Reinventing CSOs -policy
makers - private sector
relations in economic
integration in Vietnam
The Country Views
By Ngo Huong
Vice-Director, Center for Development and
Integration
www.cdivietnam.org
Presentation at the AfT Conference for CSOs
Narobi, 15-16 March 2007
Outlines
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Free Trade and Economic integration vs.
national trade policy and policy making
mechanism
Trade Policies: challenges, obstacles
Case on Footwear and Leather Sector
CSOs and Policy makers
CSOs and Private sector
The recommended strategies for effective
alliance in advocating trade policies
Vietnam after being full member of
WTO
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TO be compliance with international standards through
effective legal system, good political economic system, a
rule of law state
Vietnam to be accountable, transparent, non-discriminated
in trade
To Remain healthy competition and open for market
economy mechanism through enabling full participation of
stakeholders and society
To cope with possible social impacts
To remain the open investment environment: foreign
investment with equal treatment incl. finance, banking
market, telecommunication etc.
Trade Forums (APEC 2006, ASEM 5, ASEAN) open for trade
cooperation and promotion through structural reforms;
legal infrastructure, financial markets, corporate
governance etc.
Balancing economic growth and social equity
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Economic integration opens for
more market, increase
competitiveness and competitive
advantages for Vietnam’s
industries
Private sector grow faster under
the support of the Government,
Associations
However, social issues emerge
like rapid labor mobility from rural
to urban, workers lack of
knowledge, skills; poor living and
working conditions. etc.
Key challenges and constraints for
Trade policies
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The external challenges: pressure from buyers;
competitive capability in price and quality
standards;
The internal constraints: weak management and
low competitiveness; low level of labor skills,
unstable labor forces;
Political obstacle: limited democracy and voice
for trade policy
Institutional gaps in undertaking trade policies
and policy making; weak public administration
and facilities for business environment
The weak CSOs: (only Bill on Association);
limited CSOs role in claiming the rights of
consumers
Example:
Footwear and Garment-Textile
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After joining WTO, Vietnam with increased exports to USA, EU
and other markets – But the most benefits go to foreign
invested companies or joint ventures
• (Garment sector accounts for 15-17% total export value, footwear
11-13% (2002-2004)
• Sector with Private owned dominate: only 20% state-owned, 3440% foreign invested, that challenges the welfare mechanism and
social benefits to employees
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Vietnam WTO accession force the sectors to be more
competitive in price and quality and with international rules
Intensive labor but mostly from rural areas hence with low
quality of labor skills, unstable and high turnover rate and
difficulties in living conditions
The recent Anti-dumping initiated by EC force Vietnam and
private sector to find ways to be more competitive and
Government to review the trade policies and have policies to
protect workers at job risks..
The workers’ perspectives –
claiming private sector*
Corporates need to be responsible
for their employees by improving
working conditions and labor
relationship because the negative
possible impact of long working
hours, low wage, lack of training
and information laid on spirit,
health, rights and hence creating
unstable labor and low productivity
will challenge the sustainable
economic integration.
*Source: Research on migrant workers (Trade Unions, 2003-2004, CDI2005)
Impact of growth to poverty reduction
Garment and footwear sector
800000
700000
600000
500000
400000
300000
200000
100000
0
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These two sectors
contribute to economy:
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Garment export shares
to total Vietnam export
is 14-16% and
Footwear is 9-10%
Da giày
(2004-2006)
D?t may
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But... 60 –70% labor
come from rural areas
and agricultural
sectors. Migrants
growth at about 2550% over 3-5 years
now
The impacts are negative…
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Low investment on
working conditions and
long working hours have
NEGATIVE impacts to
WORKERS’ HEALTH and
PRODUCTIVITY
Low wages and bonus
and uncompliance with
Labor Code created labor
disputes and strikes which
have NEGATIVE impact
on PRODUCTION and
LABOR FORCES
More jobs offered but
Unstable
Why growth not sustainable?
Labor with low educational
level,
migrated and unstable
Severe competitive on
production technology
and labor skills levels
High risk of lost jobs (for workers)
and lost labors (for employers)
Free Trade creates shocks to
migrant female workers
WHERE WILL THE
MIGRANT
WORKERS GO?
“ Return home and back
to agricultural work”...
many choose
“ Not stay long at
jobs”...many say...
“ Unemployment and fall
back to poverty”...
many fear
Especially to those in footwear sector
CSOs - The key issues
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How do CSOs act as linking partners in
facilitating trade policy towards social
equity and poverty reduction?
How to balance between socio-economic
returns for and social benefits for
employees ?
How to involve stakeholders to work with
common understanding and continuous
trust?
CSOs role – Emerging participation
in economic society
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Growing CSOs: Unions, 17
Associations on sports, 70
Associations on economic fields, 30
associations on philanthropy, 28 on
foreign business and trades
Improved relationships between
state and civil society but State plays
key role in policy making with control
over civil society (CIVICUS report)
CSOs holding private corporations
accountable
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CSOs force corporates with better
corporate governance: Labor standards
and conditions, environment, code of
conduct etc. to be competitive
CSOs are limited at pushing for social
concerns including social impacts on trade
towards corporate performance
• … Concerning Social Policies but limited on
Trade Policies
CSOs’ expected engagement in
trade policies
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Trade promotion
Trade information provision
Electronic commerce
Facilitate international trade treaties
Trade and Finance policies
Private sector-civil society relations
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Trade Unions is the most important
CSO
But existing 200 business
associations operating on trade
policies and trade promotion
Attitude from private and state
companies towards CSO actors are
different with foreign invested ones
CSOs holding the State
accountable
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Mass organizations (5 socio-political,
umbrella ones) remain closer and more
direct access to the government and
State-Party, especially more opening
space at local government.
Possible ways for dialogues (eg. Donorgovernment-NGO meetings)
CSOs raise questions in the National
Assembly
CSOs conduct policy advocacy
….But impact is fairly limited
The Effective Alliance Advocacy
strategy
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CSOs to network and collaborate with academics
to do stronger research-based advocacy,
CSOs to support Corporates to talk with policy
makers through effective dialogues
CSOs Engaging corporates into shared agenda
Trade Development and corporate governance
CSOS helps to improve public awareness of Trade
in Development to implement through media and
effective communication channel
Some strategic policy
recommendations
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Government holds responsibility to ensure pro-poor
trade promotion and integration policies and mitigate
social impacts
Government should improve with strong Rule of Law
and legal framework (Amended Labor Code, United
Law of Enterprise, Tax Law, Law on Association)
Improve tripartite dialogues: government- private
sector and civil society
Government to strengthen market institutions and
business development environment to facilitate
private sector in economic integration
Government to create wider room for civil societyprofessional associations in trade policy making
CSOs to use increased role of media in trade policies
and policy making
Thank you!
For more information about
CDI and Corporate Forum in
Vietnam see:
www.vietnamforumcsr.net