of all the 45,000 businesses licensed during Over 5,000 business branches/representative offices were established, more than 4,000 enterprises increased their registered capital and about 8,000 enterprises expanded their businesses. It has been estimated that more than 500,000 new jobs emerged in This indicates that without a vibrant private sector and SMEs the government alone would have difficulties in creating the 1,3-1,5 million new jobs required annually. 8

9 A.3.4 Other policy instruments According to the Strategy for Socio-economic Development, SME industrial establishments should be extensively developed by using local raw materials, applying labour intensive technologies, improving quality control and observing environmental protection. One of the aims of the SMEs is to increase income of the rural population for poverty reduction. Gender equality and women s advancement should be taken into account. Since 1999, the Prime Minister s Research Group on SME Development System and Policy (PMRC) has prepared, with UNIDO assistance, the first ever Decree on SME Promotion Policy, which has been promulgated. This will facilitate the establishment of the necessary supportive infrastructure for SMEs and make administration procedures simpler and more transparent. The GoV is also currently planning to revise the Constitution 1992 to include the private economic sector, small shopkeepers and foreign-invested sector (Clause 1 of Article 16) for creation of a more enabling business environment than before. A.3.5 Women in Development The GoV is committed to promote the integration of women into the national development process without discrimination. The Constitution of 1992 states that "Female and male citizens are equal in political, social, cultural, economic and family matters" (Article 54) and "Female and male workers and employees who are doing similar work shall be equally paid" (Article 63). Despite the fact that the legal framework depicts gender equality, in practice, cultural norms constrain its full realisation in the family, work place and society in general. The National Plan of Action for the Advancement of Women (1998) included a considerable number of policy objectives. Particularly relevant to the current Project were the promotion of job opportunities and income generation for women, enhanced role and status of women in leadership and management, protection and promotion of women s rights, and enhancement of women organisations capacity. A new ambitious National Strategy for the Advancement of Women (December ) has five objectives: (i) to implement women s rights in the labour market; (ii) in education; (iii) health; (iv) to improve the quality and effectiveness of women s contribution to politics, economy, culture and society in order to increase the number of women appointed and voted to leadership positions; and (v) strengthening capacity of those working for women s advancement. Significant to the strategy is that each objective has quantifiable indicators, and the organisation and implementation strategy is spelled out. The Vietnam Women's Union (VWU), was established in 1930 and is the party mass organization with a mandate to protect the legitimate and legal rights and interests of women, and to create conditions for women to realize equality and development. The Union has 11 million members covering all provinces and districts. It employs 200 staff at the central level, 1,200 at provincial and municipal level consisting of 61 units, and 3,000 people at district level with 601 units, and 11,000 in communes with 10,331 units. 9

10 The GoV has initiated or supported the establishment of several other institutions to promote women in development, such as the National Commission for the Advancement of Women (NCFAW), the Female Workers Department (Central Labour Union), the Centre for Family and Women Studies (National Center for Social Sciences and Humanities), and the Center for Research on Female Employment under the Ministry of Labour, Invalids and Social Affairs (MOLISA). Women entrepreneurship development forms an essential part of the current policy as emphasised in Resolution 31/CP of the Council of the Government: Providing opportunities for women to improve their knowledge and skill through strengthening training, retraining and employment activities represents one of the major concerns of the state and government for years. The main idea is to strengthen training, organize and employ cadres and retrain them for better performance. A.4 Related Technical Assistance A.4.1 Potential collaboration partners The GoV implements technical assistance projects to promote women in development with assistance from multilateral (e.g. ADB, UNDP, UNIDO and WHO) and bilateral co-operation programmes (e.g. Canada, Belgium, the Netherlands, Sweden) and with many NGOs. The pilot project in Northern Vietnam collaborated closely with UNIFEM, UNICEF, Hanoi Food Research and Experimental Center (HAFREC), Food Industry Research Institute (FIRI), University of Hanoi and Free University of Brussels. The Project will cooperate with ongoing technical cooperation projects of bi- and multilateral agencies and organisations. As part of UNIDO's preparatory activities related to the Phase I in Da Nang, tentative collaboration agreements have been reached with Mekong Project Development Facility (MPDF), the Netherlands Development Organisation (SNV), UNDP, UNIFEM/Oxfam, Vietnam National Cleaner Production Centre (VNCPC), GTZ, ILO and WHO. The main partner will be the on-going Women Entrepreneurship Development Project, Phase I in the three neighbouring provinces. Establishment of adequate linkages between Da Nang (Phase I) and Ha Tinh RRCs as well as the other four provincial WU branches during implementation (of Phase I and II) can better sustain results after the Project closure. It has been agreed that policy advice, exchange of trainers and international experts, development and distribution of information material and the revision of the Training Manual are among the issues to be shared with the projects and counterparts. The Project will seek cooperation and synergy at least with the following ongoing activities: The GoF is supporting QTRDP since 1996, and was one of the very first donor financed programmes in the province. The QTRDP is multi-disciplinary, its activities ranging from infrastructure building and rehabilitation such as roads and bridges, to supporting minorities, and training. In terms of supporting women, it has extended credit, training and extension services to them in a variety of fields. It will be instrumental to draw on the relatively long experience of the QTRDP as well as to explore points of collaboration. 10

11 Much of this applies to the rural development project in Thua Thien Hue as well. Gender equality as well as participatory management approaches are fundamental strategies of both programmes. WHO and Food Administration of Vietnam programme which will undertake a needs assessment in developing training materials for small food manufacturing enterprises in the application of good hygienic practice and good manufacturing practice. Phase I project has been working with WHO (WHO contribution to the manuals on food-borne diseases and staff to be trained by WHO) The two-year project on Training for Women in Micro and Small Enterprises, Phase 2 (TWMSE2) which is currently implemented by Maastricht School of Management together with Vietnam Women s Union (VWU) Hanoi and funded by the Dutch Government. Information exchange with this project has already started in Phase I. Oxfam, Canada is implementing a project with VWU on Women and Rural Development ( ). The project objectives are to strengthen and promote management, training and counselling capacity of women cadres at provincial and district level in the Northern and Southern Vietnam to support women in developing their household economy, particularly small-scale enterprises. The German Technical Assistance (GTZ), through the Co-operative Union of Vietnam in Hanoi is implementing a nation-wide entrepreneurship training programme based on the Competency-based Economics for the Formation of Entrepreneurs (CEFE) method. Together with the Mekong Project Development Facility (MPDF), partly funded by the GoF, the Project will investigate the possibility of trainer exchange. The target group of the company advisory assistance of MPDF is private entrepreneurs with asset investment plans of at least USD 100,000. It will be essential to find out whether these trainers skills extend also to addressing the needs of small-scale enterprises before commitment. ILO is implementing the project Start and Improve Your Business (SIYB). One of the activities carried out is business training for women entrepreneurs. The ILO materials have been developed over many years and may prove relevant in the management modules. In all collaborative instances with other institutions/projects careful cost-benefit analysis of purchase/rights to materials and other resources need to be made by the Project management. In case the Project is in the position to develop its own material in a more cost effective way than to purchase it /together with the Phase I project, the most cost effective option should prevail. Cost sharing with Phase I project will be undertaken on a 50/50 percent basis. Co-operation with projects and institutions will be formalised, if necessary, through a Memorandum of Understanding (MoU) once the Project commences. A.4.2 Potential linkages to credit programmes 11

12 In view of credit facilities the following technical cooperation projects and programmes have shown interest in linking with the present Project in view of credit facilities: The UNDP-funded poverty alleviation programme, "Strengthening capacity for hunger eradication and poverty reduction", covers six provincial projects, including Quang Binh and Quang Tri provinces, and two pipeline projects. The objective is income generation and promotion of micro-enterprises in rural areas through grassroots level training, provision of credit facilities and counselling. UNICEF supports credit and savings schemes for income generating activities in 25 provinces. It has reached 60,000 poor women with the objective of 75,000. The Nordic Assistance Programme in Vietnam (NAP) has a successful credit programme in Hue. In Quang Binh and Quang Tri provinces, SNV is implementing a project on "Genderconscious Non-agricultural Employment" which provides micro-credit and business skills training to women, the local Women's Union being the counterpart. Action Aid and Oxfam UK, in Ha Tinh province, and World Vision in Quang Tri and Quang Nam provinces have micro-credit and savings programmes targeting women. Improvement of the VWU s capacity in the management of credit and savings programmes for poor women, Vietnam-Belgium Credit programme. There are some new bilateral donors investigating possibilities to establish micro-credit programmes. Efforts will be made to create linkages with these. In addition, the Vietnam Bank for the Poor and the Vietnam Bank for Agriculture and Rural Development will be contacted for collaboration. B. PROJECT JUSTIFICATION B.1 Problems to be Addressed B.1.1 Regional imbalance The overall economic growth of Vietnam has sharpened regional imbalance which affects particularly Central Vietnam, being less developed and offering far less employment opportunities than, for example, areas in and around Hanoi and Ho Chi Minh City. The GoV is fully aware of the situation and is addressing this challenge through various instruments. 12

13 B.1.2 Poverty in rural areas Poverty is concentrated in rural areas while urban areas have lower poverty incidence. The GoV has identified the poorest communes in the country where a variety of projects are ongoing. Accelerated private business activity in the rural areas, such as food-processing, is a highly realistic option when combating rural poverty especially in the light of recent positive private enterprise policy developments. B.1.3 High unemployment and underemployment In order to ensure the subsistence of their families many rural households are taking up small-scale entrepreneurial activities for survival. A large part of farms are small, often with low productivity and/or mono-cropping, and provide effective employment to only a few family members, and even in this case often only seasonally. A considerable part of the rural population is either unemployed or underemployed which is a serious concern to the GoV. The potential of small businesses is recognized as an important means to create employment. B.1.4 Training institutes and trainers scarce A field survey during the Project formulation made it clear that there are very few training institutes in Central Vietnam to assist household enterprises in their development. Other actors to guide, counsel and encourage entrepreneurs are equally scarce including qualified trainers. Existing training programmes are focusing mainly on general management skills while food technologies, product development, quality and hygiene aspects are hardly touched upon. B.1.5 Enterprise-related constraints Markets for food processing products are expanding with the rapid urbanisation and market orientation of the economy. In spite of its potential, the development suffers under many constraints in: (i) production conditions resulting in poor product quality; (ii) technology know-how (iii) hygienic conditions of the food processing units; (iv) new product ideas, product development, and marketing; (v) enterprise management; (vi) space availability for enterprise operations; (vii) capital and access to credit, (viii) market-oriented attitudes, and (ix) market information. The problem analysis undertaken during the pilot project confirms the above and revealed that the root causes of low efficiency and limited expansion capacities of women s smallscale enterprises stem from (i) limited access to business training, (ii) inadequate number of trained trainers, (iii) limited access to appropriate technology, (iv) lack of access to credit, and (v) limited access to marketing and product development information. 13

14 B.1.6 Women s heavy workload Rural women work significantly longer (12,5 hours/day) than rural men because of women s major responsibility for reproductive work/household chores for which women spend 3-4 hours per day compared with men s 15 minutes. B.1.7 Less training for female entrepreneurs Technology and industry statistics from show that only 19.9 percent of women entrepreneurs have received training while it was 47.2 percent for men. The average number of hours worked by women in manufacturing equals the hours worked by men. B1.8 Lower salaries for women Women s salaries in off-farm activities are lower than those of men. Firstly, because typically female dominated areas, for example, food processing, embroidery, tailoring, production of rush products and trading, earn less than where men are occupied such as machine operations, carpentry, mechanical manufacturing and transport. According to a field survey, women earned VND 5-15,000 (USD 0.5-1) per day while the same figure for men was VND 15-30,000 (USD 1-2). Secondly, within enterprises, men rather than women, hold jobs on higher organizational levels where better-paid jobs exist. Thirdly, women are often paid less than men for the same job. An overview of the situation in the food and manufacturing sector illustrated that almost 50 percent of the units are operated by women, salaries averaging 72 percent of those of men. B.1.9 Land titles for men Land use certificates, having usually been issued in the name of the husband, is discriminating against women. This can cause problems in the case of divorce or when the certificate is needed for collateral. According to the new law both husband s and wife s names should appear on the certificate, however, implementation faces difficulties. B.2 Expected Situation at the End of the Project At the end of the Project the following achievements are expected: The TNA and the baseline study have been carried out to be able to focus the activities of the project on the needs of the target group and to overcome its problems and constraints in the food processing sub-sector. The capacity of the three Women Union branches has been strengthened to manage this project and to co-ordinate training programmes for entrepreneurs; The RRC and the (mobile) technology unit at the WU branch of Ha Tinh province have been established, are operational and provide services. At least two to three trained trainers are attached to, and continue giving training at the RRC after the Project closure. 14

15 Training modules have been revised and adapted, and are available in Vietnamese and English; trained trainers attached to institutions in the three provinces are conducting training, and will be available after the Project closure. The project will make an effort to also train young university graduates as trainers. 650 entrepreneurs, mainly women, in the food processing sector representing micro and small-scale businesses have been trained. The turnover, net revenue, and/or capital investment of their businesses have improved. New jobs have been created. Linkages with credit facilities will have been created. A considerable part of the trained entrepreneurs will have obtained credit as a result of their improved skills and feasible business plans. It should be noted, however, that the project will not be involved in micro credit business, it will create the capacity among women entrepreneurs to obtain and manage credits and will link them up to the existing credit facilities; Self-help groups (SHG) for women entrepreneurs will have been established, (existing ones strengthened) are operational and benefit entrepreneurs. A monitoring/counselling system to trace both quantitative and qualitative outcomes has been established to follow-up, is operational and produces high quality information on indicators on the performances of the trained entrepreneurs businesses, e.g. increased productivity, sales, income; improved hygiene, quality, business management skills such as marketing; creation of employment opportunities, etc. A viable strategy has been developed and is available on how the Project activities will sustain themselves after the Project closure. This can include a possible commitment by Vietnamese authorities, projects/institutions to continue training and supporting entrepreneurs. (This document offers some options but throughout the project, these options will be assessed and all activities will be directed towards sustainability to the extent possible. An exit strategy will be finalised during the last year of the Project and will be presented to the last tripartite review meeting) B.3 Beneficiaries The major beneficiaries are: (i) 650 entrepreneurs, mainly female, engaged in food processing business in the three provinces, (ii) the WU branches of Ha Tinh, Quang Binh and Quang Tri, (iii) the RRC of Ha Tinh WU, (iv) professional trainers who will be trained through the Training of Trainers (TOT), (v) men, particularly spouses of trainees and those who participate in the self-help groups, and (vi) related institutions and projects with whom partnerships will be created. The primary Project beneficiaries are women already involved in small-scale householdbased food processing or independent production units, are interested as well as committed to 15

16 develop and expand their businesses for commercialisation, increased income, and employment creation. Some of them have the potential to evolve to formal SMEs. The Project will investigate during the training needs assessment (TNA) whether a special training course for new entrants to the food processing sector is justified. This may be the case if, for example, special credit facilities are readily available for start-up businesses. Most likely, the participating female entrepreneurs would not be the poorest of the poor who then would face difficulties in obtaining credit as well as paying it back. However, there are many other projects in the region which target the poorest of the poor. The current Project will focus on the potential of the selected enterprises to reduce poverty through increased income, employment creation and increased economic activity in their area of operation. Men, particularly spouses of trainees, will be involved in training. Their participation is essential for the understanding of the enterprise development support as well as the gender equality aspects of the Project. Other beneficiaries are discussed elsewhere in the document. The success of a technical assistance project depends very much on its focus, particularly of its clients. B.4 Project Strategy and Institutional Arrangements B.4.1 Experiences from pilot project Several important lessons and experiences have been learnt in the pilot project, the full use of which will be made in the Phase II. These have been analysed, translated into improvements and integrated into this Draft Appraisal Document. Many of them call for resources such as preparation of a baseline survey of enterprises, the TNA, the selection process of trainers and entrepreneurs but also increase the quality of outcomes. The most notable experiences are: Counterpart staff responsibilities need to be adequately elaborated before the project starts; Adequate budget provision for training programmes needs to be made; A TNA is necessary. There ought to be a continuous refinement and re-adaptation of the materials to suit the beneficiaries requirements in the respective level of their development. 4 ; It is essential to prepare a baseline survey 5 in order to establish the initial position of participating enterprises. Without this, it will be difficult to trace, through monitoring and evaluation, quantitative and qualitative development and expansion of enterprises; The training programme will have to have a clear focus regarding beneficiaries needs. A clear differentiation is necessary between entrepreneurs operating at the household level and those operating formal small businesses; 4 Training Programme for Women Entrepreneurs in the Food-processing Sector, Report of the Evaluation Mission, 24 February 1998, p. 24, (the Pilot Project Evaluation in Northern Vietnam). 5 This can well be executed as a module of TOT course at a stage when trainees have been selected. 16

17 In the first instance only those technologies which are of immediate relevance to trainees should be demonstrated instead of making participants undergo too wide a spectrum of different technologies; adaptation has been affected in Phase I; It is necessary to split the entire training programme into shorter course periods to enable women entrepreneurs to attend, at least partly, to their regular business activities and domestic chores. This will also reduce the pressure on the Project of having to pay a participation allowance to trainees; Selection procedures (of trainers, trainees and other beneficiaries) need to be open and transparent to avoid inefficiencies which undermine the Project outcome, make it less cost effective, and deprive qualified candidates with merit a chance to develop themselves. Therefore, clear selection criteria are established and followed. This ensures that groups of trainees, both entrepreneurs as well as trainers, are relatively homogeneous in terms of their motivation, profile and learning capacity facilitating a higher learning impact and ultimately the Project outcome; The applications for the post of the NPM should be carefully screened by UNIDO and followed up with personal interviews to ensure that applicants fulfil the necessary technical and managerial background as well as appropriate language capabilities. An adequate number of candidates, from where the selection is made, should be made available; Adequate attention to sustainability aspects is necessary right from the beginning. These include capacity of counterpart organisations, their infrastructure, strategic planning skills, and the financial potential to continue after the Project closure and/or to devise alternative institutional arrangements whereby full use will be made of trainers skills; Introduction of systematic follow-up counselling services in the post training phase are essential to support the entrepreneurs in the practical application of the knowledge and skills conveyed during the course; Participatory adult education methods need to be part of the TOT. All of these are foreseen and stipulated in the proposal submitted as they are the principal pillars of the project. They have also been incorporated in the Phase I project. B.4.2 UNIDO execution UNIDO has the technical expertise required and more than 30 years experience in the subsector-specific training programmes in more than 100 developing countries. UNIDO has a good global network to recruit experienced national and international experts. It has already developed training manuals adapted to the Vietnamese situation, other appropriate training materials and technical know-how, mainly through the pilot project in Northern Vietnam. These will be further adapted to the local context for the provinces covered by this Project as a result of the TNAs. The Project will be executed by UNIDO primarily due to limited capacity and experience of the counterpart organisations, the WU branches. In general, the institutional infrastructure and human resources are still relatively weak in Central Vietnam. The large number of existing micro and small enterprises are not yet well developed, so far having only limited access to support. 17

18 The Project requires extensive co-ordination between the WU branches, the RRC, the provincial authorities of the three provinces, the sister project, and multi- and bilateral programmes. Co-ordination also needs to be managed between other multi- and bilateral programmes and UNIDO. The local capacity to co-ordinate this type of project is still limited. The capacities of the WUs will be strengthened through fully involving them in dayto-day activities for learning purposes and to empower them to continue upon the Project closure. The organization of seminars and local training activities will follow practices tested under other UNIDO-executed programmes in Vietnam which, by placing managerial and financial responsibility onto the counterpart agency, strike a sensible compromise between UNIDOand national-execution schemes. The Project will be required to produce on a quarterly basis work plans with cost estimates of forthcoming training initiatives. Upon clearance by the project manager at UNIDO headquarters, the UNIDO Country Office in Vietnam will transfer the amount required to the Project, which will be responsible for the organization of the training and the management of the funds earmarked for that purpose. At the end of the Quarter, the Project will submit the UNIDO Country Office an itemized list of expenditures with adequate evidence of payment, upon which UNIDO will release training funds for the next Quarter. UNIDO s Integrated Programme for Vietnam focuses on SME and Women Entrepreneurship, Rural Development, and Environmentally Sustainable Industrial Development. Full use will be made of the organisation s expertise by linking the Project to other on-going UNIDO projects in Vietnam, notably to Assistance to Small and Medium Enterprises (US/VIE/95/004) and Rural Industrial Development for Employment and Income Generation (VIE/98/022), in particular, and to the Integrated Programme, in general. B.4.3 Organisation and management Competent authorities The Competent Authorities of the Project are (i) the Government Coordinating Agencies (including MPI, Ministry of Finance, Office of Government, Ministry of Foreign Affairs), (ii) the Ha Tinh WU, (iii) the GoF, the donor and (iv) UNIDO being the executing agency. Annual Tripartite Review (TPR) The Annual Tripartite Review is an annual joint review by representatives of the GCAs, the People s Committee of Ha Tinh, UNIDO, the GoF, the WU branch of Ha Tinh, the WU branches of Quang Binh and Quang Tri, and other relevant government agencies. The Annual Tripartite Meeting is the highest decision making body of the Project. The TPR can redirect some of the activities of the project in case of newly emerging needs or requirements. The first review meeting will be held within 12 months from the start of implementation. The Chief Technical Adviser (CTA) and the National Project Manager (NPM) together with the National Project Director (NPD) will prepare and submit, at least one month before the meeting, a Self Evaluation Report (SER). For the terminal Tripartite Review meeting, a Project Terminal Report will be prepared, also at least one month prior to the meeting and submitted to all participants. 18

19 The Annual Tripartite Review meeting will approve annual work plans. The UNIDO Project Manager can make budget revisions according to emerging needs, in consultation with the CTA, NPM and NPD, informing the donor in each case. Steering Committee A Steering Committee (SC) will be established to monitor and give technical advice to the Project. The Committee will meet at least once every six months and is composed of the following fixed members: the NPD representing the People s Committee of Ha Tinh, the Chairpersons of the Women s Unions of Ha Tinh, Quang Binh and Quang Tri provinces; the CTA, the NPM; the UNIDO Representative or his/her appointee; and a representative of the GoF. Depending on the agenda, other persons could be invited such as representatives of collaborating partners, the VWU, Hanoi and external consultants at the time of their engagement in the Project. The SC is not the highest decision making body but provides guidance in project implementation, it can also make recommendations to the TPR. Direct counterpart organisation The Ha Tinh WU will be the direct counterpart of the Project where the Project Coordination Unit (PCU) office will be established. It will have the overall coordination and organisation role. All the tools and manuals prepared will be disseminated from Ha Tinh. Reporting, Project meetings, financial management, main monitoring, and similar duties will be undertaken by the PCU. The RRC will be established at the Women s Union in Ha Tinh which will be in charge of co-ordinating and organising training sessions in different municipalities, districts, and communes and can be housed in the same premises with the PCU if possible. The Ha Tinh s WU which will provide and meet the costs of the premises, clean working environment, running water, drainage, adequate lighting, and maintenance costs for the technology practice facilities. Role of Quang Binh and Quang Tri WUs The Quang Binh and Quang Tri WU branches will have small offices for coordinating and implementing the activities in their own areas. E.g. they will carry out the TNA exercises in their respective provinces, organise the training workshops, liaise with women entrepreneurs, link up to other technical and other relevant institutions and ongoing projects in their own area, share the information and coordinate all their activities with the other WUs. Project Coordination Unit The implementation of the Project is co-ordinated through the PCU based in the Ha Tinh WU. In all operational matters, the PCU will be an autonomous organ under the direction of UNIDO. The PCU is in charge of all daily Project decision-making, management and administration coordinating all Project activities, planning and implementation, engaging partner organisations and external experts. Particularly important will be the coordination of Project activities with/between the three provinces. The PCU makes independent decisions within the framework of the Project document, approved annual work plans and budgets, decisions by the Tripartite meeting, and instructions from UNIDO, considering the advice of the Steering Committee. Project staff 19

20 The NPD, who is provided by the GoV including his/her remuneration, has an important promoting, advisory and liaison role contributing to the smooth implementation and the success of the Project. The NPD works closely with, and facilitates the work of the CTA and the NPM. S/he reports to the Tripartite Review Meeting on the issues related to his/her job description. An international CTA and a full-time highly qualified Vietnamese NPM are recruited by UNIDO, both paid from the Project budget. The day-to-day administration and management of the PCU are the joint responsibility of the NPM and the CTA. The NPM reports to the CTA who reports to the Project Manager of UNIDO, based in the UNIDO Headquarters in Vienna. UNIDO requires two signatories in the use of funds. They will be the CTA and the NPM as both will be responsible and accountable to the Project Manager of UNIDO. Job descriptions are given in Annex 3. Other required support staff will be recruited by the PCU and funded from the Project budget. These can include an (i) Administrative Officer, and (ii) a Programme Secretary/Interpreter, (iii) one driver, and (iv) a food technologist. The WU staff and officials working with the Project are paid from the respective WU budgets. Meetings Joint management and coordination meetings will be organised together with Phase I when necessary, but at least once each quarter, to ensure adequate linkage and communication while at the same time acting as a forum for training and capacity building for the WU branch staff and leaders. Other joint meetings, for example, with partner organisations can be arranged. Audit and financial control The standard auditing and financial control mechanisms of UNIDO will be applied in the Project. B.4.4 Training strategies Training of entrepreneurs The Project will aim at training 650 enterprise owners/food processors. During the first year, the project office will be established, and the necessary staff will be recruited, the TNAs will be carried out as well as the baseline study of the enterprises and their needs, the training manuals will be adapted according to the results of the TNAs and translated into Vietnamese, and food processing equipment will be purchased for the practice room. This will mean that there will be time for organising two training courses during the first year for the trainers (TOTs). There may be time for one pilot training course in each province (20 x 3 = 60). As of the beginning of the second year, five courses will be organised during the second and third years (5 x 20 x 3 = 300 per year) thereby totalling 660 entrepreneurs. It should be noted that changes in agricultural calendar due to usual floods in the region may influence this calculation. 20