Policy improvement needed to spur green growth

09:55 | 26/03/2018 Investment

(VEN) - While it has attracted great attention from domestic and foreign investors, investment in green growth remains difficult in Vietnam. Economists are urging authorities to improve policies to promote green growth investment.

policy improvement needed to spur green growth

According to the Ministry of Planning and Investment, Vietnam needs investment capital of US$30 billion to realize its 2013-2020 national strategy for green growth, with a vision to 2050, approved on September 25, 2012. The state budget can finance about 30 percent of the need, and the remaining 70 percent should be mobilized from the private sector.

Pham Hoang Mai, Director of the Ministry of Planning and Investment’s Department of Science, Education, Natural Resources and Environment, said investment in green growth is attracting a great deal of attention by domestic and foreign private investors. It has attracted almost US$2.5 billion from domestic enterprises and household businesses, investments that appear set to grow in the coming years.

Ministries, sectors and localities have developed and issued action plans for green growth to pave the way for domestic and foreign investment in this field. Specifically, the Ministry of Planning and Investment, the Ministry of Finance, and the State Bank of Vietnam have focused on legal frameworks and institutional improvement, and attracting financial and technological resources. The Ministry of Agriculture and Rural Development, the Ministry of Transport, the Ministry of Industry and Trade and localities are working on legal frameworks, trade promotion, business development, and financing for green growth. Le Duc Chung, a green growth consultant from the Ministry of Planning and Investment, said 34 of 63 provinces and cities nationwide have developed and issued action plans for green growth.

Although they have received support from Vietnamese ministries, sectors and localities, according to economists, investors are still facing many difficulties. Vu Chi Dung, Director of the State Securities Commission’s International Cooperation Department, said policies to promote investment in green growth remain inadequate and unclear, and need to be supplemented and improved.

A Vietnam Chamber of Commerce and Industry (VCCI) representative said VCCI has carried out a study on green credit, showing that many banks haven’t been informed what constitutes credit for green growth (green credit) and no green credit standards have been issued. Therefore, banks do not have the legal basis to finance private green growth projects, he said.

Investors are till hesitating to invest in green growth because the sums required are large and such investments are considered somewhat risky given that Vietnam’s unclear and inadequate policies discourage investors. Vu Chi Dung, Director of the State Securities Commission’s International Cooperation Department, said Vietnam needs to improve green growth policies so that local action plans for green growth facilitate private investment. To turn green growth into a trend, it is important to improve community awareness of green growth’s role in the development of enterprises and the national economy, Dung said.

Green growth has become an indispensable trend worldwide and attracted great investor interest. Vietnam needs to formulate explicit, adequate policies favorable to domestic and foreign private investment if it is to be able to promote green growth.

Nguyen Hoa