Sustainable rural development in vietnam experience from japan “one village one product” (OVOP) and thailand “one tampon one pro

Policies and Sustainable Economic Development | 1Sustainable Rural Development in Vietnam: Experience from Japan “One Village One Product” OVOP and Thailand “One Tampon One Product” OTOP

Policies and Sustainable Economic Development | 1

Sustainable Rural Development in Vietnam: Experience from Japan “One Village One

Product” (OVOP) and Thailand “One

Tampon One Product” (OTOP)

NGUYEN HOANG ANHVietnam National University – HCMC, University of Economics and Law

be emphasized, along with the support of exogenous factors.

Keywords: One Village One Product; One Tampon One Product; One Village One Craft; sustainable rural development; endogenous development

198 | Policies and Sustainable Economic Development

1 Introduction

According to the World Bank (1975), rural development is defined as “astrategy aiming at the improvement of economic and social livingconditions, focusing on a specific group of poor people in a rural area Itassists the poorest group among the people living in rural areas tobenefit from development” Rural development is a vital element forpoverty alleviation Around three-quarters of the world’s impoverishedlive in rural regions Many poor people in cities are migrant workers andfarmers who left rural areas Therefore, if living standards and incomegenerations in rural areas are improved and rural immigrants to citiescome back to rural areas, excessive population inflowing to cities will bediminished, causing poverty in both cities and rural areas to decline.Besides, development of rural areas can be a shelter when there is alack of job offers in cities because of depressed economic conditions.Although Asian countries are exposed to the forceful policy hasteningindustrialization, the policies have revealed many flaws simultaneously,such as the income gap between urban and rural, depopulation problem,congestion of big cities, and environment issues, and others According toBrockerhoff (2000) of the world’s population, 48% lived in urban areas in

2003, but this is expected to increase to 61% by 2030, which means thatthose problems in an increasingly urbanized world will become muchmore severe Among this context, the success of Japan “One Village OneProduct” (OVOP) movement in preventing economic deterioration anddepopulation of local communities has drawn attentions from manygovernments in developing countries such as Thailand, Indonesia, andVietnam However, not every adapted OVOP program outside Japan issuccessful as expected The difference between Japan original OVOPmovement and other adapted OVOP versions has raised questions aboutpolicy approach in rural development such as endogenous or exogenousgrowth and ‘bottom-up’ or ‘top-down’ approach This study aims toinvestigate those different approaches in region development policythrough comparative analysis of Japan OVOP movement and its adaptedprogram in which Thailand ‘One Tampon One Product’ (OTOP) movement is

significantly influential.This qualitative paper utilizes documentary research to identifyimportant factors which have impact on the success of sustainable ruraldevelopment Besides, our study draws on historical narratives anddocumentary review of the implementation process of Japan OVOP andThailand OTOP Comparative analysis is conducted to provide criticalanalysis of developing two movements in different countries

2 Literature review

2.1 Endogenous development theory

In a globalized, technology-driven, knowledge-based world,endogenous development theory plays a crucial role in providingimplications of economic development policies not only in advanced

countries but in developing countries as well Previously, variation instandards of living across

Policies and Sustainable Economic Development | 199

countries or regions is clearly associated with different amounts ofphysical capital such as public infrastructure However, physical capitalonly explains about one-third of the variation in income per capita acrossregions and countries Endogenous development theory can explain those

“two-thirds” of difference The pioneer of this theory is Romer (1986), whoargued that human capital, technology or innovation, and knowledge aresignificant contributors to economic growth In other words, economicgrowth is primarily the result of endogenous and not external forces Thetheory also focuses on positive externalities and spillover effects of aknowledge-based economy which will lead to economic development

In developing countries, where many governments has followed thepath of resources-based economy, local cultural, economic system,opportunities for marginalized groups are undoubtedly deteriorated Insuch circumstances, the governments of developing countries arerequired to re- identify and prioritize the goals for sustainable economieswith the participation of social capital, the role of the state, and localgovernment and non-governmental organizations (Nixon, 2009).Moreover, in the Sustainability Revolution, regions need to revitalize low-income groups, understand regional resources, develop potential sectorsthat bring added value for the region, and enhance humanempowerment (Nixon, 2009) These ideas lie in the concept of regionaldevelopment and endogenous growth theory In a globalized world, therole of locality and regional development is particularly significant.According to endogenous development approach, social development, thegrowth of human capital, the role of local communities and their activities

in the transformation of local resources are particularly emphasized.Martin and Sunley (1998) note that “endogenous development” is here

“synonymous with locally-based.” These authors refer to the concept ofstimulating regional development by the support of “local enterprise,small-firm growth, and technological innovation.”

Recently, Friedman (2007) identified seven elements of regional assetsnecessary for endogenous development, including basic human needs,organized civil society, the heritage of an established environment andpopular culture, intellectual and creative assets, regional resourceendowment, the quality of its environment, and infrastructure Besides,rural entrepreneurship is given its importance in regional sustainabledevelopment, in terms of poverty reduction, and meeting social needs(Dees, 2007; Torii, 2010) Endogenous development approach is especiallysuitable for rural areas because it puts the focus on making full use ofpotential resources, innovations, and human capital, preserves theenvironment in rural areas, and promotes semi-secondary industries This

is also the spirit of the OVOP movement This type of development doesnot make a large contribution to the economic development of the wholecountry, since each of the projects is generally small-scale, and the capitaland resources used for it are also small Still, the ‘reach’ of such anapproach, in terms of geographical and population coverage, can bevery significant indeed The aim of the OVOP movement is to create andmarket local products that, in time, can gain a “global reputation” (OitaOVOP Committee, 2006)

With respect to the management and implementation of ruraldevelopment policies, there are two approaches or strategies: “top-down” and “bottom-up.” For “top-down” approach, macro-levelcentralized planning strategies with decisions taken by urban elites based

in central governments As a result, development is often based onconceptions about what rural people want and need without discussionwith rural people Therefore, it can be implied that development can

be forced or promoted by states or development organizations ratherthan being inspired and shaped from the grassroots (Power, 2003) Suchstrategies have tended to be urban and industrial in nature, capital-intensive, and dominated by high technology and the large projectapproach (Stohr & Taylor, 1981) However, many countries applied “top-down” approach in their rural development policies mainly because of low

literacy levels of people in rural areas and the impacts of centralized

political system

By the early 1970s it was beginning to become widely accepted thatthe top-down approach to rural development was failing to make asignificant impact upon rural poverty As a result, during the 1980s and1990s there was comprehensive support for turning developmentaround and approaching it from the bottom-up Bottom-up or grassrootsdevelopment seeks to amend the imbalances of previous developmentstrategies by emphasizing localism and empowerment and by “puttingthe last first” (Chambers, 1997) “Participation” of local people hasturned out to be a significant factor in development theories andpractice It can play a significant role in the establishment of developmentprojects It can also be used to articulate local people’s concerns in thesetting of development priorities Development projects should be set bythe concerned communities to obtain their complete participation, ratherthan being orchestrated by outside organizations (Willis, 2005).Moreover, development “from below” considers development to be basedprimarily on maximum mobilization of each area’s natural, human, andinstitutional resources with the primary objective being the satisfaction ofthe basic needs of the inhabitants of that area From this point of view, the

“bottom-up” approach corresponds to the endogenous developmenttheory

In order to serve the mass of the population broadly categorized aspoor, or those regions described as disadvantaged, development policiesmust be oriented directly toward the problems of poverty, and must bemotivated and controlled from the bottom (Stohr & Taylor, 1981).Nevertheless, bottom-up approaches suffer from several limitations(Parnwell, 1992) First, it is the difficulty of finding effective channels ofcommunication through which individuals or groups at the local level canparticipate, the lack of any homogeneity of interests within such groups,the time, and money required to undertake any effective form ofparticipatory planning and, in many instances, fundamental differencesbetween local and national interests (Apthorpe & Conyers, 1982) Second,localized grassroots initiatives ultimately come into conflict with forcesthey cannot control, such as the broader issues of legal rights andresource distribution Consequently, it can be argued that increasedcollaboration between the nation and local, urban, and rural areas will

possibly result in a flexible and balanced approach to rural development(Parnwell, 1992).

Policies and Sustainable Economic Development | 201

2.2 Community-based social enterprise

Besides endogenous development theory, there is also someobservations motivating this study For the last four decade, we have hadcommunity-based agriculture being driven by governments and it has notworked particularly well in Vietnam We have had many problems withcorruption, undemocratic governments, political interference,mismanagement, overbearing bureaucracy We have a centralized andtop-down approach to push economic development in rural areas.However, the problems of depopulation, income inequality betweenurban and rural areas, poverty become more and more severe in Vietnamrural areas Furthermore, the emergence of ‘bottom-up’ model as well asthe contributions of community-based organizations to the success ofOVOP movement has proved the vital role of community-based socialenterprises in rural development In addition, few studies examined therole of community organizations to the success of OVOP movementmeanwhile the proportion of CBEs which engaged in OVOP/OTOP activitiesaccounted for approximately 66% Therefore, CBEs are believed asimportant elements for the applications of OVOP movement to besuccessful

Community-based social enterprises offer a new strategy for centered local economic development in the majority-developing world.The concept of social enterprise coming out of the western socialeconomy context is relatively unfamiliar in Asia Social enterprises arebusinesses that provide services, goods, trade for a social purpose, andoperate independently of the state (DTI, 2002) “Community based socialenterprises seek to provide sustainable economic activity in ways toensure that the money and benefits from such activity flow directly backinto the locality in which the social enterprise is based This is ofparticular value when the social enterprises are based in disadvantagedcommunities.” (DTI, 2002) While still embracing basic business functions,these types of enterprises “differ from most conventional businesses inthat they are not based on utilitarian economic models but have broaderpolitical, social, cultural, environmental, and economic goals” (Kerins &Jordan, 2010; Loban et al., 2013) Social enterprises trade like mainstreambusinesses in order to build long-term sustainability Earned income,therefore, has two functions: firstly, it supports fulfilling social objectives,and secondly, it represents a drive toward financial self- sufficiency(Peredo & McLean, 2006; Parkinson & Howorth, 2008) In short, CBSEs arecollective business ventures created by local communities, which aim tocontribute to both local economic and social development

people-A large amount of literature indicated that social enterprise couldcontribute to building sustainable rural communities and helpgovernments in poverty alleviation in developing countries (Steinerowski,2012; Peredo & Chrisman, 2006; Torri, 2010) The benefits of socialenterprises for rural areas described are such that, by using a bottom-upapproach, services provided will more appropriately meet local needs and,

by doing this, satisfy the distinctive needs of local communities (Torri,2010) Moreover, social enterprises are believed to present a potentialsolution bringing together business and social action, and combiningneeds of communities and the state (Steinerowski, 2012)

3 Comparative analysis of Japan OVOP and Thailand OTOP

3.1 History/Origin of OVOP

OVOP movement is considered as an example of endogenousdevelopment, and was originally developed in Oyama district in Oitaprefecture around 1960 when the local people promoted change fromtraditional cultivation to increase productivity Their promotion slogan was

“Cultivating plums for Hawaii.” After that, at the beginning of 1970s, thesuccess of Yufuin town in exploiting hot springs as a tourism resource andbecoming a famous tourism attraction was a major achievement for OVOP

In 1979, Mister Hiramatsu, the governor of Oita prefecture, officially tookthe initiative in promoting OVOP The main idea of the movement isencouraging villages or local areas to concentrate on one product thatthey did very well and then market that product abroad The OVOPconcept grew out of this

The OVOP movement had two objectives The first objective was toincrease the per capita income of the citizens The second objective of themovement was to create a society where all citizens could be proud andfeel satisfied with their lifestyles in each of their respective communities.The elderly could live with peace of mind, while the young could fullyexpress their vitality, and people could produce their own specialtiesincluding cultural and tourism events in the rural areas Hiramatsuaffirmed that “the ultimate goal of the OVOP movement is people-based;the term “product” refers not only for physical goods, but also tourism andculture activity” (Hiramatsu, 2008) In other words, OVOP movement aims

to improve local people’s life quality through accelerating both GrossNational Product (GNP) and Gross National Satisfaction (GNS)

3.2 Principles of Japan OVOP movement

The operation of OVOP movement is based on the following fourprinciples (Hiramatsu, 2008) Endogenous development theories werefully implemented and can be seen in Oita OVOP’s principles

Firstly, “local yet global” or “Think Globally, Act Locally” is meant for

“creating globally acceptable products and/or services based on localresources.” The marketable product is not only expected to sale at localshop in their area, but it can also be marketable both in their country andaround the world The products must represent local people’s pride inmaterial and cultural prosperity of their home villages

The second principle is self-reliance and creativity Even daily activitiesand local entertainment can be transformed into valuable products orservices to be marketed For instance, Activities such as big voice orshouting contests in Yufuin town and pond cleaning in Ajimu town attractpeople from outside Oita The principle also implies that the driving force

of OVOP is community’s citizens It is not government officials but thelocals who choose what they prefer to be their specialties to revitalizetheir area Local people have to take both risk and responsibility

Next, human resource development is the most importance of the OVOPprinciple The experience of the successful movement is inevitable to have

an excellent leader or outstanding human resource in the each area

Moreover, responsibility of Governments is irregularly not referred insome articles It is also one principle that Mister Hiramatsu mentioned.The main actor is citizens but local government can take the importancerole in promoting the driving force of local Though the government did notprovide locals with subsidies directly in order to avoid dependency,local government can support the movement by providing technicalguidance, researching products through shops in urban areas, supportingfor sale promotion, awarding people and groups to encourage theircreativity, establishing private company for local products, organizingproduct fairs (Hiramatsu, n.d.) Besides, the local government supports topromote human resources, which is the most important principal of themovement, through the establishment of training schools and R&Dinstitutions such as the Land of Abundance Training School, AgriculturalTraining School, Commerce School, Environment School, IT Academy andOVOP Women’s 100 Member Group, Agricultural Technology Centre,Mushrooms Research and Guidance Centre, Livestock ExperimentalStation and the Institute of Marine & Fisheries Science (Oita OVOPCommittee, 2006) Another effort of the Oita prefectural government insupporting to market OVOP products is to organize product fairs andexhibitions periodically and have promotion initiatives such as roadsidestation (“Michi-no-Eki” in Japanese) Roadside station was initiated in 1993

by local governments and national highway administrators to facilitatetourism and travelling Local communities along main highways providedautomobile users with retail goods and dining services The roadsidestations play a role as distribution channels for OVOP products as well as

“entrance points for OVOP services such as cultural events and ecotourism” (World Bank, 2004)

In sum, the OVOP movement is a campaign to facilitate regionaldevelopment through making locals aware of their potential andmaximizing it with their spirit of self-reliance while the prefecturalgovernment provides technical advice

Since the OVOP movement was initiated, each province in Japandevelops products and local brands in their own style, such as apples atAomori, peaches at Fukushima, strawberry at Tochigi, green tea atShizuoka, rice at Nikata, young green beans at Tohoku areas, hot springs

at Beppu, Shiitake Mushrooms at Oita As a result, this project has begun

to be recognized not only in Oita prefecture, but also in other parts ofJapan and other countries Through adding value and developing theuniqueness of products/ services for a specific region, the local’s incomehas been improved significantly, not to mention strengthening tourism of

a certain prefecture

Regarding OVOP’s achievement in Oita, in local products alone, therewas a dramatic increase in the number of products and sales, from 143and 35.9 billion in 1980 to 336 and 141 billion Yen in 2001 Intangibleproducts also witnessed a significant revitalization, for example: Oyama

town set up a unique agricultural production system through its operative, more than ten million tourists

co-visit Beppu for its hot springs, and Yufuin town has more than 3.8 millionvisitors every year to see its traditional products Totally, thanks to OVOPmovement, there were 808 OVOP-related products, facilities, events, andactivities created by 2002: 336 local unique products, 148 facilities such

as community centers, 133 cultural items, 111 local economic activities,and 80 activities related to environmental protection (Oita OVOPInternational Exchange Promotion Committee, 2005) However, it is noteasy to make an accurate measurement of an overall OVOP impact onthe prefectural economy

3.3 OVOP in Thailand and other countries

OVOP movement in Oita prefecture provides an ‘ideal’ model of success

in regional endogenous development policies Currently, the ideas of OVOPmovement have spread out and are being applied in many countries inAsia such as China, South Korea, Thailand, Malaysia, Laos, and so on Fromthe “One village - One product” concept, each country has created itsown slogan For instance, “One town one product” movement in Shanghaiand “One village one treasure” in Wuhan - China; “Satu Kampung SatuProduk” and “One district One product” in Malaysia; “One Tambon - Oneproduct” in Thailand; “One Barangay, One Product” in Philippine; “NeuangMuang, Neuang Phalittaphan” in Laos; “One Village, One craft” inVietnam Among these “OVOP versions,” “One Tambon - One product” inThailand emerged as the most “successful” of abroad OVOP movements

It can be said that the spirit or the principals of the ‘origin OVOP’ hasbeen remained in the majority of abroad OVOP movements’ objectives.However, there is a significant difference between the Japan origin OVOPand other abroad OVOP in terms of governance and implementation.Examining oversea OVOPs in several separate studies indicated that theapplication of OVOP in developing countries tend to follow a ‘top-down’approach with direct governance from the central government, such as inThailand, Malaysia, Malawi, Africa, China (Isuga, 2008; Okara, 2009;Shakya, 2011; Kurokawa, 2009) Meanwhile, the Japan origin OVOP isdescribed as “bottom-up” scheme which was initiated by communitieswith the local government’s support In this study, we conduct acomparative analysis between the Japan original OVOP and ThailandOTOP, which is considered as the most outstanding oversea OVOP, towithdraw experiences in applying OVOP movement in Vietnam ruraldevelopment

The former Prime Minister Thaksin Shinawat (Thailand) is the firstperson who employed this concept and implemented in reality (Shakya,2011) The “One Tambon One Product” (OTOP) campaign operated forfive years under Thaksin’s government (2001-2006), and was thencontinued under the government of Prime Minister Surayut (2006-2008).However, under the latter the campaign it was changed to “Local andCommunity Products.”

Similarities between Japan OVOP and Thailand OTOP

Regarding the similarities, both Japan and Thailand OVOP aims toimprove the average income of rural people through revitalizing localproducts and resources Similar to Japan, Thailand also

employed many strategies to help develop local products as well asproduction process in rural areas For instance, Thailand also establishedlocal research institutes such as Thai Sericulture Institute to help OTOPgroups Thai government offered a good many training courses to upgradeknowledge and skills of community leaders Japan and Thailand OVOPalso share some common marketing strategies and assistance:establishing close urban-rural economic links through consumers andtourists through developing road/highway networks, organizing productchampionship contests, publicly grant special awards to innovative localproducts/services, sponsoring trade fairs, exhibitions and antenna shops,advertising through public broadcast, creating OVOP/OTOP brand,constructing website for local products’ advertisement, and sellingproducts online, etc (Isuga, 2008).

Differences between Japan OVOP and Thailand OTOP

On the other hand, the differences between Japan OVOP and ThailandOTOP are exposed in several aspects of governance, financing, humanresource development, and so on as follows:

First, in terms of governance or the role of government, the originalOVOP movement in Japan has been majorly to community-orienteddevelopment encouraged by local government, concerning on optimizinglocal resource utilization (Hiramatsu, n.d.) Meanwhile, Thai’ OVOPmovement (or OTOP) has characterized as mass production andmarketing oriented development rather than community development inwhich is initiated by central government However, unlike community-oriented development, mass production and marketing orienteddevelopment has obstructed many small community industrial businesses

to be qualified for joining OTOP projects, because they are not able toproduce a large amount of goods matching with the qualification.Besides, OVOP movement is a local government’s policy but Thailand’sOTOP is a national policy The difference in policy levels between OVOPand OTOP relatively makes administrative systems different Figures 1 and

2 shows the difference in administrative structure between the originOVOP and Thailand’s OTOP The OTOP has been systematically driventhrough the function of the National OTOP Administrative Committee,specialized subcommittees, and various government agencies, and thebudget is allocated through the SMEs Promotion Fund This means thatthere is no coordination and there is overlap Meanwhile, in Oita, OVOP is atruly local development policy Central government support comes in form

of basic physical infrastructure to provide energy, water, materials,buildings, and mobility to facilitate economic efficiency of the project Thisultimately illustrates the core role of the local element in endogenousdevelopment theory discussed in the last section

Oita Prefecture Office

Oita OVOP International Exchange Promotion Committee Cities’ Office

Local People in Village Town/City

Prime Ministry’s Office

National OTOP Administrative Committee Related Ministries &

Agencies OTOP Office

Provincial OTOP Administrative Committee Province OTOP Office

Figure 1 Oita OVOP Administrative Structure

Source: Oita OVOP International Exchange Promotion Committee (2010)

Source: Takanashi

(2009)

Figure 2 Thailand OTOP Administrative Structure

Second, there is another difference between OVOP and OTOP regardingtheir target beneficiaries The former aims at village revitalization bycommunity-wide learning, whereas the latter focuses on enterprisepromotion by product upgrading OVOP movements in Japan graduallyintroduced a change in the way communities organize their productionactivities, first by going through a thorough evaluation of theirgeographical, resource and working environments under a competent andrespected leader, and then by committing their financial and humanresources to the growth of selected subsectors for community-widedevelopment In the case of OTOP, the prime focus is on existingproducts and enterprises producing them It is more an approach tobuilding on existing products and speeding up the growth rather thanintroducing a fundamental change in their activities OTOP officialsgenerally approached enterprises with greater potential for growth andfavored them with Government support As a result, OTOP project madethe advantaged producers more advantageous while making little efforts

to uplift disadvantaged producers, limiting the