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Dinh Vu

Economic Sector

Last updated: Monday, June 18, 2018


New Choices for Sustainable Development

Posted: Friday, January 20, 2017

Before hard lessons on environmental issues, Prime Minister Nguyen Xuan Phuc affirmed that Vietnam opts for sustainable growth rather than overheated growth. To achieve this, it is necessary to consider the transition to a circular economy as a solution to address waste emission and promote the effective use of materials and environmental protection.

The downside of investment attraction
Environmental disasters in four central provinces caused by emissions from Formosa factories raised an alarm for environmental management. After opening the economy to draw foreign direct investment (FDI), Vietnam has always faced the paradox: Defining that [it] never trades off environment for economic growth, the economy with limited resources finds it extremely hard to draw investment with environment-friendly technologies. Besides, while setting the target of processing and creating more added value, Vietnam must also address thorny environmental issues which were not raised when it simply played an assembling or processing role.

Pollutant emission is a consequence of single-dimensional approach. When we only look from the perspective that we must spend expenses on treatment, we will then think that the less we spend, it is better. Nonetheless, waste and emission are much more complicated. It is essentially the process of efficiently using input materials and controlling energy waste in production.

In fact, increasingly scarce and exhausted natural resources, population explosion and political exoduses result in heavier and costlier expense burdens on enterprises, government and society. Therefore, businesses in advanced countries tend to shift production to countries where they can take advantage of lower costs for environmental remediation. According to a study released by the Central Institute for Economic Management (CIEM) in April 2016, nearly 70 per cent of FDI enterprises said investments in Vietnam will help them reduce environmental costs by 10 - 50 per cent compared with investments in their own countries. Environmental incidents are hard lessons for us to be resolute to change our behaviours for a sustainable production and consumption.

Green value cycle
With a linear economy, people start with using commodities and end with waste. But now, people start to use commodities in an unending process. This process is a circular economy where it turns commodities we use today into resources we will use in the future. One of the biggest benefits of advancing the circular economy is that efficiently used resources help protect the environment and promote sustainable development. This is what the Government of Vietnam attaches great importance and pursue with long-term strategies.

The principles of circular economy are still quite new in Vietnam. Therefore, quickening the transition requires the consent of the government, the people and the business community and creating a policy that encourages society-benefiting activities and regulation aimed at reducing harmful environmental actions. However, as more than 95 per cent of Vietnamese companies are small, the feasibility of this transition is much doubted. But, small businesses are highly adaptable to new developments. Once they are aware of business opportunities from materials previously regarded as ‘waste’, they will feel motivated to change. What is left is how to create the supporting environment for that change and how to communicate this inevitable trend to the business community. The circular economy has become an inevitable trend because it is not only good for the environment, but also good for corporate competitiveness.

The circular economy motivates technological innovation towards the effective reuse of resources. The process of changing perception to 3R (Reduce, Reuse and Recycle) into behaviours and actions will take time. However, Vietnam cannot miss the general trend of the world.

Nguyen Quang Vinh
Secretary General of the Vietnam Business Council for Sustainable Development (VBCSD)


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