Sustainable Poverty Reduction from Innovative Projects

These outcomes are achieved in three years by the ‘Making Markets Work Better for the Poor, Phase 2’ (M4P2) project, which is supported by the UK Department for International Development (DFID) and the Asian Development Bank (ADB), managed and implemented by ADB and the Ministry of Planning and Investment (MPI).

 

According to experts, the new approach which empowers farmers through collaboration with enterprises has been tested in seven VCF projects to make Vietnam’s rural markets function better, and with greater fairness, for the poor men and women that participate in them. The projects are ranging from pro-poor mushroom-growth technology, to ethnic minority’s organic tea, origin traceable H’mong beef, fertilizer produced from cassava waste, semi-washed Robusta coffee, pomelo, and quality-controlled fish production for international supermarket chains. 

 

The projects were implemented by a range of grantee companies, from household enterprises, to joint venture companies, foreign multinationals and state owned enterprises, reflecting the diversity of businesses operating in Vietnam’s agricultural sector.

 

The Vietnam Challenge Fund (VCF) awarded cost-sharing grants to these typically risky but highly prospective projects, tested new supply chain systems and initiatives, and the successful projects now offer business models with much wider applicability and greater scalability across Vietnam. Total grant funding by VCF was just over US$1.26m, with a further US$2.45m sourced from participating companies.

 

Ms Fiona Lappin, Head of DFID Vietnam, said: “Fundamentally, the Vietnam Challenge Fund aims to harness one of the core strengths of the private sector in Vietnam - its ability to generate and invest in new ideas - use it for the benefit of the poor, through commercially viable business models with a strong social impact.” 

 

The other innovative instrument of the three-year initiative M4P2 is policy action research, aimed at instigating policy change at the district, provincial and national levels. This component focuses on unblocking the constraints that communities and businesses face when they seek to move people out of poverty. It aims to link policy design with practical pilot experimentation, so as to develop better, demand-driven and more informed policies, using grants totalling US$500,000, disbursed to nine research institutes in Vietnam.

 

Mr Tomoyuki Kimura, ADB Country Director for Vietnam, said: “The policy action research has been conducted in a new way by linking policy design with practical pilot experimentation, so as to develop better, demand driven and more informed policies.

 

Mr Hoang Viet Khang, Head of Foreign Economic Relations Department at MPI, said: “Through a number of innovative projects and tangible policy changes, the M4P2 project has increased opportunities for the poor to participate in - and benefit from - the economic growth process, in locations as far as in Cao Bang and Quang Tri.

 

M4P2 launched the first round of policy action research in late 2009, focusing on agricultural contracting; and supporting improvements to the technical vocational education and training system (TVET). These research studies have helped the government to enact changes to the Decree on agricultural contracting, and demonstrated new institutional arrangements to improve the functioning of the TVET system to better meet the needs of businesses, such as those in Vinh Phuc province.

 

The second round of policy action research topics are currently being completed and focus on developing community driven models for rural road maintenance, across a number of provinces in Vietnam, which if successful will be incorporated into the ‘New Rural Development Programme’ (Prime Minister’s Decision 800); and improving skills development in the informal sector, so as to improve access to better incomes and jobs.