Economic integration for low income earners means getting them involved in domestic and international markets. The Thoi bao Kinh te Viet Nam (Vietnam Economic Times) consulted the experts in this field.

Pham Thi Thu Hang, Director of the Institute for Enterprises Development

The percentage of poor households found in the country has been slashed from 58.1 per cent in 1993 to 19.5 per cent in 2004. However, the criteria for classifying the poor has had a tendency to change. Since the year 2005, the poor threshold has been raised to VND150,000 from VND100,000 for people living in the rural and mountainous areas, and VND260,000 from VND150,000 for people living in urban environments. In my opinion, these benchmarks are a tad high, being almost equal to the global criteria of US$2 per day.

By using the new Government mandated criteria, the percentage of poor households nationwide will climb up to around four million, which accounts for 26 per cent of all households in the country. If the old criteria was used the percentage of poor households found within the nation would hover around 7.3 per cent, or about 1.2 million households.

The Government’s poor criteria is much lower than that set for "low income earners" in the base-of-the-pyramid model.

If we compare between the consumer-spending ratio of 20 per cent of the country’s poorest and 20 per cent of the country’s richest, it is apparent that there has been little increase in the inequality among the two groups in the last few years.

According to a World Bank 2002 report, total spending on consumer goods by 20 per cent of the country’s richest people was 6.03 times greater than that of poorest. But two years later, the ratio had only increased to 6.27 times.

A major problem for the poor is that they are often placed in a disadvantaged position as goods suppliers or service providers, because their production scales are small and they lack solid infrastructure.

This implies that they don’t have the capacity to compete in terms of the products’ prices and services offered by the better off suppliers.

The only way for small- and medium-sized companies to compete with the big firms is to co-operate with each other to increase production efficiency and improve their products’ quality. If this were to occur, the market for the low income earners will be brighter.

Nguyen Xuan Nam, manager of the IT Institute for Businesses, Chamber of Commerce and Industry (VCCI)

According to statistics from the VCCI, Viet Nam now has about two million family businesses. However, the number of families that have applied IT in their management is just 1-3 per cent. This is obviously a rich potential market for investors. Generally, software companies have been focusing on company clients, not family businesses. Seizing this opportunity, the VCCI has decided to co-operate with Intel, Microsoft and the Viet Nam Post and Telecommunications Group (VNPT) to develop an IT support programme for family businesses.

In 2006, Intel will provide the computers, VCCI will provide the management software, Microsoft will lend support with the copyright of the software and VNPT will provide the Internet transmission line.

The software designed by the VCCI is on accounting under the brand name ACsoftHome.

We plan to launch the programme in late December 2006 with the project lasting 4-5 years.

Pham Thi Ha, officer from the Viet Nam Women’s Union

After 15 years, the credit savings scheme launched by the Viet Nam Women’s Union has spread to all 64 cities and provinces nation-wide.

There are more than 200,000 credit groups that have been set up in the country. By 2006, the women’s union chapters throughout the country would have managed nearly VND10,000 billion ($623 million).

The Women’s Union has also helped more than three million women access the scheme with capital trusted to the Union from the Bank for Social Policy, the Bank for Agriculture (AgriBank), international organisations and non-governmental organisations.

The credit scheme has been operated with very low interest rates or none at all.

A key objective of the initiative is to enable women to expand upon production. Most of the loans are generally short term, and range from 6-12 months, with the interest rate lower than that of the AgriBank (less than 1 per cent per annum).

The women’s union plans to mobilise more money in the future from different sources to lend to women to help them open new businesses.

Luu Minh Ngoc, Executive Director of Ecolink company

Many companies are seeing the need to expand their market for the general population, particularly the poor people.

Multi-national companies among others have expressed their desire to buy products from the poor, localise their commercial franchises and strengthen the capacity for the poor.

Being aware of this tendency, my Ecolink company has adopted a policy to support the BOP objectives, including those on poverty reduction and sustainable development.

Our main business line is agricultural processing, ranging from crop cultivation to distribution of products, particularly for those produced by farmers who live in mountainous and remote areas.