In recent times, agricultural land in rural areas has been cut away for the building of industrial parks and complexes. Many young people have left the countryside for big cities in the hope of earning a crust wherever they can. Only a small number of them have been recruited to work abroad under labour contracts while most of them are still jobless. Judging from past experience in some localities, the development of crafts and services through small- and medium-sized enterprises (SMEs) would help generate jobs for people living in the countryside.

According to the Ministry of Agriculture and Rural Development, the number of enterprises established in rural areas has kept increasing since the Enterprise Law was enacted in 2000. In 2001, there were 3,600 enterprises operating in agro-fishery-forestry sectors, and the figure has now amounted to 16,000, excluding nearly 8,600 cooperatives. The figure is said to be incomplete as it excludes millions of households involved in non-agricultural production and services and especially large farms. These enterprises are taking on between 25-26 percent of the non-agricultural labour force and the figure is expected to keep rising significantly in the coming years.

According to economists, to generate a job, it costs private enterprises VND35 million, limited companies VND45 million and State-owned enterprises (SOE) up to VND87.5 million. Investment capital is utilised in SMEs more effectively than in SOEs. To generate VND1 in revenue, SOEs have to invest VND562 million in their registered capital while private enterprises and limited companies need only VND197 million and VND188 million respectively.

There is no denying that SMEs play an important role in shifting economic structure and breathing new life into many rural areas. However, SMEs have not yet received due attention from local administrations. They lack floor space for production and business activities, find it difficult to access capital sources and lack market information updates.

Recently, some Red River delta provinces like Nam Dinh and Thai Binh grouped a number of craft villages together while other localities relocated agricultural land for resettlement areas, sparking outrage among local people. Past experiences in Vinh Phuc and Binh Duong provinces showed that enterprises would develop well if local administrations often had regular contact with them to iron out snags in their production and business activities.

To help SMEs in rural areas stand firm in the integration process and generate jobs for redundant workers, the State should have preferential investment policies to revamp SMEs. In addition, SMEs should be equally treated in their access to loans and floor space for production and business activities. Economic and social inequalities will only widen the gap between industry and agriculture and between rural and urban areas.

On March 31, 2006 the Minister of Agriculture and Rural Development approved a rural craft development scheme for rural and agricultural industrialisation and modernisation till 2010. Accordingly, efforts will be made to restore and develop rural crafts and services with the aim of generating additional 300,000 jobs a year.

Now it is high time that the agriculture and rural development sector coordinated with other sectors to create favourable conditions for rural enterprises to operate under the Enterprise Law. First and foremost, they should simplify administrative procedures and provide practical assistance for SMEs.