Reinventing CSOs -policy makers - private sector relations in economic integration in Vietnam The Country Views

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Reinventing CSOs -policy makers - private sector
relations in economic integration in Vietnam The
Country Views

• By Ngo Huong
• Vice-Director, Center for Development and
  Integration
• www.cdivietnam.org
• Presentation at the AfT Conference for CSOs
• Narobi, 15-16 March 2007

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Outlines

• Free Trade and Economic integration vs. national
  trade policy and policy making mechanism
• Trade Policies challenges, obstacles
• Case on Footwear and Leather Sector
• CSOs and Policy makers
• CSOs and Private sector
• The recommended strategies for effective alliance
  in advocating trade policies

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Vietnam after being full member of WTO

• TO be compliance with international standards
  through effective legal system, good political
  economic system, a rule of law state
• Vietnam to be accountable, transparent,
  non-discriminated in trade
• To Remain healthy competition and open for market
  economy mechanism through enabling full
  participation of stakeholders and society
• To cope with possible social impacts
• To remain the open investment environment
  foreign investment with equal treatment incl.
  finance, banking market, telecommunication etc.
• Trade Forums (APEC 2006, ASEM 5, ASEAN) open for
  trade cooperation and promotion through
  structural reforms legal infrastructure,
  financial markets, corporate governance etc.

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Balancing economic growth and social equity

• Economic integration opens for more market,
  increase competitiveness and competitive
  advantages for Vietnams industries
• Private sector grow faster under the support of
  the Government, Associations
• However, social issues emerge like rapid labor
  mobility from rural to urban, workers lack of
  knowledge, skills poor living and working
  conditions. etc.

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Key challenges and constraints for Trade policies

• The external challenges pressure from buyers
  competitive capability in price and quality
  standards
• The internal constraints weak management and low
  competitiveness low level of labor skills,
  unstable labor forces
• Political obstacle limited democracy and voice
  for trade policy
• Institutional gaps in undertaking trade policies
  and policy making weak public administration and
  facilities for business environment
• The weak CSOs (only Bill on Association)
  limited CSOs role in claiming the rights of
  consumers

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Example Footwear and Garment-Textile

• After joining WTO, Vietnam with increased exports
  to USA, EU and other markets But the most
  benefits go to foreign invested companies or
  joint ventures
• (Garment sector accounts for 15-17 total export
  value, footwear 11-13 (2002-2004)
• Sector with Private owned dominate only 20
  state-owned, 34-40 foreign invested, that
  challenges the welfare mechanism and social
  benefits to employees
• Vietnam WTO accession force the sectors to be
  more competitive in price and quality and with
  international rules
• Intensive labor but mostly from rural areas hence
  with low quality of labor skills, unstable and
  high turnover rate and difficulties in living
  conditions
• The recent Anti-dumping initiated by EC force
  Vietnam and private sector to find ways to be
  more competitive and Government to review the
  trade policies and have policies to protect
  workers at job risks..

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The workers perspectives claiming private
sector

• Corporates need to be responsible for their
  employees by improving working conditions and
  labor relationship because the negative possible
  impact of long working hours, low wage, lack of
  training and information laid on spirit, health,
  rights and hence creating unstable labor and low
  productivity will challenge the sustainable
  economic integration.
• Source Research on migrant workers (Trade
  Unions, 2003-2004, CDI-2005)

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Impact of growth to poverty reductionGarment and
footwear sector

• These two sectors contribute to economy
• Garment export shares to total Vietnam export is
  14-16 and Footwear is 9-10 (2004-2006)
• But... 60 70 labor come from rural areas and
  agricultural sectors. Migrants growth at about
  25-50 over 3-5 years now

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The impacts are negative

• Low investment on working conditions and long
  working hours have NEGATIVE impacts to WORKERS
  HEALTH and PRODUCTIVITY
• Low wages and bonus and uncompliance with Labor
  Code created labor disputes and strikes which
  have NEGATIVE impact on PRODUCTION and LABOR
  FORCES
• More jobs offered but Unstable

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Why growth not sustainable?
Labor with low educational level, migrated and
unstable
Severe competitive on production technology
and labor skills levels
High risk of lost jobs (for workers) and lost
labors (for employers)
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Free Trade creates shocks to migrant female
workers

• WHERE WILL THE MIGRANT
• WORKERS GO?
• Return home and back to agricultural work...
  many choose
• Not stay long at jobs...many say...
• Unemployment and fall back to poverty... many
  fear

Especially to those in footwear sector
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CSOs - The key issues

• How do CSOs act as linking partners in
  facilitating trade policy towards social equity
  and poverty reduction?
• How to balance between socio-economic returns for
  and social benefits for employees ?
• How to involve stakeholders to work with common
  understanding and continuous trust?

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CSOs role Emerging participation in economic
society

• Growing CSOs Unions, 17 Associations on sports,
  70 Associations on economic fields, 30
  associations on philanthropy, 28 on foreign
  business and trades
• Improved relationships between state and civil
  society but State plays key role in policy making
  with control over civil society (CIVICUS report)

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CSOs holding private corporations accountable

• CSOs force corporates with better corporate
  governance Labor standards and conditions,
  environment, code of conduct etc. to be
  competitive
• CSOs are limited at pushing for social concerns
  including social impacts on trade towards
  corporate performance
• Concerning Social Policies but limited on Trade
  Policies

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CSOs expected engagement in trade policies

• Trade promotion
• Trade information provision
• Electronic commerce
• Facilitate international trade treaties
• Trade and Finance policies

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Private sector-civil society relations

• Trade Unions is the most important CSO
• But existing 200 business associations operating
  on trade policies and trade promotion
• Attitude from private and state companies towards
  CSO actors are different with foreign invested
  ones

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CSOs holding the State accountable

• Mass organizations (5 socio-political, umbrella
  ones) remain closer and more direct access to the
  government and State-Party, especially more
  opening space at local government.
• Possible ways for dialogues (eg.
  Donor-government-NGO meetings)
• CSOs raise questions in the National Assembly
• CSOs conduct policy advocacy
• .But impact is fairly limited

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The Effective Alliance Advocacy strategy

• CSOs to network and collaborate with academics to
  do stronger research-based advocacy,
• CSOs to support Corporates to talk with policy
  makers through effective dialogues
• CSOs Engaging corporates into shared agenda Trade
  Development and corporate governance
• CSOS helps to improve public awareness of Trade
  in Development to implement through media and
  effective communication channel

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Some strategic policy recommendations

• Government holds responsibility to ensure
  pro-poor trade promotion and integration policies
  and mitigate social impacts
• Government should improve with strong Rule of Law
  and legal framework (Amended Labor Code, United
  Law of Enterprise, Tax Law, Law on Association)
• Improve tripartite dialogues government- private
  sector and civil society
• Government to strengthen market institutions and
  business development environment to facilitate
  private sector in economic integration
• Government to create wider room for civil
  society-professional associations in trade policy
  making
• CSOs to use increased role of media in trade
  policies and policy making

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Thank you!

• For more information about CDI and Corporate
  Forum in Vietnam see
• www.vietnamforumcsr.net