Vietnam has been internationally recognized as a success story in the fight against poverty and the proportion of the population living in poverty reduced from 53% in 1993 to 19.6% by the end of 2006. However, its economy has become highly dependent on exports (which account for 65% of GDP) leaving it especially susceptible to the global downturn. 

Many of the world’s premium shoe manufacturers who are now subcontracting to Vietnamese factories. (Sao Vang She Company, where Lanh works, acts as a sub-contracted factory and produces shoes for Timberland, Prada, Mango and Clarks amongst other.) 

Since 1945, Vietnam has established a constitutional and legal framework for gender equality and currently 25% of National Assembly deputies are women and women play a crucial role in the economy of Vietnam, making up 65% of the agricultural, 43% of the industrial and 70% of the informal labor force.

The shoe, garment and textile industries together employ 2 million workers.  Around 80 percent of the workforce are women and conditions are often harsh. It is not uncommon for them to work 13 hour days for their $1 or $2 daily wage.

As the global downturn began to squeeze consumers’ pockets overseas, export revenues fell – by 24% in January 2009. Unemployment is rising fast and the Footwear Producers Association claims that 20 percent of workers face retrenchment.

The government has introduced a stimulus package to help the country through the recession. However, of the first $1 billion distributed, about 75% has gone to State Owned Enterprises (SOEs), 20% for small and medium enterprises, and 5% for housing projects for low-income earners. The second stimulus package underway will also largely benefit SOEs. Unfortunately support to SOEs will do little to address unemployment.

Returning to the countryside is not much of an option for those who lose their jobs in the city.  Rural employment opportunities have dwindled in the past 20 years. At least 80% of rural population was unemployed between 1996 and 2005 and growing demand for land for industrial, residential, tourist and leisure activities has reduced the amount of land available for farming.

The Vietnamese are also suffering from escalating food costs and the number of households going hungry had doubled compared to the previous year.  The price of rice has risen by almost two thirds since early 2007.  Before food prices started to spiral in 2008, workers’ salaries were just about enough to get by and send something home to the family. That is no longer the case.

According to estimates by Nike, direct salary expenses account for only 10 per cent of the unit price of sportswear, including trainers.  A 10 per cent raise in wages would increase the price of a typical sports shoe by 5p - 10p, according to estimates by the Play Fair Foundation but could make all the difference to a worker like Lanh.