During an interview granted to the Vietnam News Agency on the occasion of New Year 2024, Danish Ambassador to Vietnam Nicolai Prytz stressed Denmark is ready to support Vietnam in green transition.
He also expressed his belief that the Green Strategic Partnership (GSP) will open a series of new opportunities and take Denmark-Vietnam bilateral relations to a new level.
Following is the full text of the interview:
Reporter: What do you think about Vietnam’s economic development in 2023? In your opinion, what should Vietnam do to maintain economic growth in the coming years when it is predicted that the global economy will continue facing risks and challenges?
Ambassador Nicolai Prytz: In many ways, 2023 was a difficult year for the global economy and being a largely export-driven economy, Vietnam obviously has not been immune from that – for example, exports to the European Union and the USA was down by almost 10%.
This has primarily had an impact on the manufacturing sector, but has also influenced private consumption in Vietnam. Even though some improvements did occur in the last part of the year, it seems reasonable to assume that some of these challenges will persist 2024 – but possibly to a lesser extent.
However, with an estimated economic growth of about 5% in 2023, it is safe to say that Vietnam – in spite of the abovementioned headwinds – have done quite well comparing to other countries. In fact, it is among the best performing economies in the region and the world.
Moreover, I am sure that many of these challenges are of a cyclical nature and that Vietnamese economy soon will be back on a plus 6% growth trajectory, as external demand recovers and gains further steam. The increasing inflow of FDI points to the same direction, as it reflects foreign investor’s high confidence in future economic growth in Vietnam.
All this being said, there are still things Vietnam could benefit from doing, in order to address some of the structural challenges and make it even more attractive for foreign investments. This includes improving of the business environment and increasing productivity, upskilling of the labour force, digitalisation, etc.
In order to fuel continued economic growth, Vietnam also needs to develop it’s – already – constraint energy sector. Energy security and affordability are legitimate concerns of the Vietnamese Government, but this needs to go hand in hand with the green transition.
To that end, Vietnam needs to make reforms and adopt firm policy measures in order to create an enabling environment for foreign investments that can finance the green transition. If not, it could have a negative impact on attraction of future FDI, as access to renewable energy increasingly is becoming pivotal for foreign investment decisions.
Reporter: Vietnam and Denmark have announced the establishment of the Green Strategic Partnership which opens a new chapter in the two countries’ more than 50-year cooperation relations. How would you assess the prospect of bilateral cooperation relations after the Green Strategic Partnership is established?
Ambassador Nicolai Prytz: Denmark and Vietnam already have a very fruitful and mutually beneficial partnership cooperation, but I believe that the Green Strategic Partnership (GSP) will open a series of new opportunities and take our bilateral relations to a new level.
On the political level, we expect to see an increased number of high-level visits between Denmark and Vietnam, which should intensify our policy dialogue on important topics, like climate change.
On the government-to-government technical cooperation, we already have a strong foundation through our years of fruitful cooperation within our five strategic sectors: energy, food and agriculture, health, education and statistics. This will obviously continue and be further enhanced by the GSP.
Finally, on the business-to-business level, the Embassy will continue serving as a bridge to and encourage potential Danish companies to invest in Vietnam, particularly in the green transition.
Vietnam is only the fifth country that Denmark enters into GSP with – the others being India, Indonesia, the Republic of Korea and South Africa – why it reflects the very high priority we give to our bilateral relations with Vietnam.
One can argue, that we might have different starting points when it comes to the green transition and we are on different stages in our development, but it does not change the fact that we both aim for a common goal: A green, just and sustainable globe.
This also means that Denmark within the framework of the GSP will continue to support Vietnam in achieving both its goals of becoming a high-income country by 2045 and net zero carbon emissions by 2050. As the Danish experience has shown, these two goals can indeed go hand in hand.
Reporter: Green transition is a current global trend, and Vietnam has set the target of achieving net zero emissions by 2050. How do you assess Vietnam’s efforts towards that target? How can Denmark further support Vietnam in this field?
Ambassador Nicolai Prytz: At COP 26, Prime Minister Pham Minh Chinh of Vietnam committed to achieving net-zero emissions by 2050, which sent a clear and positive signal to the world regarding Vietnam’s direction and determination towards low-carbon and sustainable development. Since then, the Government of Vietnam has taken important measures.
In December 2022, Vietnam entered into the Just Energy Transition Partnership (JETP) with the International Partnership Group that consists of the G7 countries, the European Union, Denmark, and Norway.
Subsequently, at COP28, Vietnam launched a Resource Mobilization Plan (RMP), which is an important first step in the implementation of the JETP as it includes an assessment of priority investments. It also recognises the need to create an enabling environment that can attract the vast amount of private investment that is needed for the green transition.
Finally, it should be mentioned that the Vietnamese Government in the middle of last year, finally approved the Power Development Plan 8 (PDP8), which clearly prioritises renewable energy as the source of energy to power Vietnam’s future growth.
The challenge now is to convert all these commitments into something much more tangible and real – like implementation plans, legal frameworks, etc. Vietnam is undoubtedly well positioned to lift this task, but it will require a firm commitment from all relevant ministries.
To this end, in all modesty, I do believe that the ongoing Danish-Vietnamese Energy Partnership Program is very useful, as our cooperation focus on relevant aspects of the energy transition – e.g. long-term planning of the energy system, efficient integration of wind and solar energy into the national electricity system as well as improving energy efficiency in the industrial sector.
As mentioned before, our two countries might be on different stages when it comes to the green transition and Vietnam, admittedly, is a much more complex country than Denmark (in terms of size, population, geography, etc.). The Danish solutions and ideas might therefore not always be directly applicable in Vietnam – but I do believe they can serve as useful guidance and inspiration.
Reporter: Not only the two Governments but the business communities of both countries are also strongly engaging in the green transition. What does Vietnam need to do to attract more foreign investors, like Danish, in this transition?
Ambassador Nicolai Prytz: The private sector plays a vital role in any country’s green transition. It is private investment – not public funding – that will be the main (financial) driver for this transition.
However, in order for this to happen, the Vietnamese Government needs to approve clear ambitious policies and legal frameworks that will create an enabling environment for potential investors in Vietnam’s green transition.
To exemplify this, Danish investors are ready to invest huge amounts in offshore wind projects in Vietnam that potentially can power millions of local households, improve energy security while avoiding hundreds of million tons of CO2 emissions – but investors need certainty.
With the clear policies and a proper legal framework in place, I have no doubt that Vietnam could become a regional hub for both offshore wind energy generation, but also play a crucial role in the regional supply chain for this kind of projects as it would bring along massive private sector investments in both local production and re- and upskilling of labor.
Even if we look beyond investors in the energy transition, there should be a strong incentive. As earlier mentioned, without access to renewable energy it will be difficult for manufacturers to achieve a carbon neutral footprint, which increasingly seems to be an absolute prerequisite for offsetting products – e.g. textiles, footwear and electronics – in important markets like the European Union and the USA.
Reporter: The Lunar New Year (or Tet) festival is a very important occasion for Vietnamese people. How do you feel about the Tet atmosphere in Vietnam?
Ambassador Nicolai Prytz: I only assumed as Danish ambassador to Vietnam in September 2022, so I have only spent one Lunar New Year (Tet) here. Nevertheless, even with this modest experience, it still left me with a very positive and profound impression.
Even as a foreigner, it is hard not to feel happiness when you see how families meet and spend time together, while praying for their ancestors, good health and prosperity. Tet last year also added a culinary dimension to my experience in Vietnam, as I had plenty of traditional food – even ’chưng’ cake.
Reporter: Thank you for the interview!
Bich Huong – Ngoc Thuy
