Circular economy - Sustainable development strategy for Vietnamese enterprises
Vietnam's economic activities have been mainly based on the traditional approach, which is Linear Economy. This also has its roots in the shortage of natural resources and severe environmental contamination. To tackle these issues, countries in the world including Vietnam, tend to develop a circular economy to deal with challenges between economic growth and environmental protection, and "will not trade" the environment for economic growth. In early 2020, The World Economic Forum (WEF) also broadcasted on its website “The world needs a circular economy. Help us make it happen.”
On October 23, 2020, the Economy and Forecast Review under the Ministry of Planning and Investment and other units co-organized the workshop "Circular economy: Sustainable development direction for Vietnamese enterprises", which aimed to create a forum to exchange knowledge and to share experiences for businesses in implementing initiatives and business good practices related to the circular economy.
Workshop overview
In the opening speech of the workshop, H.E. Tran Quoc Phuong, the Deputy Minister of Planning and Investment stated that circular economy is an economic model in which all activities from designing, manufacturing to service provider towards reusing materials and reducing adverse impacts on the environment. According to the United Nations Industrial Development Organization (UNIDO), a circular economy is a self-contained production process, in which wastes could be returned and become raw materials for production. Thus, it might reduce negative effects on the environment, ecosystems and human health.
The circular economy converges four benefits for enterprises' sustainable development: resources saving, environment protection, promoting economic development, and social benefits. The feature of the circular economy is to turn waste of industry into raw materials of other industry and to reduce greenhouse gas emissions and climate change as well. By this, the circular economy model would contribute to the reduction of raw material consumption, recycling industrial human waste, and reduction of manufacturing costs for enterprises.
Shifting to a circular economy has become a trend of many countries, especially when it comes to the rapid exhaustion of the earth's natural resources. Although Vietnam has recorded some achievements in terms of sustainable development, Vietnam has also faced an increasing amount of waste generated and the exhaustion of raw materials and fossil fuels. Besides, Vietnamese enterprises often have technologically backward, small production scale and lack of investment for recycling. Therefore, the circular economy is an indispensable part of realizing the goal of sustainable production and consumption, avoiding the dependence on the external economy, especially raw materials.
Speaking at the workshop, delegates who are policymakers, representatives of businesses, experts, and researchers exchanged views and gave recommendations to deal with ongoing issues and towards promoting the development of the circular economy model in Vietnam.
Mr. Nguyen Quang Vinh, Secretary-General of the Vietnam Chamber of Commerce and Industry (VCCI), Vice President and Secretary-General of the Business Council for Sustainable Development (VBCSD) pointed out the consequences of Linear Economy, which would require the shifting to a circular economy. He also affirmed that "Circular economy is the future of business".
To raise the business community's awareness of the circular economy, VCCI collaborated with VBCSD to organize core activities to promote the circular economy such as organizing a seminar to introduce the circular economy model to the Vietnamese business community, training of circular economy for key officials of authorities and businesses, communicating, researching markets and cooperating internationally to implement circular economy initiatives.
Assoc. Dr. Nguyen The Chinh, Former Director of the Institute of Strategy and Policy on Natural Resources and Environment, Ministry of Natural Resources and Environment gave information about challenges and some recommendations of circular economy development in Vietnam. He provided that the main challenge would be the discernment of the nature of circular economy, the circular economy associated with technological innovation and design; we have not yet had a legal corridor nor the list of criteria to identify and evaluate; Circular economy might require coordination, sharing, the spirit of cooperation among relevant parties, top-notch experts and the sorting and treatment of waste before reuse or recycling. Therefore, to develop the circular economy in Vietnam, it is required an apparent legal corridor and extensive research. A circular economy should be based on industries, sectors and localities. Besides, we should establish a mechanism for the market dynamics development. Also, we should increase exchanges and take learnings from international experiences, and associate with high technology and the Industrial Revolution 4.0. Shifting to the circular economy requires a timeline and priorities. The urgent issue shall be dealt with in Vietnam is the sorting of waste at the source.
Mr. Tran Quoc Trung, Deputy Director-General of the Department for Economic Zones Management, Ministry of Planning and Investment provided a speech on eco-industrial parks towards the circular economy. Mr. Tran Quoc Trung shared good practices of eco-industrial parks in Vietnam and some countries and stated that according to the policy of developing industrial parks, since 1991, the system of the industrial park has increasingly become an important role in economic development and has been a driving force to accelerate the process of economic restructuring towards industrialization and modernization at localities and the country. Currently, there are 374 industrial parks and export processing zones, 280 industrial parks under operation (77.1 thousand ha); Attracting 9,313 FDI projects ($155 billion); 8,155 domestic projects (VND 1,037 trillion); Accounting for 50.6% of the country's export turnover, contributing over VND 121.4 trillion to the national budget, and creating 3.7 million jobs.
The goal of developing eco-industrial parks is to improve production efficiency, save resources, use energy efficiently, produce cleaner production and create conditions for the establishment of close linkages among enterprises production in the industrial zone. Also, it might help to minimize sources of pollution and waste, encourage the use of clean technology, cleaner, green production methods, take solutions that could save production costs in industrial parks. At the same time, it could form a business community in the industrial parks with high competitiveness, sustainable development, the living environment protection for the community nearby industrial parks.
Discourses at the workshop delivered basic information about the role and benefits of the circular economy, difficulties for Vietnamese enterprises in the application of circular economy as well as creative ways and good practices of enterprises that successfully applied circular economies, such as Heineken Vietnam and Unilever Vietnam.
The circular economy model would help to improve the competitiveness of the economy. Therefore, in the coming time, we should take advantage of this opportunity to shift the circular economy towards sustainable development.