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

Policies and Sustainable Economic Development | 197Sustainable Rural Development in Vietnam: Experience from Japan “One Village One Product” OVOP and Thailand “One Tampon One Product” OT

Policies and Sustainable Economic Development | 197

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 - anhnh@uel.edu.vn

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

NGUYEN TIEN DUNGVietnam 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

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 to benefitfrom development” Rural development is a vital element for povertyalleviation Around three-quarters of the world’s impoverished live in ruralregions Many poor people in cities are migrant workers and farmers wholeft rural areas Therefore, if living standards and income generations inrural areas are improved and rural immigrants to cities come back to ruralareas, excessive population inflowing to cities will be diminished, causingpoverty in both cities and rural areas to decline Besides, development ofrural areas can be a shelter when there is a lack of job offers in citiesbecause 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 much moresevere Among this context, the success of Japan “One Village One Product”(OVOP) movement in preventing economic deterioration and depopulation oflocal communities has drawn attentions from many governments indeveloping countries such as Thailand, Indonesia, and Vietnam However, notevery adapted OVOP program outside Japan is successful as expected Thedifference between Japan original OVOP movement and other adapted OVOPversions has raised questions about policy approach in rural developmentsuch as endogenous or exogenous growth and ‘bottom-up’ or ‘top-down’approach This study aims to investigate those different approaches in regiondevelopment policy through comparative analysis of Japan OVOP movementand its adapted program 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, endogenousdevelopment theory plays a crucial role in providing implications of economicdevelopment policies not only in advanced countries but in developingcountries as well Previously, variation in standards of living across

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countries or regions is clearly associated with different amounts of physicalcapital such as public infrastructure However, physical capital onlyexplains 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 are required

to re-identify and prioritize the goals for sustainable economies with theparticipation of social capital, the role of the state, and local governmentand non-governmental organizations (Nixon, 2009) Moreover, in theSustainability Revolution, regions need to revitalize low-income groups,understand regional resources, develop potential sectors that bring addedvalue for the region, and enhance human empowerment (Nixon, 2009).These ideas lie in the concept of regional development and endogenousgrowth theory In a globalized world, the role of locality and regionaldevelopment is particularly significant According to endogenousdevelopment approach, social development, the growth of human capital,the role of local communities and their activities in the transformation oflocal resources are particularly emphasized Martin and Sunley (1998) notethat “endogenous development” is here “synonymous with locally-based.”These authors refer to the concept of stimulating regional development bythe support of “local enterprise, small-firm growth, and technologicalinnovation.”

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 be verysignificant indeed The aim of the OVOP movement is to create and marketlocal products that, in time, can gain a “global reputation” (Oita OVOPCommittee, 2006)

With respect to the management and implementation of rural developmentpolicies, there are two approaches or strategies: “top-down” and “bottom-up.”For “top-down” approach, macro-level centralized planning strategies withdecisions taken by urban elites based in central governments As a result,development is often based on conceptions about what rural people want andneed without discussion with rural people Therefore, it can be implied thatdevelopment can be forced or promoted by states or developmentorganizations rather than being inspired and shaped from the grassroots(Power, 2003) Such strategies have tended to be urban and industrial innature, capital-intensive, and dominated by high technology and the largeproject approach (Stohr & Taylor, 1981) However, many countries applied

“top-down” approach in their rural development policies mainly because oflow literacy levels of people in rural areas and the impacts of centralizedpolitical system

By the early 1970s it was beginning to become widely accepted that thetop-down approach to rural development was failing to make a significantimpact upon rural poverty As a result, during the 1980s and 1990s there wascomprehensive support for turning development around and approaching itfrom the bottom-up Bottom-up or grassroots development seeks to amendthe imbalances of previous development strategies by emphasizing localismand empowerment and by “putting the last first” (Chambers, 1997)

“Participation” of local people has turned out to be a significant factor indevelopment theories and practice It can play a significant role in theestablishment of development projects It can also be used to articulate localpeople’s concerns in the setting of development priorities Developmentprojects should be set by the concerned communities to obtain their completeparticipation, rather than being orchestrated by outside organizations (Willis,2005) Moreover, development “from below” considers development to bebased primarily on maximum mobilization of each area’s natural, human, andinstitutional resources with the primary objective being the satisfaction of thebasic 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 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).

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 and top-down approach to push economic development in rural areas However,the problems of depopulation, income inequality between urban and ruralareas, poverty become more and more severe in Vietnam rural areas.Furthermore, the emergence of ‘bottom-up’ model as well as thecontributions of community-based organizations to the success of OVOPmovement has proved the vital role of community-based social enterprises

in rural development In addition, few studies examined the role ofcommunity organizations to the success of OVOP movement meanwhilethe proportion of CBEs which engaged in OVOP/OTOP activities accountedfor approximately 66% Therefore, CBEs are believed as importantelements for the applications of OVOP movement to be successful

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 social economycontext is relatively unfamiliar in Asia Social enterprises are businessesthat provide services, goods, trade for a social purpose, and operateindependently 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 of particularvalue 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

people-& McLean, 2006; Parkinson people-& Howorth, 2008) In short, CBSEs arecollective business ventures created by local communities, which aim tocontribute to both local economic and social development

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)

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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 were fullyimplemented 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 Themain actor is citizens but local government can take the importance role inpromoting the driving force of local Though the government did notprovide locals with subsidies directly in order to avoid dependency, localgovernment can support the movement by providing technical guidance,researching products through shops in urban areas, supporting for salepromotion, 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 promotehuman resources, which is the most important principal of the movement,through the establishment of training schools and R&D institutions such asthe 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 Researchand Guidance Centre, Livestock Experimental Station and the Institute ofMarine & Fisheries Science (Oita OVOP Committee, 2006) Another effort ofthe Oita prefectural government in supporting to market OVOP products is

to organize product fairs and exhibitions periodically and have promotioninitiatives such as roadside station (“Michi-no-Eki” in Japanese) Roadsidestation was initiated in 1993 by local governments and national highwayadministrators to facilitate tourism and travelling Local communities alongmain highways provided automobile users with retail goods and diningservices The roadside stations play a role as distribution channels forOVOP products as well as “entrance points for OVOP services such ascultural events and eco tourism” (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 acertain 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: Oyamatown set up a unique agricultural production system through its co-operative, more than ten million tourists

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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 on theprefectural 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 its ownslogan 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 Amongthese “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’ 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 for fiveyears under Thaksin’s government (2001-2006), and was then continuedunder the government of Prime Minister Surayut (2006-2008) However,under the latter the campaign it was changed to “Local and CommunityProducts.”

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 OVOP alsoshare some common marketing strategies and assistance: establishingclose urban-rural economic links through consumers and tourists throughdeveloping road/highway networks, organizing product championshipcontests, 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 original OVOPmovement in Japan has been majorly to community-oriented developmentencouraged by local government, concerning on optimizing local resourceutilization (Hiramatsu, n.d.) Meanwhile, Thai’ OVOP movement (or OTOP) hascharacterized as mass production and marketing oriented development ratherthan community development in which is initiated by central government.However, unlike community-oriented development, mass production andmarketing oriented development has obstructed many small communityindustrial businesses to be qualified for joining OTOP projects, because theyare not able to produce a large amount of goods matching with thequalification Besides, OVOP movement is a local government’s policy butThailand’s OTOP is a national policy The difference in policy levels betweenOVOP and OTOP relatively makes administrative systems different Figures 1and 2 shows the difference in administrative structure between the originOVOP and Thailand’s OTOP The OTOP has been systematically driven throughthe function of the National OTOP Administrative Committee, specializedsubcommittees, and various government agencies, and the budget isallocated through the SMEs Promotion Fund This means that there is nocoordination and there is overlap Meanwhile, in Oita, OVOP is a truly localdevelopment policy Central government support comes in form of basicphysical infrastructure to provide energy, water, materials, buildings, andmobility to facilitate economic efficiency of the project This ultimatelyillustrates the core role of the local element in endogenous developmenttheory discussed in the last section

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Oita Prefecture Office

Oita OVOP International Exchange Promotion Committee Cities’ Office

Local People in Village Town/City

Figure 1 Oita OVOP Administrative Structure

Source: Oita OVOP International Exchange Promotion Committee (2010)

Related Ministries &

Related Provincial OTOP Offices

Related District OTOP

OTOP Participating Tambon

Community Plan

Figure 2 Thailand OTOP Administrative Structure

Source: Takanashi (2009)

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