Dynamics of Micro and Small Enterprises in the Garment Industry in Vietnam

Abstract

This research is concerned with the dynamics of capital and labour in Micro and Small Enterprises (MSEs) in the garment industry in Vietnam. There has been a large reduction in poverty in Vietnam since its transition to a socialist market economy began in 1986 but approximately half of the Vietnamese people still live under the moderately poor poverty line of US$2 a day. The garment industry is labour intensive and has a considerable effect on poverty reduction through the creation of employment. In Vietnam the garment industry is the fifth largest in the world in terms of the value of exports. The main findings of my research are that conventional neo-liberal WC policies remain dominant for MSEs in the garment industry in Vietnam. The main reason provided by the enterprises for operating in the informal economy is that business was insecure. A range of activities was observed within the broadly defined Cut Make and Trim (CMT) and Full On Board (FOB) categories and micro enterprise subsistence and/or profit making, gender focussed, actualities. Global Commodity Chains (GCCs), Global Value Chains (GVCs) and domestic chains operate simultaneously in Vietnam. MSEs are predominantly involved in low skilled assembly carried out by workers who labour in poor conditions with low wages. However a level of process upgrading was observed in enterprises that produce for both export and domestic markets whereas the signs of social upgrading were negligible in terms of measurable standards or enabling rights. An examination of the wider benefits of the enterprises revealed that these were less for micro enterprises as fewer resources in terms of property were spread further among larger families than small enterprises.