Global financial crisis hits Vietnam's craft villages hard

The global financial crisis has hit Vietnam's traditional craft villages, an industry leader said Friday.

Many workshops have gone bankrupt or are on the brink of shutting down because of slowing international exports, said Vo Quoc Tuan, chairman of Vietnam's Craft Village Association, reported dpa.

"Of more than 2000 traditional craft villages, 20 per cent are bankrupt, 20 per cent have filed for bankruptcy and the rest are only working intermittently," he said.

Last year, turnover stood at 850 million dollars. Despite predictions of 750 million dollars in turnover this year, earnings have only reached 500 million dollars, 40 per cent lower than last year.

Products such as pottery, rattan and furniture are made in villages specializing in one craft and exported to over 100 countries, including the United States, Japan and Europe.

The association represents over 2000 villages, with a labour force of 11 million people.

Craft villages have been a part of Vietnam for over 1000 years and are often small affairs with little infrastructure. Many are ineligible to receive bank loans and cannot single-handedly organize international exports. Membership of the association relieves these problems.

In many traditional craft villages, both employers and workers are worried for their futures.

"Our craftsmen had to work day and night last year to finish orders. Orders have halved this year, and we have had to halve our workforce," said Duong The Vinh, chairman of Thanh Vinh Furniture Co-operative, which has 40 craftsmen in Bac Ninh Province, adjacent to Hanoi.

"Last year, I could earn 1.4 million dong (80 dollars) a month, but now I only make 700,000 dong (40 dollars)," said Nguyen Thu Huong, a worker at Bat Trang ceramic village. Bat Trang exports across the world and is a popular stop for tourists in Hanoi. "I am not sure if I will be employed next year."

"If we don't receive support from the government, millions of people will lose their jobs," said Tuan. Vietnam's government recently predicted that unemployment might increase by 300,000 people in 2009, but actual figures remain unclear.

Tuan said the association had worked with government agencies to call for a loan of 2 trillion dong (117 million dollars) for the first quarter of 2009 to help stabilize production next year.

The government has promised to grant a loan, but he could not say how much money the association would actually receive.

Vietnam is set to introduce unemployment insurance in 2009, but workers paying into the fund will not be able to collect benefits for the first 12 months.

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