How would you assess the development of Vietnam’s digital economy and green economy in recent years?
Vietnam has seen strong trends and good opportunities in its digital and green economy. The country’s digital transformation is well underway and was accelerated by the pandemic and the continuous adaption of digital tools. Furthermore, Vietnam is set to continue promoting a green economy and adopting a circular economy model. The government is focusing on developing a framework on the adoption of principles for the circular economy, raising public awareness on green growth, and promoting new business models under the green economy.
Recently, Vietnam and Singapore signed an MoU on the Green-Digital Economic Partnership, which covers energy, sustainability, infrastructure, digital, and innovation as well as connectivity. They will enhance cooperation in the digital economy, such as electronic invoicing and e-commerce. Opportunities for business matching between Singapore and Vietnam companies will be explored under the work plan, while cooperation in renewable energy, electricity, liquified natural gas, and low-carbon solution projects will be enhanced.
How will businesses, especially Singaporean companies in Vietnam, benefit from the establishment of the Vietnam-Singapore Digital Economy and Green Economy Partnership?
The MoU focuses on the sharing of management experience, ideas, and platforms in digital transformation with a focus on the three pillars of digital government, digital economy, and digital society. Leveraging leading technologies and experience in the field of green economy and sustainable development, Singaporean companies are well positioned when investing and expanding their operations in Vietnam in these areas.
Singaporean companies can find opportunities in many new areas such as cybersecurity, data transmission and storage, smart cities, innovation, artificial intelligence, data centers, and digital payments. Digital trade and e-commerce play crucial roles in ensuring supply chain resilience and business growth.
Singaporean companies can also invest in businesses for sustainable development. Vietnam has made some progress in renewable energy, carbon credits, and sustainable infrastructure with the ambitious goal of achieving net-zero carbon emissions by 2050. This is an area where Singaporean companies may focus and expand their business. Nevertheless, we are hoping for more significant development in the legal framework for those areas, especially for carbon credits, as purchasing carbon credits in Vietnam is still difficult.
How do you envision foreign investment in the green economy in Vietnam in the near future? What should Vietnam do to prepare for this influx of capital?
Foreign investment in green economy areas in Vietnam:
Foreign investment in Vietnam’s green economy areas is expected to increase in the near future as it has set ambitious targets for renewable energy development and sustainable development.
- In the energy sector: Vietnam’s demand for energy is expected to grow significantly in the years to come, and renewable energy is seen as a key solution to meet this demand while reducing greenhouse gas emissions. Foreign investors are expected to invest in renewable energy projects such as solar and wind power.
- In ESG-related activities: Vietnam’s commitment to sustainable development and the green economy is likely to attract foreign investors who prioritize ESG considerations in their investment decisions.
- However, the above vision also depends on further efforts of the government in creating a more open environment for foreign investment in green economy areas. Some suggested reforms are to develop clearer legal framework, to consider granting more incentives, and to explore public-private partnerships.
Preparing for this influx of capital:
- Strengthen regulatory frameworks: Vietnam should strengthen its regulatory frameworks and policies to provide clear guidelines and incentives for foreign investors in green economy fields.
- Improve infrastructure: The Vietnamese Government should invest in infrastructure such as renewable energy transmission and distribution systems and waste management facilities to support green economy investments.
- Increase transparency: Vietnam should increase transparency in project approval processes and enhance the transparency of environmental and social impact assessments, which help build trust with foreign investors and ensure the implementation of green economy projects.
What is the biggest challenge for the business community in pursuing sustainable development and how can they be motivated?
- The business community will face some difficulties in pursuing sustainable development, including the lack of regulatory frameworks, limited access to technology and expertise, and importantly, the lack of funding and resources needed to invest in sustainable initiatives.
- Sustainable development often requires upfront investments, which may not provide immediate returns, and businesses may face difficulties in securing financing for such initiatives.
- Vietnamese regulators should enable financing options that are specifically designed to support sustainable investments, such as green bonds or low-interest loans, and by providing support for SMEs to access such financing.
- Additionally, creating a favorable regulatory environment and showing support for sustainable investments can encourage more private sector investment in this area.
On the journey to pursuing sustainable development, how will SingCham accompany the business community?
Singaporean companies are keen to invest in the green and digital economy sectors in Vietnam. SingCham, as a bridge between Singaporean and Vietnamese businesses, will always be supportive of the cooperation between these business communities.
- SingCham can commit to provide networking opportunities, access to relevant information and resources, and organize events and workshops related to sustainability. It can also cooperate with other organizations to advocate for policies that incentivize sustainable practices and investments in Vietnam.
- SingCham will also promote cooperation and support the country in mobilizing capital sources, attracting green finance and promoting green growth associated with implementing the MoU on the Green-Digital Economic Partnership.
We hope that SingCham’s efforts will contribute to sustainable development in Vietnam, as well as strengthen the relationship between Vietnamese and Singaporean companies.