Working perfunctorily

According to the latest statistics from 38 provinces and cities, nine craft villages have gone bankrupt, 124 others are working perfunctorily, accounting for around 10% of the total number of craft villages.

The fall of craft villages has plunged at least 2,166 family-scale businesses into bankruptcy and partly hit 468 others.

In the northern province of Bac Ninh, which has the largest number of craft villages, the situation is very severe, especially in fine-art, iron and paper producing villages.

At the Dong Ky fine-art wood village, family-scale businesses owe $20 million. In Phong Khe paper village, 50% of the 500 family businesses have stopped production or are running perfunctorily.

According to the Bac Ninh Department of Industry and Trade, tens of thousands of workers in the three above craft villages have lost their jobs. This difficult situation is expected to last until the end of 2009.

Dong Ky craftsmen haven’t been able to sign any new export contracts recently. Most of their products are exported to China and the US but these markets seem to have closed their doors at the moment.

Dong Ky craft village provides jobs for around 12,000 rural labourers, earning VND270-300 billion a year, equivalent to the state revenue of a mountainous province in the northwestern region of Vietnam. The village has nearly 200 private firms and thousands of family-scale businesses. Up to 70% of its output is exported to China.

The Vice Chairman of the Dong Quang Commune People’s Committee, Dong Ky district, Phan Dinh Luong, said so far this year, Dong Ky village has not exported one container of wood products because of the global financial crisis.

Up to 80% of companies in Dong Ky have stopped production or are working with few workers. Some companies have cut down their workforces from 100 to 7-8 workers.

Unmarketable craft villages

Van Phuc is very famous at home and abroad for its silk. Before 2007, Van Phuc had around 600 silk weaving families, yielding between 2.5.2.7 million metres of silk a year. The output fell to 1.3-1.5 million metres of silk last year.

The Chairman of the Van Phuc Silk Village Association, Nguyen Huu Chinh, said that because of outlet-related difficulties, Van Phuc’s businesses are operating at a loss. Chinh said previously, the village had to hire around 400 workers from neighbouring areas. Currently, even local laborers are unemployed. Around 200 businesses have had to temporarily close and 400 others are working perfunctorily.

“In 2007, I had six weaving machines operating and hired 4-5 workers to produce 40m of silk a day. Since mid 2008, I have had to reduce my output. Only I and my wife weave silk now,” said Hoa, the owner of Thanh Hoa silk shop in Van Phuc Village.

Hoa said banks are willing to provide loans but he is afraid to borrow capital because the prices for input materials have grown by 30-40% compared to 2007 while the prices for outputs are dependent on the market. In addition, bank loans are short-term so it is difficult for them to utilise the capital.

Hanoi currently has 1,180 craft villages which create jobs for thousands of rural workers. As craft villages have fallen on hard times, the lives of thousands of rural labourers are being threatened.

Source: VietNamNet/ANTD