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| A steel production line. The country must also continue to improve the supervision of steel production to control its impact on the environment, yet another expensive undertaking. — Photo viettoday |
HA NOI (Biz Hub) — At a time when sustainable economic development is more important than ever in Viet Nam, experts urged that supervision be tightened to ensure the economy grows on the right track.
The coastal pollution disaster caused by the Taiwan-owned steel factory Hung Nghiep Formosa Ha Tinh Steel Corporation rang alarm bells for the lower middle income country regarding its development options.
Prime Minister Nguyen Xuan Phuc has repeatedly emphasised that Viet Nam will not trade off environmental integrity for economic growth. But challenges remain for the developing nation to harmonise economic growth and environmental protection successfully.
The country's growth model, institutional reforms and transparency are even bigger challenges which still remain.
Viet Nam is still in the process of industrialisation. The gross domestic product per capita was only equivalent to 30 per cent of the world average, while environmental pollution already caused significant concern, experts said at a VnEconomy conference on Tuesday.
The market mechanism was good, said economic expert Vo Tri Thanh, but it was not sufficient to resolve problems related to the environment and sustainable development. Economic growth and environmental production must be linked together, Thanh said. "It is not the story for today only but for the future."
The Director of the Viet Nam Institute for Economics, Tran Dinh Thien, said it was essential to transform the growth model and that attracting foreign investment should not merely rely on the provision of incentives.
"The growth model of the past five years hardly improved confidence in the sustainable development of the Vietnamese economy," Thien said.
"Lessons learned from Formosa are opportunities for Viet Nam to push reform," said Nguyen The Chinh, Director of the Institute of Strategy and Policy on Natural Resources and Environment. Reform would need joint efforts, Chinh said, adding that the effort of just a single ministry alone would not work.
Need for clean steel
Experts agreed that the steel industry was essential for Viet Nam to achieve its industrialisation goals.
After the Formosa pollution episode, the question of whether or not the country should continue to develop the steel industry was hotly debated.
"Yes, for the country to move towards industrialisation," said Ho Nghia Dung, president of the Viet Nam Steel Association.
Dung cited statistics showing that the steel consumption of Viet Nam averages 200 kilogrammes per head per year – lower than the world's average of 240 kilogrammes. Meanwhile each industrialised country had an average steel consumption of 500-600 kilogrammes per head per year. To meet its needs, Viet Nam imports steel worth billions of dollars each year, an expense for which the developing nation must budget.
The country must also continue to improve the supervision of steel production to control its impact on the environment, yet another expensive undertaking.
According to Thanh, steel appeared to be an appropriate choice for Viet Nam, considering the country's economic development level and advantages. — VNS