Unblocking Green Growth Bottlenecks

Mr. Pham Tan Cong, President of VCCI and Vice Chairman of VBF, said that Vietnam has set high development goals. To become a civilized modern developed country in this century, Vietnam has set a dual goal of rapid and green development with GDP growth maintained at 6-7% per year and green technology and green growth as the dominant direction.

Great opportunities

In particular, the statement of Prime Minister Pham Minh Chinh at COP26 demonstrated the government's determination to promote green and circular economic development, and the commitment of Vietnam to contribute to solving global challenges, climate change, and the environment. The Vietnamese business community supports and accompanies the government in implementing these important goals.

Thomas Jacobs, Country Director of the International Finance Corporation, emphasized the need for private enterprises to join hands with the public sector to realize commitments at COP26, aiming to make Vietnam a high-income country by 2045 and achieve carbon neutrality by 2050. Referring to the National Climate and Development Report for Vietnam by the World Bank, which predicts that the sustainable net emission growth trajectory will require an additional 6.8% of GDP investment annually, or $368 billion by 2040, Thomas Jacobs believes that half of this amount (about $184 billion) should come from the private sector.

These development goals create new opportunities and development space for the business community. Gregory Testerman, Chairman of the American Chamber of Commerce in Vietnam (AmCham), said that Vietnam had an impressive growth rate in 2022, and green economic development would be a driving force in the years to come. Many US businesses have seen opportunities and desire to invest in Vietnam, with energy being one of the top priority areas.

Arnaud Ginolin, representative of Boston Consulting Group, shared that Vietnam is welcoming the global production shift, with many factories being built and a high demand for green energy. Therefore, Vietnam's top priority today should be energy. Corporations are waiting for investment opportunities to bring experiences and knowledge from those who have gone ahead to contribute to faster green transformation.

The challenges ahead

According to the 2021 UNDP report, even in energy-intensive sectors such as production, transportation, and construction, only about half of businesses apply energy and resource-saving solutions. To encourage green growth, Mr. Dau Anh Tuan - Deputy Secretary-General, Head of the VCCI Legal Department, said that it is necessary to improve the legal framework, preferential mechanisms, and support for businesses.

Currently, the level of understanding, environmental regulations; the level of investment for innovation, and green practices of Vietnamese businesses are at a starting level; the level of environmental compliance by businesses is not high because the private economic sector in Vietnam is currently mainly composed of small and medium-sized enterprises. In addition, the high investment costs for green production reduce the competitiveness of businesses in the short term. VCCI's survey results show that 44% of domestic enterprises and 38% of FDI enterprises admit to not fully complying with environmental regulations; 37% of businesses participate in local environmental protection programs.

Based on these facts, VCCI recommends that the Government establish and improve the green growth regime and policies with the participation of businesses to ensure feasibility; have policies to encourage and incentivize investment in high-tech and clean technologies; enhance access to capital for green growth of businesses; continue to improve the green business environment...

In his keynote address at the Vietnam Business Forum 2023, Prime Minister Pham Minh Chinh highly appreciated the forum's theme as very practical in the context of Vietnam's economic restructuring, shifting from "brown" to "green" growth models, and developing based on green, digital, circular, and knowledge economies. At the same time, he identified green and sustainable development as an important driving force for long-term growth, relying on science and technology to develop the country.