In particular, the Prime Minister has also assigned specific responsibilities for developing mechanisms and policies to facilitate the development of circular economic models at appropriate levels in industries, fields, and localities.
To gain a clearer understanding of the process of building mechanisms and policies to realize this important project, VNA reporters had an interview with Mr. Nguyen Tien Huy, Director of the Office of Enterprises for Sustainable Development – Vietnam Federation of Commerce and Industry (VCCI).
Sir, after nearly 2 years since the Circular Economy Development Project in Vietnam was approved, what are the important steps in developing circular economy models in Vietnam?
Determination and open-mindedness towards the “economic” aspect of the circular economy are important, thereby orienting the circular economy approach towards a unified and comprehensive direction, both at the national level, along with the orientation to build a complete policy, legal and criteria framework system.
Important policy groups are being strongly implemented and improved by ministries and sectors, such as tax incentive policies; land policies; green classification policies; green credit and green bond policies; technology consulting and technology transfer policies; industrial park and economic zone policies; and human resource development support policies.
In addition, to promote the development of a circular economy, it should not be implemented in a mass and uniform manner for the entire economy. If a number of priority, key and focal areas (such as agriculture, energy, and construction materials) have been identified, Vietnam can implement them early, with leadership, creating impact and bringing about quick and clear socio-economic benefits.
In addition, with an economy that still uses a lot of resources, Vietnam’s transition towards a circular economy has brought many opportunities to diversify the economy and access higher value markets. Through international cooperation, Vietnam has initially approached, applied and mastered science and technology, innovation. Many green technologies have been boldly learned and transferred by domestic enterprises.
From the actual implementation of the Project, what do you think are the main difficulties and challenges in developing circular economic models in Vietnam?
Vietnam develops a circular economy to demonstrate national responsibility in its commitments to environmental protection, climate change response, implementation of nationally determined contributions (NDCs), support businesses to reduce risks of product surplus crisis, resource scarcity, create incentives for investment, technological innovation, reduce production costs, and expand supply chains. At the same time, it creates new markets and job opportunities, and participates more deeply in the global supply chain that is showing signs of disruption due to economic and political instability, natural disasters, and epidemics in the world in recent times.
However, many difficulties and challenges are related to the internal capacity of enterprises, the driving factor for the development of the circular economy. Vietnamese enterprises are mainly small-scale, have limited resources, operate unevenly in different fields and industries, have poor management and technology levels, and lack connections with each other and with other economic sectors… leading to difficulties in effectively operating all cyclical activities of the circular economic model, requiring the cooperation of many enterprises. Most circular economic models in Vietnam today are isolated, fragmented, small-circuit, not highly effective, not widely developed, and have not fully utilized the resources of the economy.
Furthermore, Vietnamese enterprises lack the motivation to switch to a circular economic model, especially when the linkages between production, distribution, consumption, product recovery, recycling, etc. in the country are still weak. Switching to a circular economic model requires operating enterprises to spend a lot of money to redesign operations, purchase technology, retrain human resources, change partners, etc. This reduces the motivation for enterprises to switch.
On the other hand, awareness of circular economy in general and circular business models in particular is still limited among businesses and people. Access to information, propaganda, sharing of practices and experiences on circular business models is still limited. The policy framework to encourage, support and legalize elements of circular economy and specific fields with potential for circular economy application is not complete, documents and contents are still lacking in system, specificity, consistency and stability.
Sir, the Circular Economy Development Project in Vietnam emphasizes public-private dialogue and corporate social responsibility in developing a circular economy. How do you view this issue?
In the specific tasks and solutions, there is an enhancement of public-private dialogue on circular economic development, on the basis of promoting the social responsibility of enterprises, the Government needs to understand and grasp the needs and difficulties of enterprises, thereby taking appropriate measures to remove and support or recommending competent authorities to consider, remove and support at an appropriate level. Do not trade the environment for economic growth.
Economic growth must be sustainable, accompanied by environmental protection, economical and efficient use of resources. The government needs to have dialogues between management agencies and businesses on the policy framework to promptly make flexible and appropriate adjustments.
Sir, many experts believe that production according to the circular economic model not only requires businesses to have a breakthrough in awareness in investment and management but also requires strong financial resources. So what is your opinion on this issue?
Converting to a circular economic model requires businesses to spend a lot of money to redesign operations, connect with businesses in the chain, production network to ensure a closed cycle, buy technology, train human resources, change partners… These are major obstacles not only in the production stage but also in the distribution and consumption of products, while products from the circular economic model are still difficult to compete in terms of quality, price, design… compared to products using raw materials. This reduces the motivation for businesses to convert. Therefore, there should be preferential policies on taxes and green credit for businesses.
In return, businesses also need to have a positive perspective and approach to the problem, aiming to open up new potential markets with high value, enhance competitiveness, motivate to improve management quality, innovate, and apply new technology.
According to the approved Circular Economy Development Project in Vietnam, the Prime Minister assigned the Ministry of Planning and Investment to preside over the development of a decree on a pilot mechanism for developing a circular economy in Vietnam. So, when this decree is approved, what impact will it have on promoting a circular economy in Vietnam, sir?
Circular economy is associated with new design thinking, has innovative applications and is related to many different policy areas, so the traditional approach to perfecting related policy contents is not enough. In addition, the impact of policies always has a lag, so management agencies should not have a scattered approach but need to have breakthrough, timely promotion policies for a number of priority areas, have impact and bring large, clear benefits.
The Decree has proposed to focus on testing the development of circular economy in sectors and fields such as agriculture, industry, energy and construction materials. These sectors create enough space for businesses and investors to propose the development of circular economic projects associated with input-output linkages between sectors, applying innovation and science and technology, increasing profits, added value and productivity. These sectors also need great momentum from the circular economic model to quickly restructure and restore effective growth in the coming time.
As a national organization that gathers and represents the business community in Vietnam, what policy proposals and support mechanisms does VCCI have to promote the circular economic model in Vietnam, sir?
As a national organization that gathers and represents the business community in Vietnam, VCCI has participated in developing the National Action Plan for implementing the circular economy by 2035, the Extended Producer Responsibility Policy Council… 10 years ago, through international relations activities, market surveys, conferences, seminars and training, VCCI shared and disseminated circular business models to the business community; researched the capacity to apply circular economy in some specific fields such as fast-moving consumer goods; researched and proposed the construction of a secondary materials trading floor…
In the field of sustainable development, VCCI has also established the Business Council for Sustainable Development; built and completed the Sustainability Index applied to the Enterprise level as a toolkit to help businesses practice sustainable business, integrating ESG criteria frameworks.
Thank you Sir!
Source: vietnamese