Rural industry growth targeted

A national industry promotion programme implemented from now until 2012 will focus on boosting rural industries by facilitating focus on specific strengths of localities nation-wide.

The Agency for Industry Promotion (AIP), which says the programme has been approved by the Prime Minister, will encourage the development of industries, including the handicraft industry, in line with the Government’s socio-economic development plans, the national industry development plan as well as the development plan of each locality.

It will help localities fully tap their comparative advantages as well as available resources, including natural resources, market potential and human resources, to build industries that can create quality products with a high degree of competitiveness.

The programme aims to develop rural industry quickly but sustainably, creating more jobs and improving incomes of rural workers while protecting the natural environment.

It will set the base for the establishment of more new rural areas, it says.

Investment injection

The programme, which will be carried out at an estimated cost of around VND400 billion (US$25 million), will pour investment into industrial production and industrial promotion services in rural areas.

To ensure the programme’s efficiency, the AIP has proposed that the Prime Minister issues a directive asking local authorities to actively implement policies and regulations relating to the development of rural industries, considering it an important way to achieve the industrialisation and modernisation of agriculture and rural areas.

These efforts will bring the growth of industrial development in rural areas closer to that of the country as a whole, the AIP says.

While the development of rural industries picked up significantly after the Enterprises Law was established in 2005, their growth has been hampered by several factors, the AIP says.

The biggest problem is their legal capital is modest and the capital they can mobilise from outside sources is also limited. More often than not, they are unable to access bank loans because they do not have an adequate asset base as collateral.

Rural industrial establishments are also marked by their poor ability to penetrate markets at home and abroad as well as a lack of information on input markets including capital, labour and raw materials. This limits their ability to produce high quality products at low cost.

Another major problem that has prevented rural industry from achieving the expected growth over the last few years is that related policies and regulations are not stable and transparent, and also suffer from overlaps, the AIP says. — VNS

Tags: Vietnam industries, Vietnam industry