Viet Nam's development success especially in expanding food production, and moving from a rice deficit country to the world's second largest rice exporter is attributed to (i) the allocation of land to individual farmers and households, (ii) rationalizing and reducing the role of the state in the sector; (iii) strengthening technical and operational capacity of state and non-state stakeholders; and (iv) increased investments and access to markets. Viet Nam's forestry sector has the necessary policies, laws, and sector strategies in place for replicating the successful experience of agriculture sector. But weak institutional, technical, and human resource capacity is a barrier to transitioning to a pro-poor and market oriented governance and incentive regime. Consequently, even in the Central Highlands, which has the highest potential for forest-based economic development and poverty reduction in the country, the sector is in serious decline largely due to resource over-exploitation. A key factor for the poor performance is the uncertainty over forest "ownership", management, and use rights and roles.
Government's Forest Development Strategy (2001-2010) and sector plans call for making forestry an important economic sector by (i) protecting and developing forest resources and increasing forest cover from 32 to 43% by 2010; (ii) achieving an annual growth rate of over 3.5% during 2006-2010 period, (iii) accelerating and completing forest land allocation; (iv) using forestry to improve livelihoods and reduce poverty in mountainous and ethnic minority dominated areas; and (iv) increasing efficiency and value of country's wood processing industry. The Government's policy is to restrict the state's role to forest and biodiversity protection, and let the non-state sector dominate the production forestry sub-sector.
The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) emphasizes the need to focus on the disadvantaged rural areas that have high proportions of ethnic minorities. It is in these areas where most of the remaining forest still occurs, and the CPRGS recognizes this. It calls for investment of $600-800 million or about 12% of the agriculture sector investment over five years.
The Central Highlands is Viet Nam's most important forestry region contributing more than 60% of the country's annual hardwood production. And ecological conditions and terrain is suitable for sustainable forestry with population densities still relatively low compared to country's other regions. Improving road network is increasing access to national and regional markets, and incremental wood production from the Project will reduce the raw material supply shortages faced by the local processing enterprises. Project interventions have the potential to secure over 90% of Viet Nam's 2010-2015 domestic timber needs. Accordingly, draft 2006-2010 Socio Economic Development Plan (SEDP) identifies Central Highland as a priority forestry region.
Central Highlands, home to over 5 million people, is the second poorest region in the country with poverty rates as high as 57% among the ethnic minorities. Over 2.5 million people are in work force, but only about 11% are in wage earning occupations. Therefore, unemployment is high. Because they have forestry relevant skills and knowledge, engaging these communities in forestry will lead to improved forests, forestry, and livelihoods.
The Project is linked to the following:
1. The Government's Forest Development Strategy (2001-2010) and sector plans which call for making forestry an important economic sector by (i) protecting and developing forest resources and increasing forest cover from 32% to 43% by 2010, (ii) achieving an annual growth rate of over 3.5% during 2006?2010, (iii) accelerating and completing forestland allocation under the Land Law and the revised Forest Protection and Development Law, (iv) using forestry to improve livelihoods and reduce poverty in mountainous areas dominated by ethnic minorities, and (iv) increasing the efficiency and value of the country?s wood-processing industry.
2. The comprehensive poverty reduction and growth strategy (CPRGS) emphasizes the need to focus on the disadvantaged rural areas with high proportions of ethnic minorities, such as the Central Highlands, where minorities dominate. These areas are where most of the remaining forest survives, and the CPRGS recognizes this.
3. The draft 2006-2010 socioeconomic development plan identifies the Central Highlands as a priority forestry region.