March 2, 1999

REGIONAL SYMPOSIUM ON INDOCHINA

For more information, contact: Don Lippincott (1-202-862-5670), or David Gately (1-202-862-5679)

Hanoi

The world is currently grappling to understand whether the financial crises spurting up around the world are mainly "Asian" in origin, or as some would argue, a truly global phenomenon. In this volatile context, the International Food Policy Research Institute (IFPRI) and the Vietnamese Ministry of Agriculture and Rural Development (MARD) have just completed a joint symposium that focused primarily on the all-important agriculture sectors in Indochina. Drawing on recognized experts from within their own organizations, other international entities, and counterparts from Cambodia, Laos, Myanmar, and Thailand, they shared experiences and information about topics ranging from market reforms and rice markets to poverty reduction, food security and nutrition, agricultural diversification and industrialization, and water management. As IFPRI director general Per Pinstrup-Andersen indicated: "We really wanted to understand the particular situations each country in the region is facing and, more importantly, to facilitate discussions about how they can benefit from globalization."

What makes this situation more daunting is the fact that developing countries the world over are approaching the new millennium having to compete directly with international market forces. As such, countries with underdeveloped markets will fall behind unless they liberalize domestic and international trade, develop markets, and harness comparative advantages through proactive government policies. The transition economies of the Greater Mekong subregion, namely China, Vietnam, Laos, Cambodia, and Myanmar, have indeed made significant progress in liberalizing markets that in turn have doubled growth rates in agriculture and the overall economy. This remarkable achievement is the result of bottom-up, step-by-step reforms of their broad economic policies - which in fact differ sharply from the types of reform taking place in much of the rest of the world.

With respect to Vietnam specifically, IFPRI and MARD have worked together in recent years to promote market reforms, conduct poverty mapping, and development of the food processing industry, among other endeavors, and this symposium demonstrated the need for ongoing joint activities. IFPRI's mandate is to identify and analyze policies for sustainably meeting the food needs of the poor in developing countries and to disseminate the results of the research to policymakers and others concerned with food and agricultural policy. For his part, the director of the Department of Agriculture Policy and Rural Development at MARD, Cao Duc Phat, cited the lack of arable land, the need for improved infrastructure, underemployment and poverty, and environmental degradation as critical issues that are facing Vietnam. He also emphasized that Vietnam's membership in ASEAN, APEC, and its application to join the World Trade Organization pose both an opportunity and a challenge to be as competetive as possible.

Despite the successes achieved so far by the transition economies of East Asia, there is still a long way to go, especially since market liberalization is not yet complete. In fact, these countries have reached a critical juncture in that failure to make additional necessary reforms would mean significant economic backsliding. For example, with respect to rice production, these countries will need to use technology to enhance rice yields, promote human development through research and training, and develop policy environments that more effectively integrate their domestic and international markets. Sustained growth in rice productivity will be the precondition to effective agricultural diversification. Otherwise, a trade-off between food security and commercial agriculture will constrain the capacity of small rural households to respond to the incentives provided by more favorable price incentives.

More broadly, emphasis on rural development, and agricultural growth in particular, is essential to stable growth in the region, primarily because more than 80% of the population reside in rural areas and because the urban sector cannot absorb them into productive employment in the medium term. As research fellow Mark Rosegrant of IFPRI stated at the symposium: "Other countries in the region achieved lasting reductions in poverty by promoting rapid growth of agriculture; investment in human capital, in particular, access to health and education; and development of labor-intensive enterprises off the farm. These are important lessons for the transition economies."

In addition, since most poverty in the region arises from low productivity of agricultural labor, agricultural growth and agro-food industries could be an effective means to generate productive activities such as processing, trade, transportation, and construction. IFPRI research fellow Francesco Goletti offered the following perspective at the conference, "it will be essential to promote the development of small- and medium-size industries so that the many vital, thriving household microenterprises can graduate into larger entitities linked to urban and international markets."

Water is another critical area of future focus for these countries, and cooperation in the Mekong Basin will become increasingly important as water becomes more scarce and trade-offs between development and the environment become more sharply defined. National policy reforms will be essential to ensure the capability to forestall potential conflicts and must include a basin approach to management, integration of currently fragmented water management, and devolution of secure water rights to users.

The conference concluded with the distinct message that, although the region has progressed dramatically, there is clearly much work yet to be done, and important opportunities for collaboration in a number of key areas in the agriculture sector.

IFPRI's 2020 Vision for Food, Agriculture, and the Environment was launched in 1994 to develop and promote a vision and an action plan for eradicating hunger and malnutrition while protecting the environment. This initiative brings together researchers, policymakers, and representatives of international organizations and media to examine the challenges to meeting the world's food needs sustainably and to propose solutions.