Browsing by Person "Heidhues, Franz"

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Accessing rural finance, The rural financial market in Northern Vietnam
(2007) Dufhues, Thomas; Heidhues, Franz
During the transition of the Vietnamese economy, adaptation of the financial system was one of the most challenging reforms. A major task of this reform was to expand the financial systems outreach to the emerging private sector and household (HH) economies, especially in rural areas. Therefore, state-owned financial intermediaries such as the Vietnam Bank for Agriculture and Rural Development (VBARD) and the Vietnam Bank for the Poor (VBP) have been established. Despite general successes in terms of credit outreach, certain population groups seem to have been bypassed by both banks. Furthermore, the strategy pursued by national financial policy has focused mainly on credit supply. Other financial services that potentially have a deeper outreach, e.g. savings products, have been neglected by the government. The overall objective of this research study was to create knowledge on the factors that impede or support access of rural HHs in Northern Vietnam to the formal financial system. Access can be hampered at different levels of the financial system, namely macro/meso level, intermediary level and HH level. A joint analysis of the three levels is therefore appropriate. This implies different methodologies and data collection methods. Thus, this cumulative thesis is divided into four main sections investigating different levels of the system and applying different methodologies (i.e. literature review and information economics, principal component, binary logit, and conjoint analysis). The data collection took place between March 2001 and 2002 in two provinces of Northern Vietnam. In total, 260 HHs were surveyed. In addition, qualitative data were collected at all levels. Furthermore, secondary data were collected from relevant institutions. The rural financial market in Vietnam is still dominated by the aforementioned subsidized financial intermediaries, impeding the establishment of viable financial services. Through the creation of the Vietnam Bank for Social Policies (VBSP) (the successor of the dissolved VBP since 2003) the Vietnamese government has separated political lending from commercial lending. Evidence from development banks in other countries suggests that the VBARD, now freed from political lending, is likely to dismiss its peasant clientele and concentrate on wealthier farmers. The question is how long the Government can finance the VBSP, and who will serve the rural poor after the government stops the subsidies and the VBPS cannot carry on its operations? The sustainability of the financial system is still threatened by an accumulation of non-performing loans amassed by state-owned enterprises. In addition, the problem of non-performing loans is spreading to rural HHs. Apart from representing macro-economic threats to the financial system, this moral hazard behavior is hindering the establishment of viable rural financial intermediation. The breadth of outreach of the formal rural lenders is immense. However, the poorest HHs are seldom clients. But general poverty (as captured in the poverty index) does not significantly influence access to formal credit. This means that the poorest HHs simply have much less demand for formal credit products. Improving credit products or offering new credit lines would only slightly improve the credit coverage of poorer HHs. A more promising approach would be to introduce a specialized pro-poor extension service combined with a general improvement in the infrastructure. Nevertheless, the number of access-constrained HHs is surprisingly low, at 16%. One explanation may be the eradication of former access constraints through locally disbursed group credits. However, considering the anecdotal reports of very low repayment rates, the price of eradicating these access constraints has likely been a decrease in financial sustainability. Nevertheless, some barriers to access continue to exist, particularly for ethnic minorities or female-headed HHs. To reduce these access barriers locally-oriented actions should be taken catering to the specific needs of those HHs. The establishment of the VBSP represents an attempt to broaden access in general. But it is questionable whether HHs that do not have access today, or do not demand the existing products, will demand loans from the VBSP. A more sustainable way to promote outreach would be to improve the knowledge of access constrained HHs about credit application procedures. Ethnic or gender diversification of bank staff could broaden the information networks available and could create more awareness of those groups inside the institution. In contrast to the enormous credit outreach, formal savings are rarely used by rural HHs. However, this low effective demand for savings is due to inappropriate services and not to lack of willingness of the rural population to save. Thus, the most appropriate tool to incorporate poorer HHs into the formal financial system would be mobilization of savings by providing adapted services.
Außerlandwirtschaftliche Diversifikation im Transformationsprozess. Diversifikationsentscheidungen und -strategien ländlicher Haushalte in Slowenien und Mazedonien
(2005) Möllers, Judith; Heidhues, Franz
Non-farm rural diversification is gaining prominence in the debate on rural development since the end of the 1990s. The expansion of non-farm employment and the diversification of incomes are important policy objectives because they offer a solution to the employment and structural problems of a shrinking agricultural sector. Development policies focusing on the rural non-farm sector aim at offering employment options and reducing urban migration. They can contribute to poverty reduction, economic growth and a more equal income distribution. This research is based on a household survey including 240 randomly selected rural households in Slovenia and Macedonia. Since empirically based insights on diversification dynamics in transition countries are hardly available, the objective of this research is to contribute to filling this gap. The analysis focuses on diversification strategies and determinants of the decision-making process of rural people in regard to non-farm employment. The methodology combines an inductive and deductive approach with qualitative and quantitative components. For the statistical analysis primarily logistic regression models are applied. The results show that rural households in the research area are highly dependent of non-farm incomes. As expected the poverty risk between the two countries differs: Rural household incomes in Macedonia are less equally distributed. Decomposed Gini-coefficients based on non-farm incomes point at their positive effect on the income distribution. The analysis of diversification strategies indicates that coping strategies as well as risk-minimising strategies prevail. Accumulation strategies, which point at demand-pull dynamics and entrepreneurship, are less common. Attitudes towards agriculture seem to influence diversification decisions in particular. While attitudes towards non-farm activities are predominantly positive, they vary towards agriculture. Negative attitudes towards agriculture are wide-spread among the younger generation. In the age group from 16 to 25 years the proportion of negative attitudes is high in both countries, but the share in Macedonia with 50% is twice as high as in Slovenia. Important constraints of diversification in Macedonia are the non-farm labour market, low wages, insecurity and late wage payments. In both countries capital and credit availability are named as the most important reasons for not starting a business in the non-farm sector. The pressure to adapt income strategies is lower in Slovenia in general. When looking at individual employment strategies it becomes apparent that in both countries there is a declining trend of agricultural and combined employment while non-farm employment alone is increasing. In Slovenia the high level of diversification at the household level is stabilising while the structural problems in the agricultural sector persist. In contrast, the level of diversification in Macedonia is expected to further increase even though the willingness to give up agricultural activities altogether is significantly higher than in Slovenia. A promotion of the rural non-farm sector is an important policy objective as non-farm employment has a positive impact on rural incomes, particularly in poorer households. The effect of non-farm incomes on the income distribution is positive. This underlines the importance of the non-farm sector as an essential component of a poverty-oriented rural development policy. In the long term rural development policies should aim at overcoming the unfavourable small-scale agricultural structure which is the main cause of distress-pushed diversification ? particularly if full-time employment in the non-farm sector is not available. For this it is essential to support education and knowledge-building, and to offer expert advice. The intention should be to enhance entrepreneurship, creativity and the willingness and ability to take economic risks. Furthermore, the success of any effort to improve rural development policies depends on locally developed strategies, since the heterogeneity of the non-farm sector calls for decentralised political concepts. With these prerequisites the non-farm sector will be able to absorb labour released from agriculture, and the necessary structural adjustment of the agricultural sector can take place.
Comparative advantage of Vietnam's rice sector under different liberalisation scenarios: a policy analysis matrix (PAM) study
(2004) Nguyen, Manh Hai; Heidhues, Franz
The rapidly changing global economic environment and domestic economic reforms in Viet-nam have brought the issue of comparative advantage of the rice sector to the forefront. In recent years, Vietnam has had to compete in an increasingly competitive rice export market. This paper examines the fluctuations in the comparative advantage of Vietnamese rice production based on different scenarios of trade liberalisation and economic reform in Viet-nam. To do this, a Policy Analysis Matrix (PAM) was used in conjunction with an econo-metric model. The study involved simulation of a large number of scenarios of trade liberalisation and macroeconomic reform, using variations in a single factor and in a group of factors such as product price and input costs, i.e., the price of imported fertilisers, land, water and labour costs, etc. The empirical results show that in 1998 (the baseline scenario), the comparative advantage in rice was relatively high and that the use of domestic resources ? i.e., land, labour and water ? was efficient in economic terms. The estimated DRC elasticities in respect of the world rice price and the shadow exchange rate in 1998 showed a considerably improved com-parative advantage. The estimated DRC elasticities for land rent, the social costs of labour, the import price of fertilisers and irrigation water charges were small in absolute values indi-cating small and negative impacts on comparative advantage with a rise in these prices. The results of sensitivity analyses revealed that the comparative advantage of rice is very sensitive to changes in its export price. In addition, the exchange rate and land rent are also important determinants of the rice sector?s comparative advantage in Vietnam. Other empirical results show that Vietnam is still likely to retain its comparative advantage in rice production in the next decade; however, its comparative advantage might be seriously affected or even dis-appear entirely if Vietnam is exposed to a number of unfavourable economic conditions simultaneously. The major recommendation of this paper is that production should be diversified, with appropriate agricultural policy support, within a broader framework of macroeconomic transformation and trade liberalisation.
Debt position of developing countries and new initiatives for debt reduction: a panel data fixed effects estimation of the impacts of the HIPC initiatives
(2005) Houssou, Nazaire; Heidhues, Franz
In September 1996, the World Bank and the International Monetary Fund launched the Heavily Indebted Poor Countries Initiative (HIPC). This initiative was endorsed by 180 governments around the world as an effective and welcome approach to help poor, severely indebted countries reduce debt as a part of the overall poverty reduction strategy. Three years later, the initiative was enhanced to provide for faster, broader and deeper debt relief. Using a panel data fixed effect estimation, this study assesses the achievements of the first and second HIPC initiatives and explores further areas of intervention that might help the HIPCs graduate from debt rescheduling and achieve sustainable growth and poverty alleviation. Despite moderate achievements of the HIPC measures so far, this paper argues in favour of a HIPC III initiative. Much more relief is needed to link debt reduction to poverty alleviation if the expectations raised by the HIPC initiatives are to become reality.
Land titling policy and soil conservation in the uplands of Northern Vietnam
(2008) Dung, Pham Thi My; Saint-Macary, Camille; Keil, Alwin; Zeller, Manfred; Heidhues, Franz
In Vietnam, a quasi private property regime has been established in 1993 with the issuance of exchangeable and mortgageable long term land use right certificates. Using primary qualitative and quantitative data collected in a mountainous district of Northern Vietnam, this paper investigates the role of the land policy in the adoption of soil conservation technologies by farmers. This issue is of crucial importance in the region where population growth and growing market demands have induced farmers to intensify agricultural production. While poverty has been reduced, environmental problems such as soil erosion, landslides, and declining soil fertility have become more severe over the past years. Among the abundant literature on the impact of property rights and formal land titles in developing countries, only a few studies have focused on the adoption of soil conservation technologies: an important element in sustainable development strategies of fragile agro-ecological areas confronted with increasing population densities. Our findings suggest that soil conservation technologies are perceived as being economically unattractive; therefore, most upland farmers continue to practice the prevailing erosion-prone cultivation system. Focusing on agroforestry as one major soil conservation option, we estimate household and plot level econometric models to empirically assess the determinants of adoption. We find that the possession of a formal land title influences adoption, but that the threat of land re-allocations in villages discourages adoption by creating uncertainty and tenure insecurity. We conclude that more efforts are needed from decision-makers to promote and support the adoption of conservation practices and to clarify objectives of the land policy in order to secure land tenure and foster sustainable development in fragile areas.
Linkages between poverty and sustainable agricultural and rural development in the uplands of Southeast Asia
(2008) Zeller, Manfred; Beuchelt, Tina; Fischer, Isabel; Heidhues, Franz
Most of the upland areas of Southeast Asia are characterized by insufficient infrastructure, low productivity in smallholder crop and animal production, mounting environmental problems such as soil and forest degradation and loss of biodiversity, increasing population pressure, and widespread poverty, particular in rural areas. While some upland areas in South East Asia have been experiencing considerable progress during the past twenty years, others have stagnated or even declined with respect to economic, social and environmental objectives of development. The purpose of the paper is to describe major trends regarding sustainable development in the upland areas of selected countries in South East Asia, and review explanatory approaches for the observed trends based on case studies from Cambodia, Laos, Thailand, Vietnam, and Indonesia. The conceptual framework for this paper builds on the critical triangle of sustainable rural development. Here, equity or poverty alleviation, economic growth, and the protection of the environment are the three major policy objectives. We further distinguish three explanatory approaches for land use change and agricultural and rural development. Apart from the market approach and the population approach, we suggest that future studies should focus more on governance issues as a major driving force of land use change. The governance approach appears particularly relevant for upland areas which are often politically and institutionally marginalized. The paper begins with a review of definitions of sustainability, and proceeds with a conceptual analysis of the two-way linkages between poverty and the environment, and poverty and economic growth in rural areas. This is followed by empirical findings from research on agriculture and forestry as the major land uses in upland areas of selected South East Asian countries. Based on the results of different case studies from Cambodia, Laos, Vietnam and Indonesia, we seek to contrast stories of relative success with those of failure. The paper concludes with implications for rural and agricultural development policies, and suggests future areas of research.
Mikrofinanzierung, Armutsbekämpfung und ländliche Entwicklung in Westafrika : Wirkungsanalysen in Côte d'Ivoire und Niger
(2008) Schäfer, Birgit; Heidhues, Franz
The aim of the study was to take a critical look at the impact of microfinance as a free market development instrument in terms of sustainable poverty reduction at the target-group level in rural areas of West Africa. On the basis of empirical surveys carried out in two microfinance projects supported by the GTZ, the ?Associations Féminines d?Epargne et de Crédit? (AFECs) in Côte d'Ivoire and the ?Mutuelles d?Epargne et Crédit? (MUTECs) in Niger, the strengths and limitations of microfinance in terms of structural poverty reduction were assessed and recommendations for action were drawn up for implementing the concept in the development cooperation context. The understanding of poverty is based on the idea of human capabilities put forward by Armatya Sen in conjunction with the concept of social vulnerability and the life dimensions approach of the UNDP. Sustainable poverty reduction means extending the scope of action and freedom of poor people to use and transform the set of material and immaterial resources available to them so as to increase their productive capacity and enhance their choices, with a view to improving their well-being as they see it. This study is intended to provide a conceptual framework enabling researchers, practitioners and politicians to carry out structured impact assessment of microfinance projects. By enabling more realistic estimation of the effectiveness of microfinance for poor target groups in rural regions in the countries of sub-Saharan Africa, it is also intended to provide a decision-making aid for planning and designing microfinance projects.
Möglichkeiten und Grenzen der Sekundärwalderhaltung im Bundesstaat Sucre, Venezuela - Brachewirtschaft, Agroforstsysteme und forstliche Nutzung in der kleinbäuerlichen Landwirtschaft -
(2003) Valqui Haase, Alexis Holger; Heidhues, Franz
Half a billion people are considered as direct actors of tropical deforestation. Especially those, who live in the tropics in forest areas or nearby forests as peasants and landless people. They use and destroy the tropical forests by trying to secure the subsistence of their families. This study analysis the leading socio-economic and legal factors of the use and destruction of forest ecosystems in the small scale agriculture of the Paria Region, in the State Sucre, Venezuela. In the Paria Region the small scale agricultural systems secure their subsistence especially trough the cultivation of agricultural products in fallow systems and agroforestry systems. Following questions are treated: In which way does the agrarian reform law and the local land tenure as well as the forest law and the forest politics influence the protection of forests by peasants? How does the landuse systems contribute to the income and subsistence assurance of peasant families as well as to deforestation? Which functions does the forests fulfil from the point of view of the peasants and what benefit could they realise from the forests? A quantitative and qualitative approach was chosen. Standardised survey as well as econometric and statistical data analysis methods, like Cluster analysis and logistical regression, are combined with semistructured interviews and qualitative analysis methods. Conclusions: Forests are seen in the agrarian reform law as well as at community level primarily as a reserve for agricultural land. The "agrarian occupation" which follows the principle, land is owned by them who use it, is an instrument to avoid land concentration. But in countries like Venezuela it has also deforestation as consequence, where forests are seen as land that is not in use. The fact that forests are seen as land that is not in use or even useless land is reinforced by the restriction which peasants are confronted with, due to the forest law and it's implementation, when they wanted to use the forests for income generation. Also the function of the forests as supplier of subsistence goods for the families is loosing importance because of the substitution of this goods by industrial ones. This restriction and development has the consequence that peasants become more and more "disinterested forests managers". The comparison of the fallow systems and agroforestry systems of the Paria Region shows that agroforestry systems are relative better from the view of income generation and forests conservation. They have a lower land productivity, but they have a relative high work productivity and generated better distributed income. On the other side they are less forest destructive. In most of the cases they can be even seen as secondary forests.
Regional development perspectives in Vietnam: insights from a 2002 provincial social accounting matrix (SAM)
(2004) Heidhues, Franz; Breisinger, Clemens
Growing regional disparities in Vietnam have encouraged plans to extend the national Comprehensive Poverty Reduction and Growth Strategies (CPRGS) to the provincial level. The northern mountainous province of Son La has distinctive development perspectives. It was selected as the site of Vietnam?s planned biggest dam and hydroelectric power plant. Large-scale infrastructure investments are expected to contribute to economic growth and poverty reduction in the region. The impacts of these investments on the regional economy can be assessed with a multiplier model based on a regional social accounting matrix (SAM). In this paper, we present a 2002 SAM for Son La. To shed light on the socioeconomic situation, we review insights from this detailed database. A SAM-based multiplier model is then put forward to examine linkages within the provincial economy and to present first results of demand-side effects of infrastructure investment in the local construction sector.
Rural financial markets under transformation : a study on credit supply and demand in Romania's private farm sector
(2003) Breitschopf, Barbara; Heidhues, Franz
The study analyses the credit supply and demand of farms in the rural area of Romania. A qualitative analysis describes and outlines the problems and bottelnecks the financial and agricultural sector are facing during the transformation period. A detailed quantitative analysis gives the credit supply and demand. Based on a multiple non-linear regression the demand function is derived. Taking into account the special situation in transition countries, the collateral requirements and its evaluation process, the price and market uncertainties as well as the orientation of the farm household on utility maximization, results in different capital demand structures. The credit supply of the financial institution with variing transactions costs is derived from a partial profit function. The results show, that a strong focus of the financial institutions on collateral prevents a matching of credit supply and demand since the farm households are not willing to provide collateral when their total assets are rather limited. A higher screening effort of the banks increases transaction cost but also reduces the default risk.
Sozio-ökonomische Beurteilung von Innovationen: Untersuchungen über die Innovationenakzeptanz auf Betriebs-Haushaltsebene in Niger
(2004) Haigis, Jörg; Heidhues, Franz
The presented research study deals with the question, which socio- economic and personal characteristics of the heads of household as the main decision persons within the nigerian farm-household-systems influence significantly their adoption behaviour. Simultaneous innovation adoption of thirteen selected different new technologies were in the focus of the study. The study emphasizes especially the time of the adoption state, which could be observed for all considered innovations by all investigated heads of household at a certain reference point of time. The reference point of time is the year 1995. The analysis of the selected farm-household-systems produced an erratic use for most of the thirteen considered innovations over time until first adoption. Simultaneously the adoption behaviour of the household chiefs show a distinct regional emphasis in terms of the adopted technology type. These emphasis merely reflect rudimentary the climatical site conditions in the republic of Niger. They correspond only apparently the climate gradient of the research sites. At drier sites there the households favour particularly resource saving innovations, for which an internal input availability exist. In contrast the farmers put their emphasis on the adoption of labour-saving technologies at the climatical favourable sites. With a closer look there are less the climatical conditions which influence this behaviour than local particularities, especially within the farm-household-systems. Above all this particularities are the limited access of agricultural active women to use the household labour force for the work on their fields. Exclusively women cultivate groundnuts in this region. Thereby the groundnut cultivation is the main activity within the crop production. Groundnut production is predominantly for the women a profitable business through processing. Because of these circumstances in this region exist a well funded demand for wage labour to prepare groundnut fields with animal-drawn implements. The temporal discontinuity of an adopted innovation is found especially for external and yearly obtainable inputs. Accordingly the cumulative behaviour of each household chief show a variable mixture of actual, former and never occurred adoption. Five adopter groups can be found within this complex appearing behaviour situation with the help of cluster analysis methods. The group-specific adoption behaviour rises in an order from low until especially innovative. Except of the low innovative household chiefs, each adopter group show a significant technological emphasis in terms of the type of adopted technologies. This emphasis coincide with the regional one. The order of the adoption behaviour does not correspond with the climate gradient. Neither a comparison of the identified adopter groups with variance analysis nor the econometric analysis using a multi-nomial logit-model resulted in a clear finding that personal or socio-economic characteristics of the household chief influence significantly their adoption behaviour. In fact the results of the logistic regression confirm a high dependency from the location for the observable adoption behaviour. The distinct regional division between high and special innovative household heads on the one side opposite to all others indicates a significant influence on the individual adoption behaviour by local and regional factors. But the question could not be resolved in the context of this farm-household-system based study, wherein these factors are in detail. The adoption of technological innovations shows not only a distinct regional emphasis and a partly temporal discontinuity but also it is characterised by an adaptation in terms of the spatial use of adopted technologies. The farmers cultivate their fields not homogeneously over the whole field area. Rather they apply a kind of site-specific cul¬tivation. In doing so they adapt each cropping measure to the site conditions changing on a small-scale within in a field. This spatial adaptation includes also the adopted innovations. The observable adoption behaviour of the household chiefs points up the basic willingness to use new technologies and with it the change of the previous traditional cropping methods. The identified particularities of the innovation adoption confirm on the one hand the significant adaptation ability of the farmers to the particular local and temporal conditions. On the other hand these particularities are an indication of the inadequate adaptation of the recommended innovations. As a result the success of further efforts to modernise the nigerian agricultural farms depends greatly from the stronger consideration of these particularities in the future development and diffusion of new technologies.
Vulnerability and Risk Management for Sustainable Livelihoods of Farm Households in Northern Thailand-
(2007) Sricharoen, Thitiwan; Heidhues, Franz
This research attempts to explain the relationship between poverty, livelihood difficulties, risk and risk management and vulnerability to poverty of farm households in Northern Thailand. Furthermore, this study proposes a health insurance concept addressing risks and poverty of farm households. In line with the objective was to analyse risk and risk management strategies of vulnerable rural households in Northern Thailand. Firstly, the result of a principal component analysis (PCA) was utilized to determine the important factors affecting household poverty. Furthermore, a poverty index was developed. The PCA retained 16 out of 65 possible poverty determining variables. Six of the 16 variables relate to the human resource factor: (1) percentage of adults who can write, (2) percentage of adults who completed primary school, (3) percentage of adults with non-farm occupation, (4) number of children, (5) percentage of unemployed to employed, and (6) family size. There are two variables that relate to food security and which were significant: (7) crop yield and (8) value of main crop yield. Four variables relating to the dwelling show a high correlation to poverty. These are the (9) housing condition, (10) quality of latrine, (11) water system, and (12) furniture. Four variables related to assets: (13) value of transportation assets, (14) farmland owned, (15) value of assets per adult equivalent, and (16) value of agricultural assets. The explicit factors relevant for assessing poverty are the dwelling conditions, assets, human resources, and food security, respectively. The factor which can lead the poor to become even poorer is the human resource factor, where e.g. the number of dependents is comprised. Secondly, results of the PRA showed that the most pressing problem plaguing households is their debt. Households try to honor their debt repayment obligations, but it appears that the frequent occurrence of income shocks and their low risk management capacities prevent them from doing so. Land issues relate to the second most important problem area. Often, farm households lack sufficient land and have land certificate problems. Another pressing problem negatively influencing households? livelihoods are droughts, which lead to water shortages, higher fertilizer prices and middleman problems. The results of the PRA provided an overview of all livelihood problems; they concentrated on livelihood shocks related to idiosyncratic and covariate risks. One idiosyncratic risk of main importance is poor health. Thirdly, results of the risk and risk management analysis found that there are five major types of risks frequently encountered in rural areas: 1) Natural risks (fire, heavy rainfall, heavy wind, damage to house, and drought); 2) Theft risks (theft of livestock, crop and consumer goods); 3) Production risks (crop loss from weather, crop loss from insects, storage loss, low production prices, low production, higher factor price, death of chickens); 4) Life-cycle risks/human risks (birth of children, funeral costs, unemployment, sudden moving away of working family member, old age, death of working member, son is placed in jail, risks of being cheated); 5) Health risks (prolonged sickness, chronic disease, working disability, alcohol problems of head of household and other family member). Fourthly, respondents reported that the burden of health expenses became lower after they had signed up for health insurance. However, 42% of the respondents stated that the health expenses still represented a relatively high burden to their household budget. The respondents were asked about their first choice of treatment when falling ill. The first choice for medical treatment service that households selected was the local health unit because of its proximity to the villagers. The next choice was the state hospital because there were more complete medical instruments than the local health unit; households went there when they became severely ill. The third choice was purchasing medicine from the pharmacy because the price of medicine was cheaper in comparison to traveling to consult a doctor at state hospital. Fifthly, conjoint analysis on health insurance aims to provide concepts for new, alternative health insurance products to support the exiting health insurance system in Thailand, and to help the government reduce health support costs. The analysis will be particularly useful when compared to the governmental health policy that already provides 30 Baht Health Insurance Cards to the rural poor. The households were asked which types of social security services they presently have. The 30 Baht Health Insurance is the most popular, with 88% of households participating in it. Others social security services in the region are the old age health insurance card and others account for the remainder. However, the public hospital was selected most when a household member was severely sick, with 77% respondents. Some gave the reason that the hospital provides full medical treatment and is ready in the case of an emergency operation. Finally, the study examines the linkage between poverty and vulnerability to poverty by the classification of a vulnerable group of farm households, and proposes an empirical measure that allows the setting of a vulnerability to poverty by applying Thailand?s poverty line as a benchmark. The results demonstrated that while 42% of the populations in the study area were poor in 2003, the majority of these are chronically poor (11% of the population). The information further shows that almost one-third of the population is transitorily poor i.e., 30.5% of the total population. This is dominated by a low expected mean consumption (LM vulnerability- the low expected mean consumption) accounting for 31% of total vulnerability (or 13.5% of the total population) and almost one-third was accounted for by high volatility of consumption (or 30% of the total population).
Vulnerability and risk management of rural farm households in Northern Vietnam
(2010) Fischer, Isabel; Heidhues, Franz
Despite the achievements of the ?doi moi? reform process, which was launched in 1986, Vietnam is still one of the poorest countries in the world, with 28.9 per cent of the total population (85 million in 2007) living below the national poverty line (UNDP 2007). Especially the mountainous, rural areas of Northern Vietnam are underdeveloped. Poor and near-poor farm households endure manifold risks and income shocks, which threaten their existence. Normally, insurance systems would step in to assist. In developing countries however, where access to formal insurance services is hardly available, rural farm households have developed alternative risk management strategies. The Sustainable Livelihood Framework (SLF) of the Department for International Development (DFID 1999), was applied as an analytical tool to identify and assess risks and risk management strategies of vulnerable rural livelihoods in the Uplands of Northern Vietnam. The role of informal social networks was analyzed with the help of Social Network Analysis (SNA). An Adaptative Conjoint Analysis (ACA) was implemented to examine the potential demand for a formal or semi-formal microinsurance scheme in the area of livestock insurance. Furthermore, additional insights were gained from interdisciplinary research on issues of human, health and livelihood security, as well as from case studies on natural resource use in Southeast Asia. The central hypotheses of this research on livelihood strategies in general and adaptive strategies such as insurance in particular are that they (1) have the potential to reduce livelihood vulnerability and that (2) the differentiated knowledge of livelihood strategies is crucial for a better understanding of the reasoning behind the exploitation of livelihood assets, such as natural resources or physical assets in the form of livestock, despite the negative medium and long-term effects. Research results lead to the following conclusions: First of all, only a very elaborate use of existing capital assets can improve the livelihood situation of vulnerable households in Northern Vietnam. Living in remote mountainous regions with scarce natural resources and limited access to other assets, the preconditions are rather difficult for ethnic minority people, even more for women. Secondly, in order to improve the situation, all stakeholders have to be aware of the existing risk management strategies (e.g. raising livestock and selling it in case of a livelihood emergency is one of the most popular risk coping strategies in the mountainous regions of Northern Vietnam) and learn from both, advantages and disadvantages of currently applied strategies to translate them into effective policies. Concerning the access to financial services, people still face several constraints, as credits are often not available for certain activities or at a certain point in time. In addition, savings and insurance services, when available are not adapted to the needs. Furthermore, emerging expenditures for livelihood risks usually go beyond the scope of the dis-saving (in cash and in kind) ability of rural households. Taking into consideration the above stated situation of changing agricultural activities, including higher input use, and the resulting decline in the number of large ruminants, one should be very careful not to destroy the so far still functioning traditional social networks. Even though these networks are not able to fully buffer all shocks and crises, they are at least one asset (social capital asset) that is initially accessible by everybody and quite often a means to compensate to some degree the lack of other capital assets as depicted in the SLF. Research results point to a number of policy issues that need to be addressed if household?s vulnerability to poverty is to be significantly reduced among ethnic minority households in Northern Vietnam. First of all, poverty reduction strategies and programs need to consider a broader target group, not only the currently poor but also the vulnerable households. The promotion of innovative financial products, such as a combination of credit and insurance, especially for loans that are taken up to purchase livestock, is considered a successful approach to support vulnerable households. Finally, it is assumed that an efficient and accessible health care system would be an important alternative for securing livelihoods. In addition, im¬pro¬ved extension services and knowledge transfer for all people, especially women, could sup¬port a sustainable future development of ethnic minority households and therefore, in the long-run, lead to poverty alleviation.