Wednesday, December 7, 2016

Climate Change Causes Loss of 0.6 Pct of GDP Growth

At the international scientific conference “Vietnam Economy in Medium Term: Prospects and Environmental Effects”, many scientists forecast that in the period of 2016 – 2020, natural disasters and environmental pollution will reduce the GDP by 0.6 per cent per year.
According to Deputy Minister of Planning and Investment Nguyen The Phuong, 2016 is the first year of implementation of the plan of socio- economic development in the period 2016-2020. This period marks a new milestone of the macro-economy, with important breakthroughs, restructuring, transformation of growth pattern and enhancement of the competitiveness of the economy. With the reform efforts of the country, along with the positive impact from the integration process, the economic growth is forecast to be higher than that of the previous period. However, policy makers also agree with the scientists that Vietnam’s economy is facing many challenges and pressures that are not small, including the impact of weather factors and risks of the environmental pollution in the development process. Accordingly, Vietnam is considered one of the top 10 countries directly affected by the severity of global climate change. The average forecast in the period of 2016-2020, natural disasters andenvironmental pollution could reduce the GDP by 0.6 per cent per year.
Scientific studies also indicate that the extreme climate change andenvironmental pollution has made extremely negative impacts on many aspects of the macro-economy. According to the Climate ChangeVulnerability Index (CCVI), the assessment of the damage caused byclimate change in the recent 30 years are based on 42 indicators of economy, society and the environment. The Maplecroft, a British company, specialising in risk assessment analysis in 193 countries, Vietnam ranks 23rd out of 193 countries and is one of 30 countries that will be at “very high risk” of being severely affected by climate change and rising sea levels.
According to the analysis of Dr Dang Duc Anh, Director of the Analysis and Forecast Division of the National Centre for Socio-economic Information & Forecast (NCEIF), the Ministry of Planning and Investment (MPI), climate change affects all regions and areas of Vietnam, in which water resources, agricultural production and rural development, and health care. Besides, coastal areas will be most heavily affected.
The National Centre for Socio-economic Information & Forecast (NCEIF) also proposed a less positive scenario that the world economy and international trade will fall into a sharp decline and instability of global financial system; the investment growth rate is 7 per cent; the risks from public debt, budget deficit and the financial system is growing; a large reliance on the old-styled growth model; and an increasingly fierce competition.
The forecast average economic growth of Vietnam in the period 2016-2020 could reach 6.2 per cent in the hypothesis that the world economic growth will continue to be stable in the average rate of about 3 per cent. The state investment will be improved in both quality and quantities of the disbursement. The policy management, legal procedures and the investment environment continue to improve. The social investment rate continues to increase by 7 per cent on average.
It is forecast that the average economic growth in the period 2016-2020 of 6.55 per cent is less likely to occur but also can be achieved if the process of economic restructuring takes place robustly, especially through the thorough reform of the institutional management, thereby enhancing the efficiency of public investment and labour productivity of ASEAN countries. Meanwhile, not only does the economy achieve stable growth, corresponding to an average economic growth of about 6.85 per cent in the last period, but it also can maintain sustainable growth, creating premises for the next 5- year plan.
According to Associate Prof Le Xuan Ba, former Director of the Central Institute for Economic Management (CIEM), whether the issue of climate change should be worried, Vietnam should make its stronger reforms to be able to fight external challenges. For example, in the Mekong Delta if the sea level rises, it is the chance of clean shrimp farming, or something else, to be able to earn greater resources traditional rice cultivation. This depends on the capacity forecasts, predictions, dare to change and the level of science, technology of Vietnam.
Deputy Minister Nguyen The Phuong said that there should be an in-depth study on indicators that are used to forecast the Vietnam’s economic growth in the medium term. These studies will provide the early warning in order to serve the construction of the economic development policy of Vietnam in the coming time. According to scientists, Vietnam also needs to encourage the use of clean energy such as natural gas, biofuels, new energy, renewable energy, as well as licensing limit emissions of air pollutants. There should be an improvement of the legal system for the environmental protection, which has the strongest sanctions to the violators.”Vietnam should strengthen the supervision of discharge, ensuring the compliance with regulations on technology and environmental protection for industrial development projects; budget for environmental protection activities, particularly for the investment activities of collecting data and developing assessment models to warn the impact of climate change and pollution of the economy,” said Deputy Minister Nguyen The Phuong.
Anh Phuong


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