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

Sustainable Rural Development in Vietnam: Experience from Japan “One Village One Product” OVOP and Thailand “One Tampon One Product” OTOP NGUYEN HOANG ANH Vietnam National University –

Sustainable Rural Development in Vietnam:

Experience from Japan “One Village One Product” (OVOP) and Thailand “One Tampon One Product” (OTOP)

NGUYEN HOANG ANH Vietnam National University – HCMC, University of Economics and Law - anhnh@uel.edu.vn

VO THI NGOC THUY Vietnam National University – HCMC, University of Economics and Law - thuyvtn@uel.edu.vn

NGUYEN TIEN DUNG Vietnam National University – HCMC, University of Economics and Law - ntdung@uel.edu.vn

Abstract

OVOP (One Village One Product) movement in Japan is considered as a way of reinforcing local communities’ entrepreneurial skills by employing local assets and knowledge, establishing value adding accomplishments, and forming human resources in the local economy This movement has been transferred into Asian countries and to other developing areas During these transfers, it has evolved and become different forms such as OTOP (One Tampon One Product) in Thailand and OVOC (One Village One Craft) in Vietnam However, not all the replicated OVOP models are successful This study attempts to investigate different approaches in rural development policy such as endogenous and exogenous development or “bottom-up” and

“top-down” through comparative analysis of Japan OVOP movement and Thailand OTOP This qualitative study utilizes documentary research to identify important factors having impact on the success of sustainable rural development and comparative analysis to provide critical analysis of developing two movements in different countries The study indicates that in order to reach the level of success as the origin OVOP movement, endogenous development strategy with ‘bottom-up’ approach should 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 “a strategy aiming at the improvement of economic and social living conditions, focusing on a specific group of poor people in

a rural area It assists the poorest group among the people living in rural areas to benefit from development” Rural development is a vital element for poverty alleviation Around three-quarters

of the world’s impoverished live in rural regions Many poor people in cities are migrant workers and farmers who left rural areas Therefore, if living standards and income generations in rural areas are improved and rural immigrants to cities come back to rural areas, excessive population inflowing

to cities will be diminished, causing poverty in both cities and rural areas to decline Besides, development of rural areas can be a shelter when there is a lack of job offers in cities because of depressed economic conditions

Although Asian countries are exposed to the forceful policy hastening industrialization, 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 to Brockerhoff (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 that those problems in an increasingly urbanized world will become much more severe Among this context, the success of Japan “One Village One Product” (OVOP) movement in preventing economic deterioration and depopulation of local communities has drawn attentions from many governments in developing countries such as Thailand, Indonesia, and Vietnam However, not every adapted OVOP program outside Japan is successful as expected The difference between Japan original OVOP movement and other adapted OVOP versions has raised questions about policy approach in rural development such as endogenous or exogenous growth and

‘bottom-up’ or ‘top-down’ approach This study aims to investigate those different approaches in region development policy through comparative analysis of Japan OVOP movement and its adapted program in which Thailand ‘One Tampon One Product’ (OTOP) movement is significantly influential This qualitative paper utilizes documentary research to identify important factors which have impact on the success of sustainable rural development Besides, our study draws on historical narratives and documentary review of the implementation process of Japan OVOP and Thailand OTOP Comparative analysis is conducted to provide critical analysis 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 providing implications of economic development policies not only in advanced countries but in developing countries as well Previously, variation in standards of living across

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

of difference The pioneer of this theory is Romer (1986), who argued that human capital, technology

or innovation, and knowledge are significant contributors to economic growth In other words, economic growth is primarily the result of endogenous and not external forces The theory also focuses on positive externalities and spillover effects of a knowledge-based economy which will lead

to economic development

In developing countries, where many governments has followed the path of resources-based economy, local cultural, economic system, opportunities for marginalized groups are undoubtedly deteriorated In such circumstances, the governments of developing countries are required to re- identify and prioritize the goals for sustainable economies with the participation of social capital, the role of the state, and local government and non-governmental organizations (Nixon, 2009) Moreover, in the Sustainability Revolution, regions need to revitalize low-income groups, understand regional resources, develop potential sectors that bring added value for the region, and enhance human empowerment (Nixon, 2009) These ideas lie in the concept of regional development and endogenous growth theory In a globalized world, the role of locality and regional development is particularly significant According to endogenous development approach, social development, the growth 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 of stimulating regional development by the support of “local enterprise, small-firm growth, and technological innovation.”

Recently, Friedman (2007) identified seven elements of regional assets necessary for endogenous development, including basic human needs, organized civil society, the heritage of an established environment and popular culture, intellectual and creative assets, regional resource endowment, the quality of its environment, and infrastructure Besides, rural entrepreneurship is given its importance in regional sustainable development, in terms of poverty reduction, and meeting social needs (Dees, 2007; Torii, 2010) Endogenous development approach is especially suitable for rural areas because it puts the focus on making full use of potential resources, innovations, and human capital, preserves the environment in rural areas, and promotes semi-secondary industries This is also the spirit of the OVOP movement This type of development does not make a large contribution

to the economic development of the whole country, since each of the projects is generally small-scale, and the capital and resources used for it are also small Still, the ‘reach’ of such an approach, in terms

of geographical and population coverage, can be very significant indeed The aim of the OVOP movement is to create and market local products that, in time, can gain a “global reputation” (Oita OVOP Committee, 2006)

With respect to the management and implementation of rural development policies, there are two approaches or strategies: “top-down” and “bottom-up.” For “top-down” approach, macro-level centralized planning strategies with decisions taken by urban elites based in central governments As

a result, development is often based on conceptions about what rural people want and need without discussion with rural people Therefore, it can be implied that development can be forced or promoted by states or development organizations rather than being inspired and shaped from the grassroots (Power, 2003) Such strategies have tended to be urban and industrial in nature, capital- intensive, and dominated by high technology and the large project approach (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 that the top-down approach to rural development was failing to make a significant impact upon rural poverty As a result, during the 1980s and 1990s there was comprehensive support for turning development around and approaching it from the bottom-up Bottom-up or grassroots development seeks to amend the imbalances of previous development strategies by emphasizing localism and empowerment and by

“putting the last first” (Chambers, 1997) “Participation” of local people has turned out to be a significant factor in development theories and practice It can play a significant role in the establishment of development projects It can also be used to articulate local people’s concerns in the setting of development priorities Development projects should be set by the concerned communities

to obtain their complete participation, rather than being orchestrated by outside organizations (Willis, 2005) Moreover, development “from below” considers development to be based primarily

on maximum mobilization of each area’s natural, human, and institutional resources with the primary objective being the satisfaction of the basic needs of the inhabitants of that area From this point of view, the “bottom-up” approach corresponds to the endogenous development theory

In order to serve the mass of the population broadly categorized as poor, or those regions described as disadvantaged, development policies must be oriented directly toward the problems of poverty, and must be motivated 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 of communication through which individuals or groups at the local level can participate, the lack of any homogeneity of interests within such groups, the time, and money required to undertake any effective form of participatory planning and, in many instances, fundamental differences between local and national interests (Apthorpe & Conyers, 1982) Second, localized grassroots initiatives ultimately come into conflict with forces they cannot control, such as the broader issues of legal rights and resource distribution Consequently, it can be argued that increased collaboration between the nation and local, urban, and rural areas will possibly result in a flexible and balanced approach to rural development (Parnwell, 1992)

2.2 Community-based social enterprise

Besides endogenous development theory, there is also some observations motivating this study For the last four decade, we have had community-based agriculture being driven by governments and it has not worked particularly well in Vietnam We have had many problems with corruption, undemocratic governments, political interference, mismanagement, overbearing bureaucracy We have a centralized and top-down approach to push economic development in rural areas However, the problems of depopulation, income inequality between urban and rural areas, poverty become more and more severe in Vietnam rural areas Furthermore, the emergence of ‘bottom-up’ model as well as the contributions of community-based organizations to the success of OVOP movement has proved the vital role of community-based social enterprises in rural development In addition, few studies examined the role of community organizations to the success of OVOP movement meanwhile the proportion of CBEs which engaged in OVOP/OTOP activities accounted for approximately 66% Therefore, CBEs are believed as important elements for the applications of OVOP movement to be successful

Community-based social enterprises offer a new strategy for people-centered local economic development in the majority-developing world The concept of social enterprise coming out of the western social economy context is relatively unfamiliar in Asia Social enterprises are businesses that provide services, goods, trade for a social purpose, and operate independently of the state (DTI, 2002) “Community based social enterprises seek to provide sustainable economic activity in ways

to ensure that the money and benefits from such activity flow directly back into the locality in which the social enterprise is based This is of particular value when the social enterprises are based in disadvantaged communities.” (DTI, 2002) While still embracing basic business functions, these types

of enterprises “differ from most conventional businesses in that they are not based on utilitarian economic models but have broader political, social, cultural, environmental, and economic goals” (Kerins & Jordan, 2010; Loban et al., 2013) Social enterprises trade like mainstream businesses 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 are collective business ventures created by local communities, which aim to contribute to both local economic and social development

A large amount of literature indicated that social enterprise could contribute to building sustainable rural communities and help governments in poverty alleviation in developing countries (Steinerowski, 2012; Peredo & Chrisman, 2006; Torri, 2010) The benefits of social enterprises for rural areas described are such that, by using a bottom-up approach, 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 potential solution bringing together business and social action, and combining needs 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 endogenous development, and was originally developed in Oyama district in Oita prefecture around 1960 when the local people promoted change from traditional cultivation to increase productivity Their promotion slogan was “Cultivating plums for Hawaii.” After that, at the beginning of 1970s, the success of Yufuin town in exploiting hot springs

as a tourism resource and becoming a famous tourism attraction was a major achievement for OVOP

In 1979, Mister Hiramatsu, the governor of Oita prefecture, officially took the initiative in promoting OVOP The main idea of the movement is encouraging villages or local areas to concentrate on one product that they did very well and then market that product abroad The OVOP concept grew out

of this

The OVOP movement had two objectives The first objective was to increase the per capita income

of the citizens The second objective of the movement was to create a society where all citizens could

be proud and feel satisfied with their lifestyles in each of their respective communities The elderly could live with peace of mind, while the young could fully express their vitality, and people could produce their own specialties including cultural and tourism events in the rural areas Hiramatsu affirmed that “the ultimate goal of the OVOP movement is people-based; the term “product” refers not only for physical goods, but also tourism and culture activity” (Hiramatsu, 2008) In other words, OVOP movement aims to improve local people’s life quality through accelerating both Gross National Product (GNP) and Gross National Satisfaction (GNS)

3.2 Principles of Japan OVOP movement

The operation of OVOP movement is based on the following four principles (Hiramatsu, 2008) Endogenous development theories were fully 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 local resources.” The marketable product is not only expected to sale at local shop in their area, but it can also be marketable both in their country and around the world The products must represent local people’s pride in material and cultural prosperity of their home villages

The second principle is self-reliance and creativity Even daily activities and local entertainment can be transformed into valuable products or services to be marketed For instance, Activities such

as big voice or shouting contests in Yufuin town and pond cleaning in Ajimu town attract people from outside Oita The principle also implies that the driving force of OVOP is community’s citizens

It is not government officials but the locals who choose what they prefer to be their specialties to revitalize their area Local people have to take both risk and responsibility

Next, human resource development is the most importance of the OVOP principle 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 in some articles It is also one principle that Mister Hiramatsu mentioned The main actor is citizens but local government can take the importance role in promoting the driving force of local Though the government did not provide locals with subsidies directly in order to avoid dependency, local government can support the movement by providing technical guidance, researching products through shops in urban areas, supporting for sale promotion, awarding people and groups to encourage their creativity, establishing private company for local products, organizing product fairs (Hiramatsu, n.d.) Besides, the local government supports to promote human resources, which is the most important principal

of the movement, through the establishment of training schools and R&D institutions such as the Land of Abundance Training School, Agricultural Training School, Commerce School, Environment School, IT Academy and OVOP Women’s 100 Member Group, Agricultural Technology Centre, Mushrooms Research and Guidance Centre, Livestock Experimental Station and the Institute of Marine & Fisheries Science (Oita OVOP Committee, 2006) Another effort of the Oita prefectural government in supporting to market OVOP products is to organize product fairs and exhibitions periodically and have promotion initiatives such as roadside station (“Michi-no-Eki” in Japanese) Roadside station was initiated in 1993 by local governments and national highway administrators to facilitate tourism and travelling Local communities along main highways provided automobile users with retail goods and dining services The roadside stations play a role as distribution channels for OVOP products as well as “entrance points for OVOP services such as cultural events and eco tourism” (World Bank, 2004)

In sum, the OVOP movement is a campaign to facilitate regional development through making locals aware of their potential and maximizing it with their spirit of self-reliance while the prefectural government provides technical advice

Since the OVOP movement was initiated, each province in Japan develops products and local brands in their own style, such as apples at Aomori, peaches at Fukushima, strawberry at Tochigi, green tea at Shizuoka, 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 of Japan and other countries Through adding value and developing the uniqueness of products/ services for a specific region, the local’s income has been improved significantly, not to mention strengthening tourism of a certain prefecture

Regarding OVOP’s achievement in Oita, in local products alone, there was a dramatic increase in the number of products and sales, from 143 and 35.9 billion in 1980 to 336 and 141 billion Yen in

2001 Intangible products also witnessed a significant revitalization, for example: Oyama town set

up a unique agricultural production system through its co-operative, more than ten million tourists

visit Beppu for its hot springs, and Yufuin town has more than 3.8 million visitors every year to see its traditional products Totally, thanks to OVOP movement, there were 808 OVOP-related products, facilities, events, and activities 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 OVOP International Exchange Promotion Committee, 2005) However, it is not easy to make an accurate measurement of an overall OVOP impact on the 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 OVOP movement have spread out and are being applied

in many countries in Asia such as China, South Korea, Thailand, Malaysia, Laos, and so on From the

“One village - One product” concept, each country has created its own slogan For instance, “One town one product” movement in Shanghai and “One village one treasure” in Wuhan - China; “Satu Kampung Satu Produk” and “One district One product” in Malaysia; “One Tambon - One product”

in Thailand; “One Barangay, One Product” in Philippine; “Neuang Muang, Neuang Phalittaphan” in Laos; “One Village, One craft” in Vietnam Among these “OVOP versions,” “One Tambon - One product” in Thailand emerged as the most “successful” of abroad OVOP movements

It can be said that the spirit or the principals of the ‘origin OVOP’ has been remained in the majority of abroad OVOP movements’ objectives However, there is a significant difference between the Japan origin OVOP and other abroad OVOP in terms of governance and implementation Examining oversea OVOPs in several separate studies indicated that the application of OVOP in developing countries tend to follow a ‘top-down’ approach with direct governance from the central government, such as in Thailand, Malaysia, Malawi, Africa, China (Isuga, 2008; Okara, 2009; Shakya, 2011; Kurokawa, 2009) Meanwhile, the Japan origin OVOP is described as “bottom-up” scheme which was initiated by communities with the local government’s support In this study, we conduct

a comparative analysis between the Japan original OVOP and Thailand OTOP, which is considered

as the most outstanding oversea OVOP, to withdraw experiences in applying OVOP movement in Vietnam rural development

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

Similarities between Japan OVOP and Thailand OTOP

Regarding the similarities, both Japan and Thailand OVOP aims to improve the average income

of rural people through revitalizing local products and resources Similar to Japan, Thailand also

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

Differences between Japan OVOP and Thailand OTOP

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

First, in terms of governance or the role of government, the original OVOP movement in Japan has been majorly to community-oriented development encouraged by local government, concerning

on optimizing local resource utilization (Hiramatsu, n.d.) Meanwhile, Thai’ OVOP movement (or OTOP) has characterized as mass production and marketing oriented development rather than community development in which is initiated by central government However, unlike community- oriented development, mass production and marketing oriented development has obstructed many small community industrial businesses to be qualified for joining OTOP projects, because they are not able to produce a large amount of goods matching with the qualification Besides, OVOP movement is a local government’s policy but Thailand’s OTOP is a national policy The difference in policy levels between OVOP and OTOP relatively makes administrative systems different Figures 1 and 2 shows the difference in administrative structure between the origin OVOP and Thailand’s OTOP The OTOP has been systematically driven through the function of the National OTOP Administrative Committee, specialized subcommittees, and various government agencies, and the budget is allocated through the SMEs Promotion Fund This means that there is no coordination and there is overlap Meanwhile, in Oita, OVOP is a truly 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 This ultimately illustrates the core role of the local element in endogenous development theory discussed in the last section

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 regarding their target beneficiaries The former aims at village revitalization by community-wide learning, whereas the latter focuses on enterprise promotion by product upgrading OVOP movements in Japan gradually introduced a change in the way communities organize their production activities, first by going through a thorough evaluation of their geographical, resource and working environments under a competent and respected leader, and then by committing their financial and human resources to the growth of selected subsectors for community-wide development In the case of OTOP, the prime focus is on existing products and enterprises producing them It is more an approach to building on existing products and speeding up the growth rather than introducing a fundamental change in their activities OTOP officials generally approached enterprises with greater potential for growth and favored them with Government support As a result, OTOP project made the advantaged producers more advantageous while making little efforts to uplift disadvantaged producers, limiting the