[general_devel] [M4P2 Newsletter] Making Markets Work Better for the Poor II - November 2010

Tue Nov 23 12:31:10 GMT 2010

November 2010 

M4P2 Newsletter 

Second Round Launch of the Policy Action Research Fund: Call for Proposals 

The Policy Action Research Unit will hold the 2nd round launch event to introduce its 2nd Call for Proposals. The launch event will be held at the Victory Hotel, 14 Vo Van Tan Street, District 3, Ho Chi Minh City in the morning of 24th November 2010 , commencing at 8.00am. 

The policy action research component of M4P2 will fund research, on a competitive bidding basis, that is intended to lead to the adoption of market-oriented and pro-poor policy change in Vietnam. Grants will be awarded to research institutes and credible stakeholder groupings to support relevant research in three key thematic areas: i) value chain development; ii) public – private partnership in infrastructure services; and iii) labour markets. 

In the first round, the policy action research component is already implementing 4 research studies in the areas of agricultural contracting and improving the technical vocational education and training system. The second round will focus activities on improving informal sector training / the apprenticeship system and testing approaches to improve public private partnership in rural road maintenance. 

Click here to get the Terms of Reference for 

Labor market: Improving Informal Sector Training/Apprenticeship System: English | Vietnamese 

Public Private Partnership (PPP): Breakthrough in Rural Road Maintenance: English | Vietnamese 

Click here for application forms and more information about the application process. Deadline for submission is 5 January 2011 . 

Understanding the Role of Traders in the Bamboo Value Chain 

A team from the Policy Action Research component in association with GRET, a PARU grantee undertaking a research into agricultural contracting undertook a joint mission to Thanh Hoa province between 12 – 14th October 2010 . 

There are many types of bamboo growing in Thanh Hoa, each with its own characteristics and uses. However, by far the most common varieties of bamboo are Luong and Nua. These are estimated to collectively account for more than 90% of all the bamboo cultivated or grown naturally in the province. Cultivation is disaggregated among thousands of producers, many of whom are poor, belong to ethnic groups, and live in remote mountainous communities. Luong bamboo (Dendrocalamus barbatus essentially) represents the main income source for about 30,000 families in the zone and a potential for many to escape poverty. 

The local-level bamboo trading system in Thanh Hoa is totally dependent on trust-based exchange relationships between individual producers and local traders / collectors. Trading relationships based upon long-term credit agreements are the building blocks of a system that relies on dense social networks, a common perception of the market, and a set of informal rules to which traders and producers voluntarily adhere. 

During the visit the existence of a credit relationship was mentioned by the few farmers visited as the main factor behind the selection of trading partners / collectors. Closely related to credit is the second most relevant point: the timeliness of the payment system offered by local traders. Since credit provided by traders to producers takes the form of anticipated payments on future bamboo sales, the two points are deeply interconnected. Thus anecdotal evidence suggests that credit emerges therefore as the main binding element in the resilient relationship between traders / collectors and producers. 

Discussions with farmers suggest that the willingness to buy bamboo of different quality appears to be relatively irrelevant in the choice of trading partners. Furthermore, personal relationships (the existence of a long-term trading agreement and family relationships between traders and producers) are the less important elements in the choice of trading partners / collectors. 

Evidence gathered during the field trip highlights that individual trading patterns have not been significantly altered in the past 3 years. Notwithstanding their membership in the cooperatives or groups, producers still prefer to sell unsorted bamboo culms to a limited number of traders (on average between one and two). This perceived rigidity of the bamboo trading network was confirmed by the few local traders / collectors that the team visited, who mostly appear to depend upon a fixed pool of bamboo suppliers. Local traders are unwilling or unable to cross other traders’ network boundaries in order to establish new supply relationship with producers outside their pool. Traders seem therefore to have already reached the limits of their supply capacity, and are unable to further increase the scale of their operations. 

The linkage between trading and credit is mainly motivated by risk-sharing considerations; it can be modelled as a quasi-credit system aimed at providing informal insurance against market fluctuations to both traders and households. From the point of view of traders, the main market risk is linked to the need of securing a reliable supply of bamboo culms in a situation of increasing demand and locked supply. 

The research being undertaken will aim to provide deeper understanding of these issues and examining the possibility, if appropriate, of introducing contracting as a means to overcome some of these constraints. The next stage of the research is likely to involve much deeper analysis of the constraints and issues and then the development of a pilot activity aimed and enhancing learning about the adoption of agricultural contracting within this setting. 

Research to Better Understand the Factors Determining Improvements in the Technical Vocational Education and Training System (TVET) 

The Central Institute of Economic Management (CIEM), one of four grantees undertaking the first round of research under the Policy Action Research Component, undertook a series of field trips in September 2010 to examining the functioning of the technical vocational education and training system (TVET) in two provinces: Thai Nguyen and Vinh Phuc. 

Labour is usually the main (and sometimes only) asset of the poor. Therefore, when an attractive market can be established for labour, it represents one of the most accessible paths out of poverty. 
Finding productive employment for the workforce is one of the most important socio-economic challenges currently facing Vietnam. However, the labour market in Vietnam is highly segmented, the TVET system remains inadequate, and does not meet the demands of employers or the poor. As a result, the poor lack the necessary skills to participate in secure and better paid jobs. Hence, CIEM’s policy action study is examining approaches to strengthen the TVET system, so as to meet the needs of the private sector, and to provide proper skills for workers, especially for the poor, to escape poverty. 

The CIEM team undertook interviews with a number of stakeholders involved in supporting technical and vocational training in Thai Nguyen and Vinh Phuc, including government departments, private sector companies, training providers and TVET training institutions. The preliminary results found two different pictures in the two provinces. In Thai Nguyen, initial research suggests that there are only a few links have been established between companies and TVET institutions, so as to try and ensure that skills training matches the needs and requirements of companies. 

The State-funded TVET institutions interviewed in Thai Nguyen appear to be more supply-driven than demand-driven, producing training programmes that are typically out-of-date. Thus, in most instances, firms resort to internal training of their own staff. In those instances where there were links between firms and the TVET system to develop targeted training programmes, these links were generally weak, and led to minimal recruitment by firms for staff trained by the relevant TVET institutions. 

In Vinh Phuc, the industrialisation process is more pronounced and there is generally a greater density of manufacturing enterprises. The province is looking at adopting new decrees and resolutions to improve the functioning of the TVET system. Furthermore, the Peoples Committee of Vinh Phuc is developing an innovative approach to dealing with the issues raised, when farm land is acquired for the establishment of new businesses in the province. It has requested relevant firms to provide jobs to farmers made landless in cases where such land is acquired by these firms. 

Hence, a tripartite form of vocational training has been established, with the involvement of TVET institutes / centres, private businesses and the land-less farmers. Despite this, the educational programmes developed by the TVET system still tend to be more supply driven, rather than meeting the requirements and needs of the new businesses. 

The preliminary research shows that more needs to be done to understand the needs of the private sector, and to make the system work in terms of developing coherent curricula that the private sector values, along with a certification process that all stakeholders will recognise and appreciate. The CIEM team will be looking at new and innovative ways to address this situation in the next seven months, and try to develop and demonstrate an alternative system that could be replicated elsewhere, and thereby have a positive impact on government thinking and policy with regard to technical vocational education and training. 

News and Events 
• Second Round Launch of the Policy Action Research Fund: Call for Proposals 
• Understanding the Role of Traders in the Bamboo Value Chain 

• Research to Better Understand the Factors Determining Improvements in the Technical Vocational Education and Training System (TVET) 
Markets4Poor II 
• Viet Nam Challenge Fund (VCF) 
• Policy Action Research Unit (PARU) 
• About M4P2 
Donors & Implementers 
• MPI 
• ADB 
• DFID 
• Nathan EME 

Making Markets Work Better for the Poor II, 
Room 706, Vuon Dao Building, Phu Thuong, Tay Ho, Hanoi, Vietnam 
Tel: 84-4-2 223 9261 /2 Fax: 84-4-2 223 9261 Email: info at markets4poor.org 

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