Macroeconomic Reforms/ Green Growth

Project description

Title: Macroeconomic Reforms/ Green Growth
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Socialist Republic of Viet Nam
Lead executing agency: Ministry of Planning and Investment (MPI)
Overall term: 2014 to 2018

Context

Since its comprehensive policy reforms in the 1990s, Viet Nam has developed rapidly and achieved impressive economic growth, lifting millions of people out of poverty. The growth model of this lower middle-income country entailed an extensive use of labour, natural resources and capital and led to the current low energy and resource efficiency, rising levels of pollution of air, water and soils and a continuing increase in greenhouse gas emissions.

In order to address those challenges and to foster a more inclusive and ecologically and environmentally sustainable growth model, the Government of Viet Nam adopted the National Green Growth Strategy (VGGS) in 2012.

Objective

Guided by the Viet Nam Green Growth Strategy, the Government of Viet Nam is conducting measures that foster an ecologically and socially sound growth process.

Approach

On behalf of the German Ministry for Economic Cooperation and Development, and for the European Union (EU) as a co-financer, the Macroeconomic Reforms/ Green Growth Programme supports the Vietnamese government in developing and implementing macroeconomic reforms towards a green, more inclusive model of growth. The Programme provides technical advisory and capacity development services to the key government agencies implementing the VGGS: the Ministry of Planning and Investment (MPI), the Central Institute for Economic Management (CIEM), the Ministry of Finance (MoF), the State Bank of Viet Nam (SBV), and the State Securities Commission (SSC).

The Programme is supporting the MPI in its task of coordinating the implementation of the VGGS as well as the National Action Plan to Implement the Sustainable Development Goals (SDGs), including development of adequate monitoring and evaluation tools for both strategies. The programme also provides a range of capacity building measures to assist CIEM in providing policy recommendations for green growth based on state-of-the-art research. On behalf of the EU Delegation to Viet Nam, the Programme is implementing the EU-Public Finance Modernization Project aiming to improve transparency, accountability and efficiency in public financial management. The programme also cooperates with MoF on green fiscal policy reforms, e.g. environmental taxation. Finally, the Programme supports SBV, commercial banks, SSC and stock exchanges in promoting environmentally and socially sustainable reforms to the financial system.

The Programme focuses on capacity development, trainings and e-learning courses to enable its partner organizations and key stakeholders to implement reforms in an independent and sustainable manner. The cooperation with other relevant institutional stakeholders, such as the Ministry of Environment, the Ministry of Industry and Trade and other donors, is also important for the Programme in order to maximize potential synergies in policies related to the cross-cutting issue of fostering green growth.

Results

  • Five provinces in the Mekong Delta outlined options for local green growth measures by developing green growth action plans.
  • The environmental protection tax imposed on refined fuels, coal, selected pesticides and plastic bags raises additional funds for the state budget.
  • The Ministry of Finance introduced the first State Budget Law (SBL) in Viet Nam, thereby increasing fiscal discipline and budget transparency. 90 million people gained access to state budget information.
  • The State Bank of Viet Nam introduced a green credit programme providing access to 240 Million US-dollars for green investments in Viet Nam. The State Bank of Viet Nam also introduced social and environmental risk assessments in the lending activities of the banking sector.
  • The Ho Chi Minh Stock Exchange launched the first Green Index (Vietnam Sustainability Index - VNSI) tracking sustainability performance of 20 listed companies in Viet Nam. The VNSI is expected to become an important driver of sustainable investment and corporate sustainable development in Viet Nam.
  • More than 200 policy makers from a plethora of Vietnamese government agencies increased their knowledge and capacity in the area of green economy through targeted trainings and practical transfer projects in Viet Nam and Germany.
  • More than 4,000 officials have been trained in State Budget Law and the implementation of its guiding regulations.