Private entrepreneurship, local livelihoods and rural transforma5on in the Mekong Delta, Vietnam

Transcription

1 Private entrepreneurship, local livelihoods and rural transforma5on in the Mekong Delta, Vietnam 20 June 2013 Serge Birtel, Simon Benedikter & Gabi Waibel WISDOM project (Water- related Informa=on System for the Sustainable Development of the Mekong Delta) Center for Development Research () University of Bonn Slide 1

2 Outline! Background: Small private enterprise development in Vietnam! Context: Livelihoods and rural transforma=on in the Mekong Delta! Case study! Research objec=ves! Enterprise profiles in Can Tho City! Livelihoods of rural entrepreneurs! Conclusion & policy recommenda=ons Slide 2

3 Background: Small private enterprise development in Vietnam Number of registered enterprises in Vietnam (GSO 2010) Small enterprises 95.7% of all registered enterprises 85% of the workforce 39% of the GDP (GSO 2010) Private enterprises State- owend enterprises GSO (2010): Enterprises in Vietnam during the first nine year of 21st century. Hanoi: General Statistics Office. Slide 3

4 Background: Small private enterprise development in Vietnam! Private sector development since 1986! Boost with 2001 Enterprise Law! SME Development Plan ! SME defini=on! registered under law,! have less than 10 billion VND ( USD) of capital, and! not more than 300 employees.! Growth- vs. livelihood- oriented enterprises Slide 4

5 Case study area Slide 5

6 Context: Livelihoods and rural transforma5on in the Mekong Delta Slide 6

7 Research objec5ves 1. Capture and understand the development of SMEs as an important dimension of socio- economic transforma=on in the Mekong Delta 2. Iden=fy the local SME profiles 3. Assess the role of SMEs for the local labor market Slide 7

8 Data and methods! Secondary data analysis! Preliminary field visits! Expert interviews with district and provincial agencies! Ques5onnaire based survey! 197 proprietors or managers of private businesses! 95 employees of SMEs! 12 Focus group discussions with residents of the study area! Stakeholder workshop: Presenta=on and discussion of preliminary results Slide 8

9 Enterprise profiles in Can Tho City! Dominance of micro- or household- based enterprises! 91% are micro enterprises! 47% are household- based (family- run or self- employed)! Average number of employees is with 3.5 far below the na=onal average of 40 employees 9% 0% 91% SME type Informality Micro enterprise (0-9 employees) Small enterprise (10-49 employees) Medium enterprise ( employees)! Half of the enterprises are not registered and thus do not pay taxes 49% 51% Registered Unregistered Slide 9

10 Enterprise profiles in Can Tho City! Majority of enterpriss has no registered capital! Average registered capital: 250 million VND! Na=onal average: 1.8 billion VND! Enterprise owners rarely received bank loans for their business establishment Registered capital of enterprise No charter capital up to VND 2 million VND 2-20 million VND millon VND million VND 400 million - 13 billion 9% 7% 11% 53% 13% 7% Most important financial source 63% 19% Bank loans Own savings 15% 3% Friends and family in Vietnam Private money lender(s) Slide 10

11 Enterprise profiles in Can Tho City! Bulk of enterprises in the service and trade sector! Half of the entrepreneurs are women Business sector 14% Manufacturing 38% 48% Service Trade! Embedded in the local market! Major Constraints! Lack of access to credit! Strong compe==on! Low demand Sex ra5o of entrepreneurs 51% 49% Male Female Slide 11

12 Enterprise profiles in Can Tho City Household businesses in the informal sector Micro enterprises Share in survey 47% 45% 7% Small manufacturing enterprises Business sector Service (& trade) Trade Manufacturing Employees Help of family members 2-3 employees 18 employees Informality 91% 20% 0% Gender 58% male 60% female 83% male Products/ services Motorbike service, coffee shop Construc=on materials, agricultural utensils Rice processing, wood processing, petrol Capital 5.5 million VND 110 million VND 1.8 billion VND Turnover 46 million VND 460 million VND 17 billion VND Self- employment 53% 10% 8% Slide 12

13 Enterprise profiles in Can Tho City 35 Year of establishment Group 3 Group 2 Group Slide 13

14 Livelihoods of private entrepreneurs Slide 14

15 Livelihoods of private entrepreneurs! Shif from agriculture to off- farm ac=vi=es! Main ra=onale is income diversifica=on and beger livelihood opportuni=es especially for young people! Households are engaged in other off- farm ac=vi=es! Many households are landless: home as the working place! Low educa=onal level! Government policies rarely affected enterprise owners, and enterprise owners rarely received trainings from state departments! Livelihood- oriented entrepreneurs dominate the enterprise landscape in Can Tho City Slide 15

16 Livelihoods of private entrepreneurs! Livelihood- oriented entrepreneurs! Risk aversion, low capital investment and produc=vity! Provide off- farm livelihood opportuni=es for underemployed and landless households! Important contribu=on to poverty reduc=on! Growth- oriented entrepreneurs! Contribute to off- farm labor markets! High investment and return above subsistence level! High survival rate! Entrepreneurs have non- farm backgrounds Slide 16

17 Conclusion! Private enterprise development important for livelihood diversifica=on and socio- economic development! In contrast to the vision of moderniza=on and industrializa=on, the majority of enterprises are micro- or household- based enterprises opera=ng at subsistence level! Small and medium sized enterprises are the excep=on rather than the rule in Can Tho City! Household business is an important livelihood strategy for income diversifica=on and escaping unemployment Slide 17

18 Conclusion! Enterprises in rural areas in Vietnam are considerably smaller and have less capital and turnover than in urban areas! Livelihood perspec=ve enables to understand mo=va=ons and ra=onale for rural entrepreneurship! Differen=a=on between growth- and livelihood- oriented entrepreneurs necessary! Constraints faced by household businesses lead to a low survival rate Slide 18

19 Recommenda5ons for a suppor5ve policy framework! Specific policies tailored to livelihood- oriented enterprises and household based enterprises! Financial assistance for the smallest enterprises (micro- credit scheme?)! Support the diversifica=on of products/services provided by the enterprises through voca=onal trainings Slide 19

20 Thank you for your axen5on Contact: Serge Birtel Center for Development Research (), University of Bonn + (0) serge.birtel@uni- bonn.de Slide 20

21 References! Beresford, M. (2008). Doi Moi in review: The challenges of building market socialism in Vietnam. Journal of Contemporary Asia, 38(2), ! Berner, E., Gomez, G. & Knorringa, P. (2012): Helping a Large Number of People Become a Ligle Less Poor - The Logic of Survival Entrepreneurs. European Journal of Development Research 24, ! CIEM. (2010): Characteris=cs of the Vietnamese Business Environment: Evidence from a SME Survey in Copenhagen: Central Ins=tute for Economic Management (CIEM), The Ins=tute of Labour Science and Social Affairs (ILSSA), Department of Economics (DoE) of the University of Copenhagen.! Ellis, F. (2000): Rural livelihoods and diversity in developing countries. Oxford: Oxford University Press.! GSO (2010): Enterprises in Vietnam during the first nine year of 21st century. Hanoi: General Sta=s=cs Office.! Hansen, H., Rand, J., & Tarp, F. (2009). Enterprise Growth and Survival in Vietnam: Does Government Support Mager? Journal of Development Studies, 45(7), ! Mead, D. C., & Liedholm, C. (1998). The dynamics of micro and small enterprises in developing countries. World Development, 26(1), ! Ministry of Planning and Investment (ASMED) (2008). Small & Medium Enterprises in Vietnam. Hanoi.! Nguyen Tri Thanh. (2007). Entrepreuner Development for Compe==ve SMEs - Overview and Development Strategy. In Asian Produc=vity Organiza=on (Ed.), Entrepreneurship Development for Compe==ve Small and Medium Enterprises (pp ). Tokio: Asian Produc=vity Organiza=on (APO).! Oostendorp, R. H., Tran Quoc Trung, & Nguyen Thanh Tung. (2009). The Changing Role of Non- Farm Household Enterprises in Vietnam. World Development, 37(3), ! Rand, J., & Torm, N. (2012). The Benefits of Formaliza=on: Evidence from Vietnamese Manufacturing SMEs. World Development, 40(5), ! VCCI, & ILO in Vietnam. (2007). Women s Entrepreneurship Development in Vietnam.! World Bank (2005): Vietnam Development Report Business. Joint Donor Report to the Vietnam Consulta=ve Group Mee=ng, Hanoi, December 6-7, Hanoi: Vietnam Consulta=ve Group Mee=ng. Slide 21