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HANOI: On the outskirts of Vietnam’s capital, where modern
industrial parks eat into centuries-old rice paddies, farmer’s
daughter Le Thi Luyen is struggling to carve out a living with a
factory job.
Like thousands of laborers here, the 22-year-old
walks every day from her dormitory town along a sun-baked dirt track
to the nearby manufacturing zone, where she earns about 60 dollars a
month at a motorcycle parts plant.
Life was never very easy, Luyen says, squatting
in the three-by-four meter (13-by-10 foot) room she shares with
three other workers and her daughter in Kim Chung commune just north
of Hanoi.
But things have got a whole lot harder in recent
months, she says, as the surge in global food prices swept through
Vietnam, driving inflation to 21 percent in April compared to a year
earlier.
“Food prices have increased sharply, and the
money we earn just isn’t enough anymore,” Luyen says. “Two
months ago we paid about 8,000 dong ($.50) for a kilogramme of rice.
Now it’s about 16,000 dong.”
Food prices, which take the largest chunk out of
the paypackets of most Vietnamese, surged by 38 percent year-on-year
in April.
“In the past, I could save a few hundred
thousand dong a month, but now I can spare nothing,” says Luyen.
“I have to spend all my money on everyday goods. The money isn’t
enough, but we don’t have many options.”
Like many of the workers who have driven
Vietnam’s economic boom—with annual growth rates topping seven
percent for the past decade—Luyen came from the countryside to the
city in search of a better life.
“My family are farmers,” said Luyen, from
nearby Ha Tay province.
“We have grown rice for many years, but
recently bad weather has harmed our crops and we have had to pay
more for fertilizers and pesticides.
“Soon an industrial park will be built on our
land, so we have to try to find other ways to make a living.”
Luyen’s story echoes those of millions across
Vietnam and much of Southeast Asia and helps explain some of the
causes and consequences of the current global grain price crisis,
say experts.
Hanoi, like many Asian cities, emerged in a
river delta, where about 1,000 years ago people began to harness the
Red River with dykes and irrigation channels to grow rice.
“Today, as Asian cities expand, the rice area
contracts,” said Jonathan Pincus, chief economist of the UN
Development Programme in Vietnam. “Asia is now going through an
historic period of economic growth, of industrialization.
“There is land coming out of production in
Asia. Some of that land is going into residential, some of that land
is going into industrial. It’s not marginal land, it’s some of
the most irrigated rice land in Asia.
“That’s a factor in Vietnam, China,
Indonesia and Thailand.”
High food prices “a struggle, particularly for
poor people”
Vietnam’s Agriculture Minister Cao Duc Phat
warned in March that more than 500,000 hectares (1.2 million acres)
of farmland had been converted into urban areas or factory zones
between 2001-2007.
“In five years, the loss is expected to equal
current rice exports,” state media quoted him as saying. “It
means that we will no longer have extra rice for export and, in the
long term, the country’s food security will be threatened.”
It’s not just the loss of rice land that has
driven up prices, said Pincus. The other main “economic
inputs”—fuel, labour and fertilizer, which is closely linked to
energy prices—have also grown more expensive, he said.
The result has been an 80 percent surge in
global rice prices so far this year, a trend accelerated by
commodity traders who have hoarded stocks to further drive up
prices.
Vietnam may be the world’s second-largest rice
exporter, but this hasn’t stopped prices surging on local markets,
sparking a recent bout of panic-buying as families feared running
out.
Galloping inflation, driven in large part by
food and fuel prices, has become the communist government’s number
one problem, leading to export curbs and warnings of stiff
punishments for rice speculators.
The soaring cost of living—fuelled further by
livestock diseases such as bird flu and blue-ear pig fever—has
already triggered labour unrest, with dozens of strikes hitting
plants early this year.
In the year’s first 20 days, more than 25,000
workers walked off the job in nearly 40 strikes, the Saigon Times
reported. One thousand workers walked out at Chung Shing Textile
Limited in southern Long An province on May 2, demanding better
wages and meals.
“One of my friends, who works in a plastics
plant, went on stike recently, because wages were too low and they
had to work extra hours,” said Luyen’s dormitory neighbour,
26-year-old Nguyen Thi Hue.
“They raised wages a little, but they still
don’t match the high prices.”
The UNDP’s Pincus said that while food riots
are unlikely in Vietnam, a food-surplus country, more labour unrest
is almost certain.
“It is a struggle, particularly for poor
people, to pay these higher prices for food,” he said.
“Labour unrest has certainly picked up and
wage demands are coming in higher, and companies that don’t want
to meet those wage demands will find that workers will down tools
and walk out.”
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