The actual situation and solutions for small and medium enterprise development in Soc Trang Province, Viet Nam

Abstract

Soc Trang is among the poorest provinces in the Mekong Delta. The province's economy relies heavily on fisheries and agriculture. In the rural areas, women, ethnic minorities and poor households make up a high proportion of the population. Despite market difficulties, inflation and the impact of climate change, interestingly, the growth rate of provincial GDP was still high at 9.04% in 2011 (compared to a mere 5.89% for Vietnam as a whole). Small and Medium Enterprises (SMEs) make an important contribution to the province's GDP, state budget, exports and job creation. However, SMEs still face many challenges related to sustainable development in the near future, aiming to boost the value of production, exports, job creation, income improvement and community development. Research methods included group interviews with leaders of provincial/district departments and commune representatives, expert interviews, workshops as well as group and individual interviews with SMEs (including cooperatives and business households) with a total sample of 349 observations. In particular, the method of quick value chain analysis was used to select the 6 potential value chains based on five criteria (i.e. using local resources better; creating more job opportunities; using more women, the poor and ethnic minority workers; higher market potential; and more environmentally friendly). The findings of the SWOT analysis of SMEs were as follows: (1) The strengths consist of competitive and comparative advantages of products; (2) The weaknesses include weak market connection; lack of product brand name and trademark; low competitive capacity; limited management skills and capital; low bargaining powers; limited infrastructure for village transportation, 3-phase electricity, clean water in some districts; backward technology and a lack of market information and sources; limited investment and trade promotion as well as the inadequacy of horizontal and vertical linkages for the development of production and trade. (3) The opportunities include: support policies from the government and province related to loans, vocational training, administrative documents; festivals and fairs organized at the province, organization of “large field” model of rice safe production at industrial zones (4) The threats are the higher growth rate of input prices compared with output prices, competition from low priced, high quality import products, increase in diseases, and the impact of climate change.