Through our activity in the bamboo sector, our goal is to move hundreds of thousands of people out of poverty in the Mekong region by 2020. Our initial target is 250,000 out of poverty in the industrial bamboo market systems of NW Viet Nam and Northern Lao PDR.

The bamboo industry is emerging as a global opportunity for poor people. In recent years, China has transformed its own bamboo industry from a sector that produces traditional products like chopsticks and handicrafts for domestic markets into one producing high value globally competitive timber substitute products. These new market segments are very competitive, growing quickly and create a huge impact for upland farmers growing bamboo.

In Viet Nam, there are realistic opportunities for the local industry to harness its significant bamboo resource asset base. Viet Nam has an improving business environment and large workforce to adopt the lessons from the Chinese government and industry. It's in a good position to develop a competitive industry capturing additional 100,000s USD of value, much of it going to producers of bamboo. Opportunities for Cambodia and Lao PDR are also strong and can be achieved through strategies that enable supply chain linkages that make the most of neighbouring raw and semi-processed demand. Local domestic demand for traditional products in all three countries should also not be forgotten. It can serve as an important strategy for developing future export capacity in new bamboo products.

The growth of the industry is founded on smallholder production of raw bamboo with linkages to various forms of production and process. A potential transformation presents an achievable opportunity to dramatically raise the incomes of bamboo farmers and workers and lift hundreds of thousands of people sustainably out of poverty across the sub-region.

How?
The industry has 3 distinct sub-sectors, each of which creates impact in different ways:

• Industrial processing - impact here is based on the fact that around 60% of total subsector output is raw material cost. $1M of finished products puts $600,000 into the pockets of bamboo farmers. Growing the sector volume (by creating a competitive industry) creates large impacts on poor farmers. Farmers must own the bamboo for this to happen, and Viet Nam has managed this through land reform. Lao PDR is on this track also. Prosperity Initiative's work to improve the industry and raise the raw bamboo price will lift 100,000s out of poverty in upland Viet Nam and Lao PDR.
• Handicrafts - the impact here is through labour and productivity since up to 70% of sector output is in labour cost. Again, an industry that creates efficiency that grows the sector can greatly increase income. In Viet Nam, the subsector faces a challenge as wage growth is driven by other opportunities in the labour market, but there remains considerable opportunity to link scaled up village enterprise and production into global markets. In Lao PDR and Cambodia, the labour market competition is less, and there are real opportunities to increase household income through improvements in production techniques in household enterprises and market channels. A full-time job in the industry is enough to lift a household out of poverty in Viet Nam and can make an important contribution in Cambodia and Lao PDR, where wages are lower.
• Edible shoots - the impact here is the same as that of industrial bamboo, i.e. poor farmer income. There is a very small and relatively disorganized shoots subsector in each of the three countries. By setting up production at scale, i.e. large numbers of producers in a single area and processors preparing for domestic and export market, impact in the tens of thousands (up to 100,000 in the region) is possible. It will require cooperation from the government and major investors/buyers that Prosperity Initiative is presently facilitating. Again, farmer ownership is critical. Less than 1/3ha of shoots production is enough to lift the typical family in the region out of poverty.

Around the Mekong region, the local industries in each of these sub sectors are at very different stages of development. Thus, Prosperity Initiative has specific priorities for achieving poverty impact in each of the location/region specific subsector market systems:

• Targeted activity in distinct geographical sub-sectors (e.g. industrial processing in northern Viet Nam) that grows the industry and increases the amount of money earned by poor bamboo farmers and workers. The primary tactics are to increase the productivity and value-added in the industry (i.e. return on material and/or labour), thus creating additional income that can stimulate industry growth, provide incentives to improve the industry structure and thereby create opportunities for higher incomes to poor farmers and workers.
• Increasing the sustainability of the industry and stimulating its expansion to new locations by harnessing networks and knowledge to build an enabling environment for the sector.
• Measuring the impact on poor households and other changes in the industry so that we can continually refine and target our activities and resources.