Collective Economy Boosts Craft Village Development

To develop traditional craft villages, enterprises and cooperatives play an important role in addition to the support from local authorities.

Dao Xa village has been well-known for producing traditional musical instruments for centuries

Hanoi  currently has 806 craft villages that generate stably-paid jobs for millions of workers. Their combined revenue is about VND22-25 trillion (US$1 billion) annually. In the market economy, companies and craft villages have an interactive relationship that motivates each other’s development. The former generates jobs and incomes for workers and plays an important role in building brands for craft villages and developing key distinctive products for each craft village. The latter, characterized by long-standing cultural values, is a solid foundation and a springboard for the former to be innovative and growing.

Cooperatives have worked effectively and actively in craft villages in Hanoi. For example, Phu Nghia Rattan Production Cooperative (Chuong My district) and Hong Ky Rattan Bamboo Cooperative (Phu Xuyen district) export many bamboo and rattan products to Europe and Asia every year. Cooperatives have expanded their markets and built their product brands, helping the city achieve the goal of hunger eradication and poverty reduction.

Mr. Le Ba Chung, Director of Kieu Ky Gilding Industry Cooperative, said that his cooperative worked with the Hanoi Department of Industry and Trade and Gia Lam Industrial Promotion Center to provide vocational training for young villagers and surrounding people to grasp market opportunities and develop craft villages. Trainees are employed after the training course. As a result, they feel secure and passionate about pursuing their career. From the risk of losing a traditional career, the craft village now has nearly 1,000 workers, with an average monthly income of VND5-10 million each.

Ms. Nguyen Thi Hoi, Director of Ha Thai Lacquer Cooperative (Duyen Thai commune, Thuong Tin district), said that Ha Thai traditional lacquer village has existed for more than 200 years. The village now has a well-established position in the market with many products that are popular with domestic and international tourists. Its products are trusted for prestige, quality, beauty and durability, crystallized by the skillful hands and creative minds of talented craftsmen.

To work more effectively, bring more benefits to employees and contribute to local socio-economic development, cooperatives need to focus on carrying out solutions to upgrade product value chains and develop human resources to meet new development requirements. They need to improve market accessibility to inputs for product value chains, expand markets and build brands for cooperatives.

 Ms. Vu Thu Ha, Vice Chairwoman of Hanoi People’s Committee, stated that Hanoi’s traditional craft villages have actively contributed to rural economic restructuring, job creation and income growth for local laborers. They have also helped create a premise for successful hunger eradication and poverty reduction in the city. New models of cooperatives that link commercial production with craft village development are increasingly developing. Many cooperatives have paid attention to cooperation by enhancing experience exchanges in management, operation, trade promotion, attendance to exhibitions and conferences and participation in business clubs. They also work to expand their markets and cooperate in product consumption to diversify products supplied to the market. At the same time, they have created jobs and stable incomes for members and gradually improved living standards for people and employees.

However, the main business form in craft villages is household (accounting for more than 80%). Very few households have transformed into cooperatives and small and medium-sized enterprises (SMEs). Working as business households will restrict production development because, besides their small scale, they do not have legal status by law. Thus, they cannot sign large contracts, adopt cutting-edge technologies or work out business strategies or direct sectoral development. Therefore, in the context of economic integration and government-incentivized private business development, Hanoi is encouraging the transformation of business households into cooperatives to better adapt to the market and address environmental pollution problems.

Minh Ngoc, Vietnam Business Forum