It’s not charity: the rise of social enterprise in Vietnam.
More work still needs to be done to dispel confusion surrounding social enterprises in Vietnam and help promote sustainable growth.
It’s mid-afternoon in the village of Duong O, Bac Ninh province, but Huong hasn’t got time to break for tea. She’s only halfway through the long, exhausting job of making a traditional paper called Do. It’s winter and her hands are raw from the process of dipping a framed screen into a trough of frigid water, raising the pulpy tree bark fibres from the surface and transferring them onto a board, where they will be pressed and dried to become a single sheet of paper.
On a good day, she can make around 800 pages, but it will take a month before the handmade paper is fit to sell. It’s no surprise that Houng’s family is one of only three left in the area – just a one-hour drive from Vietnam’s capital Hanoi – that is still involved in this disappearing tradition. The country has experienced rapid development over the last 30 years and the villagers are now using their skills to produce toilet paper and napkins instead.
She admits it’s difficult to convince her children that the hard labour involved in keeping this industry alive is worth it when the monetary rewards remain so meagre. Part of the problem is finding a reliable market for the products used for centuries by traditional calligraphers. Despite the high quality and durability of the paper, artists have moved on to work with other, cheaper, materials.
Social enterprise Zo wants to find a new way to keep the tradition alive. Its founder Hong Nhung is creating a demand for the paper by finding modern uses, such as lamps, notebooks, envelopes and greetings cards. Finding a market for the product is crucial, but it is just one piece of a complex puzzle.
“That’s why we chose the social enterprise model. It can make that link between the government, the villagers, the markets, the customers – all the actors in the value chain have to be involved. All are equally important.”
Nhung believes social enterprises are vital to meet the needs of a developing country where business and government struggle to solve continuing problems of poverty, social inequality and environmental pressures. Politicians appear to now recognise the role they play in the nation’s growth. Vietnam’s Enterprise Law was revised in 2014 to provide a legal definition of social enterprise, and the government promised to “encourage, support and promote the development of social enterprises”.
According to the legislation, social entrepreneurs will be “considered for special treatment” in the granting of licenses and certificates. They will also be able to obtain funding, sponsorship and investment from Vietnamese and foreign individuals, enterprises and NGOs to cover their operational and administration costs.
But what impact will this official recognition of social enterprise have for businesses on the ground?
Nguyen Dinh Nguyen, chief executive of Hanoi-based social enterprise Tohe, doubts the law will make any immediate difference. He says social enterprises are still misunderstood by both investors and customers, who remain skeptical about their motives, and adds that fear of corruption makes it a constant struggle to convince people that profits are going where social entrepreneurs claim. In Tohe’s case, this is to help provide art lessons and scholarships to disadvantaged children.
Nguyen says many business people use government connections to get ahead. The problem is complicated by the fact that a successful business in Vietnam is not about advertising, it’s about word of mouth. So without that customer loyalty, there is little hope of survival.
Awareness-raising would appear key to supporting the work of social enterprises in Vietnam. Duong Phuong Hanh, director of the Centre for Consultancy and Education of the Deaf and Hard of Hearing in Ho Chi Minh City, explains that until recently social enterprises were thought of as organisations that are similar to charities and rely on donations. Urgent work needs to be done to dispel this confusion.
Hanh, who has been deaf since she was six years old and uses a hearing aid, explains how despite studying hard to become a chemical engineer, her disability held her back and she was forced to accept a smaller wage compared to her hearing colleagues. She started CED to provide education for others like herself who have been marginalised because the current system provides little or no support for the disabled.
Hanh believes more efforts from the government to showcase the achievements of social enterprises will help her organisation gain support from mainstream society. She would also like to see more direct assistance in terms of business tax relief and help with rent of business properties. Social enterprises are currently treated on a par with other profit-driven business models, and Hanh admits she struggles to pay both her staff and herself a sufficient living wage.
“If I had more support from the government, I could improve the education of the deaf community,” she says. “We have many deaf people who can’t hear or speak, they just shake or nod their heads to communicate. I want to develop education of the deaf in Vietnam and make it a country where everyone, no matter what their ability, can contribute to society.”
Despite the challenges, Hanh remains optimistic. She says connections made with western nations such as the UK, where social enterprises are well established, are helping them learn more about how to make the business model a success.
“Vietnamese like the idea of social enterprises when they first learn about them,” she adds. “We are a traditional culture and love to share. That’s a good start for everyone who wants to establish social enterprises. Vietnamese people, however, still face problems with money and are therefore cautious about risking that prosperity. But if you help another person that makes you happy. So social enterprises should be welcomed in Vietnam.”
The above article by Matthew Jenkin first published on theguardian.com in March, 2015.