Do you know that in Vietnam women entrepreneurial skills are demonstrated in the process of privatization but at the same time women workers being exploited to maintain profit margins in the private sector?
Over the last few decades Vietnam is known to have made remarkable progress in human development also reducing gender disparities such as education, access to health care, and some aspects of employment. Vietnam also has one of the highest economic participation rates in the world and about 83 percent of women between the ages of 15 and 60 are in the labour force with an overall literacy rate of 95 percent. The strong legal and policy framework has been the key factor towards creating a balance and reducing gender gaps. Vietnamese women enjoy constitutional rights, including affirmative policies for political participation, property rights, maternity benefits, and the right to make reproductive decisions (Asian Development Bank, 2005, Vietnam Gender Situation Analysis, Hanoi)
Female entrepreneurship is not new to Vietnam and during the colonial times women were “according to a four-tiered system of economic activities i.e. scholarship, farming, crafts, and trade, women were mainly involved in the activities of the three lower tiers”. It is said that their engagement in trading and off-farm activities was not only income generating but also a strategy to support men who were engaged in academic excellence or government administration. Therefore, one can say that entrepreneurial capability has been an important feature of Vietnamese women. The change that has occurred in this line during the reform period in Vitenam from a two-tier centrally planned economy provides useful insight.
In the context of Vietnam’s accession into the global market the promotion of women’s entrepreneurship could be analysed from two angles - gender equality and economic efficiency. Equality argument draws legitimacy as constitutional right and efficacy argument is an extension to this. It is argued that removal of gender-based barriers and greater investment in women could directly unleash women’s untapped potentials, increase productivity and income. Indirectly, an increase in productivity and household income could generate more demands for goods and services and create more employment (Vitenam Women’s Union, 2000, Defining Action Programs for VWU to implement the strategies to promote women's participation in micro enterprise development in Indochina).
Under Doi-Moi – economic reforms were initiated by Vietnam in 1986 and the Communist Party of Vietnam allowed free market enterprises without state intervention. During the initial phase, the peasants were allowed to directly invest and produced on state-owned land, leased to individual peasant households thereby turning individual farms into a form of private enterprise. The second phase was marked by reforms of state-owned enterprises which resulted in restructuring promoting competitiveness of state owned enterprises for export-oriented activities. On the other hand assisting retrenched workers to set up their own micro-enterprises through credit and training activities and this led to the emergence of the urban based private sector. The third phase saw a simplified system of registration of private firms to reduce government control and to ease entry barriers for Small and Medium Enterprises (SMEs). The Micro and Small Enterprises (MSEs) once considered a tool for employment and income generation have emerged as dynamic entities but due to state neglect they have failed to move up higher. It was felt that a more careful planning and policy was the need for the MSEs beyond the legal measures to bring about a sustained growth. Distortions were visible in the structure of ownership, its composition of GDP and human resources. Gender imbalance pervades all this.
Since 1996, the domestic non-stats sector has played an important role in terms of its contribution to GDP and employment generation. The National Centre for Social Sciences and Humanities, Vietnam, points out a major weakness in the private sector which is the absence of diversification as 78 per cent of enterprises are concentrated in four industries food processing, wood products, garments, ceramics and glass. Again, the contribution of households and mixed firms is on decline and the predominance of MSEs in the private sector indicates an imbalance from the standpoint of capital, technology and labour as well. Low technology and labour-intensive activities are widespread while high technology capital-intensive activities are concentrated in less than half a percent of the total number of firms.
Industry data analysis suggests that firms in the state sector are the largest, when measured according to number of employees as compared to the collective sector, domestic private sector and FDI sector. However, when measured according to fixed assets, FDI-firms dominate, and firms in the collective sector and domestic private are at the lowest extreme. This indicates that the capital-labour ratio is highest in the FDI sector. In other words, activities in the domestic private sector feature sweatshop activities. Further, when measured according to capital efficiency, as indicated by the fixed asset- value added ratio; capital-intensive firms show the highest ratio and State Owned Enterprises the lowest. This suggests that the later type of firm is more efficient in term of capital use per unit of value added than FDI and domestic private firms are.
Gender inequality is the cost for the successful performance of the private sector. On average, in 1999 female labour constituted 55.1 per cent of total industrial labour whereas their costs was only 45.2 per cent of total and the total contribution made by firms for the social security of female labour was only 29.7 per cent of total. In the manufacturing sector, female labour constituted 58.3 per cent of the workforce while its costs were nearly equal to male labour. Wages and social security benefits enjoyed by female workers in the manufacturing sector were higher than the average in the industrial sector, but significantly lower than what was enjoyed by men.
If we look into the household sector in Vietnam we find that it is characterized by labour intensive process and low-productivity. Household enterprises in manufacture are vulnerable to open market conditions and require special support to adapt to new conditions. Again, relevant studies suggest that women may be indeed more knowledgeable about enterprise operation through practice, yet they may encounter intra-household barriers on representation which disqualify them for support. Specific data from VWU (1998) on women owned enterprises corroborate this. It is indicated that women own 16 per cent of the total number of private enterprises that have received permit to operate under Enterprise Law, showing a high degree of success in overcoming gender-specific constraints. In reality this percentage could be higher if we take into account household enterprises that are owned by women but are not registered, or enterprises run by women but registered as jointly-owned or owned by men. Trade accounts for almost half of total activities of women-owned enterprises, mainly in retail. Manufacturing and services account for the other half. Service activities are limited to restaurants and recreation. A survey of 600 women-owned enterprises conducted by VWU in three cities reveals interesting results. Majority of the enterprises surveyed employ upto 30 people and the study showed that companies with limited liability and joint venture companies borrow over above 85 per cent of their capital, collectively owned companies borrow over 56 percent, household enterprises and private companies borrow 37.7 and 34.8 per cent respectively. It is to be noted that financial institutions are yet to develop a vision on women’s entrepreneurial capacity and respond to the needs. The survey finds that women engaged in the MSEs work for long hours which leaves little time for additional training, take less risks in business and have respect for laws that cater to childbirth and maternity leave.
Thus, on one hand we have the situation of women workers being exploited to maintain profit margins in the private sector and on the other, their entrepreneurial skill are demonstrated in the process of privatization. VWU puts forward certain conditions towards promoting women entrepreneurship in Vietnam. First, conflict within the household should be addressed and gender co-operation at this level sought. Promotion of gender equal labour standards at the enterprise level is the second need. Women private entrepreneurs who have capacity may require support to improve efficiency and so the need for adequate and tailored financial support. Finely, it is important to include policies for promoting women entrepreneur’s as a broader strategy at the level of regional development and export promotion.
We may conclude that when Doi-Moi has brought more employment opportunities for women in Vietnam it is important to diversify given the work experience and potentials for skill enhancement. Gender bias practices at the work place will undermine this potential and will result in loss for the society as a whole.
Compiled from: Thanh-Dam Truong, 2002: Gender and Enterprise Development in Vietnam under Doi-Moi: Issues for Policy, Research and Training, Institute of Social Studies, Working Paper 363 and
The World Bank , 2006: Vietnam, Country Gender Assesment
Thanh-Dam Truong, 2002: Gender and Enterprise Development in Vietnam under Doi-Moi: Issues for Policy, Research and Training
