Vietnam will pursue digital transformation and green transformation simultaneously.

On the afternoon of September 25th, within the framework of the 5th Ho Chi Minh City Economic Forum (HEF) 2024, Prime Minister Pham Minh Chinh chaired the policy dialogue session. This also marked the first time the Ho Chi Minh City Economic Forum held a direct dialogue session with the head of the government.

Innovation is essential for a double transformation.

In his opening remarks at the dialogue session, Vice Chairman of the Ho Chi Minh City People's Committee Vo Van Hoan raised the following issues: Alongside the achievements, Ho Chi Minh City's industry is facing challenges; development lacks sustainability; processing and assembly still account for a high proportion; and added value is low. Some technologies, after more than 30 years of investment and development, are now outdated. Meanwhile, the development process still relies heavily on resources, is labor-intensive, and supporting industries are developing slowly. In particular, the distribution of export processing zones and industrial parks is no longer suitable, with some industrial parks currently located in the city's core area. Therefore, to overcome these challenges, the transformation of Ho Chi Minh City's industrial sector is extremely urgent and necessary.

Prime Minister Pham Minh Chinh chaired the policy dialogue at the 5th Ho Chi Minh City Economic Forum 2024.

Photo: Nhat Thinh

During the discussions, many international experts shared experiences on successful transformation models. Unlike the development model of Penang (Malaysia), which relies on multinational corporations, Professor Keun Lee, an economist at the University of Canada and former Vice Chairman of the National Advisory Council of South Korea, stated that Taipei (Taiwan) and Shenzhen (China) have successfully built strong domestic businesses, enabling them to quickly catch up with advanced markets. Professor Keun Lee emphasized that Ho Chi Minh City can learn from Taipei and Shenzhen's experiences as the city strives to boost technological development and promote the growth of domestic businesses. Specifically, the governments in Taipei and Shenzhen have implemented strong "public intervention" policies to promote the development of domestic businesses, including the strong development of professional and skills training, and the provision of high-quality human resources. Furthermore, to increase technological innovation and domestic technology ownership, experts recommend that Ho Chi Minh City in particular and Vietnam in general need a transformation strategy after the initial phase of learning from external knowledge sources. Simultaneously, they suggest promoting technology transfer from foreign investors to domestic businesses. "This is a crucial step to help Vietnam quickly catch up with technologically advanced countries," emphasized Professor Keun Lee. Similarly, another successful industrial transformation model is Chongqing (China). Mr. Trinh Huong Dong, Deputy Mayor of Chongqing, suggested that Vietnam needs to establish a land-sea corridor transit center in the two major cities of Hanoi and Ho Chi Minh City. The purpose is to expand the scale of exporting high-quality Vietnamese agricultural products to China's domestic markets. Previously, Mr. Vo Van Hoan shared Ho Chi Minh City's determination to build 180 km of urban railway by 2035 and invited Chongqing to invest in one of the components of this system. Commenting on scientific and technological research products, experts from Israel said that their country's strong scientific and technological development is due to research results, whether private or state-funded, being brought to market and becoming commodities. As the moderator of the policy dialogue session, economist Dr. Tran Du Lich directly addressed the question: What priority policies has the government implemented, is implementing, and will implement to support large and small businesses in accelerating the economic transformation process, primarily in the industrial sector? What is the national action plan on the circular economy; and what breakthrough policies and solutions are needed in science and technology across three fields: information technology, biotechnology, and new materials? In addition, representatives of foreign investors and Dr. Tran Du Lich also raised issues with the government regarding new policy mechanisms to encourage localities to participate with the government in the Net Zero commitment by 2050; and preferential policies for attracting new-generation foreign direct investment (FDI), especially after the application of the global minimum tax rate. At the dialogue session, Deputy Minister of Planning and Investment Tran Quoc Phuong stated that a deeper understanding of industrial transformation is a dual transformation: digital transformation and green transformation. To achieve this, innovation is essential. In the near future, the Ministry of Planning and Investment will submit to the Prime Minister a proposal to establish a fund to support businesses in the fields of innovation, digital transformation, and green transformation. Deputy Minister of Natural Resources and Environment Le Cong Thanh informed that Vietnam will aim to amend the environmental protection law to limit the import of scrap materials and encourage the collection and use of domestic scrap materials as raw materials for production. Representing the Ministry of Science and Technology, Deputy Minister Le Xuan Dinh stated that the Ministry is developing and amending the draft Law on Science, Technology and Innovation, replacing the current Law on Science and Technology. The biggest change is the regulation on the use of budget funds for public units to carry out research projects; this draft law will replace it with the use of socialized resources for science and technology activities. This will create conditions for businesses to absorb technology and increase innovation.

Many international delegates attended the dialogue.

Photo: Nhat Thinh

Furthermore, to effectively implement the green transition, Deputy Minister of Industry and Trade Truong Thanh Hoai stated that the Power Development Plan 8, approved by the Prime Minister, aims to avoid investing in additional thermal power projects and gradually reduce coal-fired power generation. Simultaneously, it emphasizes minimizing emissions and identifying alternative, lower-emission power sources such as liquefied natural gas, solar power, renewable energy, and onshore and offshore wind power.

Institutions must be built and perfected.

In his remarks, Prime Minister Pham Minh Chinh stated that a crucial task is to implement energy transition, shifting from high-carbon energy sources like coal-fired power plants to clean and green energy, with a roadmap to phase out coal-fired power plants. Regarding economic development, the government identifies external resources as important and a breakthrough factor. While global FDI attraction has declined since the beginning of the year, Vietnam has still brought in $21 billion, with disbursements reaching $14 billion – the highest level ever. This demonstrates the effectiveness of Vietnam's FDI attraction efforts. "To attract FDI, three factors are needed. Firstly, a transparent mechanism is required, removing obstacles and barriers to investment procedures, reducing bureaucracy, and decentralizing power to localities more. Secondly, a transparent infrastructure is needed to help reduce logistics costs to the level of developed countries. Thirdly, a high-quality workforce is needed for emerging fields such as chips, semiconductors, artificial intelligence, and cloud computing," the Prime Minister stated. In his concluding remarks at the dialogue session, Prime Minister Pham Minh Chinh emphasized that industrial transformation must both revitalize traditional industries (such as mechanical engineering and chemicals) and develop new industries with a broader concept, related to new fields such as the digital economy, green economy, sharing economy, circular economy, knowledge economy, and night economy. To succeed, institutions must be built and perfected. Recently, Ho Chi Minh City received a resolution from the National Assembly on some specific mechanisms and policies. Along with developing a comprehensive and modern infrastructure, it is necessary to focus on training high-quality human resources and smart governance. Solutions must be found to mobilize resources through promoting public-private partnerships, and given the conditions of Ho Chi Minh City, this must be achieved.