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Market mechanisms not the solution to pollution

VN Economic Times

“Market mechanisms will not solve pollution issues, only a State mechanism will,” Mr. Le Dang Doanh, senior economic expert, told Vietnam Economic Times’ Investment Attraction and Sustainable Development workshop held on September 20 in Hanoi.

Agreeing, Mr. Tran Du Lich, National Assembly Delegate for Ho Chi Minh City, said that the environment cannot be exchanged for profit. “Health, education and environmental issues cannot be regulated by a market mechanism; they are the responsibility of the State,” he said.

“The greatest risk to environmental pollution comes from lax State management and supervision,” Mr. Lich pointed out. While many enterprises complain there are too many State inspections, Mr. Doanh said, there is still a great deal of environmental pollution.

About 42 per cent of enterprises in Vietnam have wastewater treatment systems, Mr. Doanh said. “Without careful State inspection, however, people cannot trust the standard of pollution treatment systems,” he believes.

He expressed his great concern about pollution issues. In China, for example, where the environment has been sacrificed for economic development, cars in the city cannot go quickly, sometimes planes cannot land due to smog, and roads are damaged by acid rain. People’s health is also affected.

The World Bank estimates that pollution cuts 6.5 per cent from China’s GDP every year. When mentioning Beijing, many people think about pollution rather than skyscrapers. Mr. Doanh is concerned a similar scenario may happen in Vietnam. In fact, pollution cuts 5 per cent from the country’s GDP every year.

“It’s so sad that we must still talk about sustainable development, which we have researched since the 1980s,” said Professor Nguyen The Chinh, General Director of the Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE). “We can never avoid the ‘invisible hand’ of the market, so we must accept market mechanisms with their negative side regarding environmental pollution,” he said.

He suggested that any impact on the environment can be calculated and then people will have to pay when their activities affect the environment. “So far, though, the framework for calculating the cost of negative impacts on the environment has been inadequate,” he said.

Professor Chinh recommended specific accountability. “We should not blame all of the environmental pollution issues on the Ministry of Natural Resources and Environment (MoNRE), as the head of each local authority must also take responsibility,” he said.

“All industry sectors, and even agriculture, forestry and services, have to be involved in protecting the environment,” Mr. Doanh said. While the major responsibility for environmental pollution belongs to MoNRE, he added, social organizations also play an important role in protecting the environment.

Reviewing the development model in Vietnam, Mr. Tran Dinh Thien, Director of the Vietnam Institute of Economics, said that Vietnam’s industrial development is primarily based on quantity rather than quality. “Industrial development increases in quantity by using natural resources, and tourism often targets attracting more tourists rather than improving the quality of services,” he said. As a result, infrastructure and human resources remain weak.

He remains optimistic, however, that if Vietnam can access modern technology then nothing is impossible, but the country must pay more attention to human resources development, who will use this modern technology.