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

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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

VO THI NGOC THUY
Vietnam National University – HCMC, University of Economics and Law

NGUYEN TIEN DUNG
Vietnam National University – HCMC, University of Economics and Law

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


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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

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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).


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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).


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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 topdown 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 peoplecentered 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).


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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 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.


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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 cooperative, more than ten million tourists


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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


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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.


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Oita Prefecture Office

Cities’ Office

Oita OVOP International
Exchange Promotion
Committee

Local People in Village
Town/City

Figure 1. Oita OVOP Administrative Structure
Source: Oita OVOP International Exchange Promotion Committee (2010)

Relat

Rela

O

R

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


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


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project’s impact on poverty alleviation. In this aspect, Thailand OTOP did
not effectively target the poor (Kurokawa, 2009).
Third, regarding financing sources, there is a huge difference between
the original OVOP and Thailand’s OTOP. For Oita OVOP, the local
government did not provide direct subsidies for OVOP producers in order to
avoid dependence. OVOP groups in Japan mainly rely on private credits
offered by local banks and cooperatives. Conversely, Thai government
offered a lot of micro-credit financing programs and even direct
government subsidies such as the OTOP Policy Loan Project, the Village
Development Fund, the People’s Bank Program, the Government Savings
Bank, the Bank of Agriculture and Agricultural Cooperatives, the Bank for
Small and Medium Sized Enterprises, and so forth, in order to help farmers
access to loans and have funds to start-up or expand their OTOP ventures.
About the efficient use of these financing programs and subsidies, Jitsuda
(2010) stated that in the beginning it was hugely successful because every
ministry poured in budgets to please the government. The total budget for
this project was billions of baht. However, he estimated that only thirty
percent of the money was spent on developing the project (Jitsuda, 2010).
Governmental subsidies and cheap loans do not contribute to empower
the rural poor in the long term, but making them more dependent on
external financial assistance and less accountable to the project that they
themselves initiate in OTOP program.

Lastly, as for human resource development aspect, Oita government is
fully aware of the importance of developing physical products and
enhancing people’s skills and knowledge. Oita local government
established training schools to develop entrepreneurship for local people in
each community so that some trainees can become future leaders in their
communities. The characteristics of the schools depend on the local
demand of learning, including Agricultural Training School, a Commerce
School, and a Tourism School. The local residents come to class to learn
from experienced business owners, or experts in the fields of their
products to learn how to create a product, deal with finance, and manage
operational activities effectively (Pitchayapisut, 2008). With the same aim
of human resources development, Thai government also provided training
programs for local residents. However, the difference is that the training
just provides basic vocational knowledge instead of specializing in the
local product. Thus, they find the class not much useful for local projects.
This is understandable because local people are not involved in the
selection of trainers. The training is organized by national government who
does not understand the demand of local people; thus select the trainers
whose knowledge is not applicable in the unique local resources (Kaoru et
al., 2011).
Other differences between Japan OVOP and Thailand’s OTOP include the
following. Thai community entrepreneurs do not distribute products
directly to the end-consumer, while OVOP entrepreneurs promote products
directly to restaurants or launch them directly to consumers; (Kurokawa
2011). OTOP entrepreneurs make products but don not use local capital,
natural resources or local culture, but instead copy products, while OVOP
enterprises focus on uniquely local products (Murayama, 2014).


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In sum, the original OVOP policy in Japan is a locally led and bottom-up
movement, which focuses on self-sufficiency while the OTOP scheme in
Thailand is a centrally led, top-down policy that involves continuous
government assistance. The Oita movement was an endogenous one
without any precedent and the prefectural government independently
developed it. On the other hand, though adapted from Japan OVOP, OTOP
is not a truly regional endogenous development policy but a governmentled project for the manufacturers of new local specialties. Nevertheless,
the OTOP program has positive impacts: an increase in income, a
reduction of outmigration, a greater collaboration within the community.
For example, most households received 213,420 Baht ($6,467.30) per year
before joining the program; however, after joining the program,
households had an average income of 244,452 Baht ($7,407.70), a 14.5
percent increase. Through marketing and exhibitions, OTOP products were
able to increase sales from 6.35 million Baht to 7.82 million Baht (23.1
percent increase). Yet, the Thailand’s OTOP also has many flaws: a rise of
household debt, a lack of production of quality products, a general lack of
innovation in the commodities, a lack of entrepreneurial skills to manage
businesses and a dependence on the government’s assistance. Besides,
though the report showed that there was an increase in the earning
villagers received, only a handful of people’s wages had gone up. Most
groups that were already successful in setting up OTOP businesses
received financial assistance from the government (Jitsuda, 2010).
There are several reasons behind the decision of choosing “top-down”
approach in Thailand rural development instead of the Japan original
“bottom-up” OVOP movement. The first reason is due to political interests
of Thai government during the time of conducting OTOP. OTOP is one of
pro-poor policies initiated by former Prime Minister Thaksin Shinawatra,
who aims to exert a greater influence on the rural poor. The basic
motivation of the former Prime Minister Thaksin was to get support from

the farmers and to show his capacity to foster coordination among
government program for Thai people’s lives. The success of the policy
contributes to the greater approval of the majority in society for his
position of the Prime Minister his incoming election victory. McCargo and
Pathmanand argue that the OTOP program was designed to attract votes
from “new networks of local support,” which were mainly people in the
small business network. Only by top-down mechanism of policy
implementation, the result could come out quickly and widely. Other
reasons of applying “bottom-up” OTOP include the economic incapability
of local governments and the lack of education and production knowledge
of many villagers.
4. Vietnam’s potentials in adapting the OVOP movement

Similar to Thailand, Vietnam, compared with other countries around the
world, is good at producing agricultural products. Three quarters of the
population and around 90 percent of the poor living in rural areas.
Additionally, Vietnam has 54 ethnic people groups and each ethnic group with
its traditional handicrafts and cultural identity will be the unlimited resources
for revitalizing and develop handicrafts as well as craft tourism. As for craft


villages in special, there are over 2,700 craft villages nationwide, which
employ nearly 30% of the labor force in rural areas (MARD, 2010). Among


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Development | 209

2700 craft villages in Vietnam, the number of craft villages engaging in
bamboo and rattan weaving accounts for 24 percent of the country's

traditional craft villages. Fabric weaving craft accounts for 14.5 percent of
the total; following by furniture making craft and embroidery and lace
making craft with 11.4 and 11.5 percent, respectively (Ngo, 2005). As
shown in Figure 3, craft villages are mostly located in the Red River Delta
(60%) and in the Central Region (30%) and the South (10%) (VEA, 2008).
Many Vietnam’s handicrafts have high aesthetic and traditional value and
meet the criteria of “one village one product.” However, the development
of agricultural products and handicrafts has not been up to their
potentials.

Figure 3. Distribution of craft villages in Vietnam
Source: MARD (2010)

Generally speaking, Vietnam faces a lot challenges in rural development,
including the dependence of agricultural production on investment in labor
and natural resources, slow growth of non-agricultural crafts, few rural
enterprises, underdeveloped infrastructure, low quality production, loose
cooperation and association among farmers, and local authorities’ lack of
budget and capacity


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(Dang, 2007). Vietnam’s craft villages in special are facing with challenges
such as lack of master planning, excessive unplanned growth, and causing
environment pollution due to backward technology, equipment, and skills.
In these villages, there is low percentage of trained laborers, poor market
approaching, and lack of business skills (Ngo, 2005).
During the last four decades, Vietnam government has committed its
mission of poverty alleviation, which has been expressed in “Five Year

Social-Economic Development Plans” since 1976. Hence, agriculture and
rural development lie at the very heart of Vietnam’s development
strategies. Although Vietnam government recognizes the importance of
improving farmers’ actual need and self-reliance capacity, policies and
programs related to the state’s assistance is still “more on a top-down
central planning modality than dialogues” (Rudengren et al., 2012).
From the efficiency of the OVOP movement, the Ministry of Agriculture
and Rural Development, Vietnam has been implementing the “One Village
One Craft” (OVOC) scheme since 2006 with an aim to push up
development of craft villages toward specialization, encouraging people to
make full use of local resources in order to enhance community strengths
and revitalize traditional craft villages. At the first stage, with the support
of Japan International Cooperation Agency (JICA), some provinces/villages
in the North area, such as Ha Noi, Lai Chau, Dien Bien, Son La, and Hoa
Binh, have participated in the OVOC project. However, there is almost no
report or study that assesses the achievement of OVOC program. Mister
Luu Duy Tan, Chairman of the Vietnam’s Craft Village Association, claimed
that not many handicraft producers/farmers are aware of the existence of
OVOP/OVOC program as well as its principals. Local villagers even suffer
lack of knowledge and skills of production, market, entrepreneurship, and
promotion, and they cannot define their own competency. Besides, within
each village, due to the convention/customs of keeping “trade secret,”
there is no sharing of production techniques among households/villages.
Therefore, Vietnam OVOC program is still a government plan and does not
succeed as expected.
5. Suggestions to develop Vietnam OVOC movement
In order to make the OVOC program more effective for the sake of
sustainable rural development and poverty alleviation, Vietnam government
could learn from the experience of implementing OVOP movement in Japan as
well as in other developing countries, Thailand included.

According to Power (2003), development cannot always be planned and
promoted by states but it must also be seen as emerging from the grassroots.
The key point of this success is that the OVOP policy emphasizes on selfreliance and endogenous development of the communities. To be sustainable,
community development must be carried out by community members
themselves rather than depending on supports from outsiders. However, in
the era of globalization, it seems difficult for local communities, especially in
undeveloped areas in developing countries, to depend only on endogenous
development. Yoshimura (2004) suggests that villagers should utilize not only
local resources and local values but also support from national government
and inter-regional cooperation


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to establish a network connecting various local economic and civil
movements. In OVOP, self-reliance is one of the most important principles
in the adoption of the endogenous development theory but it is difficult for
villagers to find information and markets for their specialties and products
without the support from national governments or other outside
stakeholders. Therefore, in some aspects, endogenous development is
dependent on exogenous factors. Besides, one of the aims of the OVOP
movement is to produce local specialties and products that can be sold
internationally, exogenous factors can support endogenous development
and help to export local products to international markets through its
linkage with the indigenous industry of the local community. Nevertheless,
to reach the level of success as Oita OVOP movement, local people still
play a key role in community development process, and the local
government only gave technical support, encouragement, and marketing
promotion, not much of financial subsidies, because too much dependence

on government might weaken the dynamism of the movement.
In the case of Vietnam, we suggest that at the first stage the OVOC
scheme should follow the ‘top-down’ approach with the emphasis on the
government and outsider’s support of production knowledge, market,
business skills, and even finance sources to improve rural infrastructure
and help local villagers define their own competency. At the second stage,
the “top-down” approach should be transformed gradually into the
“bottom-up” approach. Self-reliance should be propagated by showing the
model of successful cases under the strong guidance of local
administration through dialogs between local government and villagers.
In addition, community-based social enterprises (CBSEs) should be
encouraged to play an active role in sparking startup spirit and evoking rural
entrepreneurship. In both Japan original OVOP and Thailand adapted OTOP,
CBSEs contribute a lot in the success of these movements. CBSE is a form of
community organization which is considered to be a focus of recent
sustainable rural development projects in developing countries. It will help
impoverished farmers to “become independent as active beneficiaries of
development” (JICA, 2000). Besides, from the perspective of efficiency, donor
agencies and business angels would prefer farmers’ organizations, in
comparison with assistance of individuals. Additionally, CBSEs can enhance
villagers’ choices in development. For instance, CBSEs are able to reconstruct
roads or develop markets where individuals/households cannot. Although
‘Social Enterprise’ seems to be a new concept in Vietnam, there were more
than 1,000 NGOs, 320 national associations, and more than 2,000
associations operating on voluntary principles and autonomy at the central
and local levels (CIEM, 2012). These organizations have certain characteristics
of social enterprises and can be transformed into social enterprises in the
future. Furthermore, according to a survey on Vietnam’s social enterprises
that was carried out by CSIP Vietnam, the British Council, and Spark in 2011,
68% of Social Enterprises in some way have been working toward contributing

to poverty reduction, life stability, and income improvement through providing
education and vocational training, enhancing skills, providing equipment, and
updating knowledge. Among these organizations, approximately 38 percent of


surveyed enterprises are operating in crafts industry, which means we can
rely on these social enterprises to support and


212 | Policies and Sustainable Economic Development

develop the OVOC program. During the implementation process of OVOC
program, local government should pay attention to these features to
support the establishment of CBSEs.
In detail, the following steps should be considered to make the Vietnam
OVOC movement successful:
The National government (such as MARDs) has campaigns and
strategies to make local government officials, academics and the wider
public acknowledge the philosophy of the initiative OVOP/OVOC as well as
its principle and its methodology. The OVOC movement is publicized
widely through mass media and galvanizes their competitive spirit.
At the same time, nationwide delivery services, transportation networks,
telecommunication infrastructure, rural electrification infrastructure
included, need to be expanded and improved quickly. It enhances human
and social capabilities and requires the investment from the central
government.
Local government directly called for the grass-roots leaders to take
initiative of movement (from Oita OVOP movement’s experience).
Local leaders asked the people to find commerciable products in each
town and village and employ their local wisdom in product development

under the support of local government.
Prefecture government encourages establishing community-based social
enterprises with the participation of local people to not only nurture local
leaders and evoke rural entrepreneurship but also play a role as entity
representative in business contracts. Besides, CBSEs could diffuse
production knowledge and techniques to its members who are local
villagers to help them develop and improve the quality of local products as
well as production process.
Local government, NGOs and CBSEs cooperate to help develop villagers’
business capabilities as well as improve conditions for small-scale
businesses and entrepreneurs. Villagers’ business capabilities could be
developed through vocational training and seminars on technical
improvement for existing products or the introduction of new products. As
for conditions for small-scale business, various projects should be
implemented such as microfinance services, shipping and distribution
cooperatives, and market development.
Training and education are offered to regional and industrial leaders.
Prefecture research organizations mobilize technical supports for product
development.
A community product standard system at prefectural level and national level
should be developed.

Prefectural government took initiative to propagate OVOP products in
the global market in the big cities, including exhibition of OVOP products.
Effective channel of distribution and marketing of OVOP products were
established and promoted.


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Development | 213

6. Conclusion
The Japan OVOP movement implies a crucial model of success in
sustainably rural development policies. The movement encouraged and
empowered local people to uncover opportunities for economic growth by
utilizing local resources and local wisdom to build up local industries with a
global outlook. The movement, along with the emergence of CBSEs is
believed to be a suitable approach to the issue of renovation of local
industries in the globalization era. Learning from Japan OVOP movement,
many developing countries, Vietnam included, has adapted the
movement, and transformed it into their own version. However, those
adapted OVOP programs have not had big impacts on local economy as
expected. It requires entirely change the people's mindset which had been
enclosed in the small community and never been familiar with business
and commercial issues. It requires continuous efforts by local leaders and
administrations. In order to reach the level of success as the origin OVOP
movement, policies and development plans should aim to build up a
culture of self-reliance and creativity, encourage and support local people
to make products/services that have unique characteristics in each area
and utilize local people’s social capital through CBSEs by developing
networks between farmers/villagers and their prefectures, urban cities,
agricultural cooperatives, NGOs, resident associations and tourism
associations. In other words, endogenous development strategy with
‘bottom-up’ approach is emphasized, along with the support of exogenous
factors.
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