Since it introduced comprehensive policy reforms in 1990, Vietnam has developed rapidly and achieved impressive economic growth. This growth entailed the extensive use of labor, natural resources and capital and led to the current reality of low energy/resource efficiency and rising pollution levels. In response, Viet Nam adopted a National Green Growth Strategy in 2013. However, the strategy is hindered by limited common understanding of what green growth means and how it is achieved. Government bodies lack capacities to effectively develop and implement harmonized policies towards a green economy. Further, a shortage of financing inhibits green investments. In response to these challenges, the program supports the Vietnamese government with developing and implementing macro-economic reforms towards a greener model of growth. GIZ provides strategic advice, capacity development as well as methodological support by cooperating with key government institutions:
1. Strengthening advisory capacity on green growth issues: The programme provides a range of capacity building measures to assist the Central Institute for Economic Management in providing appropriate advice to the government on green growth issues. The measures include policy simulation, environmental impact analyses and stakeholder dialogues.
2. Coordination of the National Green Growth Strategy: GIZ is supporting the Ministry of Planning and Investment in its task of coordinating the various government agencies involved in the Strategy. This includes the development of related legal and administrative instruments and, at the provincial level, the formulation of green growth action plans. An extensive training programme aims at fostering a common understanding of green growth topics within the Government of Vietnam.
3. Capacity development support to the Ministry of Finance (MoF): On behalf of the EU Delegation to Viet Nam, GIZ is implementing a capacity building support facility as part of the EU’s ‘Public Financial Modernization Project’. By providing technical assistance to the MoF, the project aims to improve transparency, accountability and efficiency in public financial management (good financial governance).
4. Green fiscal policy reform: The programme provides targeted advisory services to the MoF on fiscal policy reforms. This includes a national action plan, the analysis of budget process, the adjustment of fiscal instruments and incentives for green investments, the levying of relevant taxes and the introduction of green standards for public spending.
5. Green financial sector reform: In this component, GIZ works with the State Bank of Vietnam (the country’s central bank) and with commercial banks, the State Securities Commission and the stock exchanges. The programme is promoting environmentally and socially sustainable reforms to the financial system – above all green banking and green capital markets.