Vietnam Country Environmental Analysis

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Vietnam Country Environmental Analysis
Draft Concept Paper


Vietnam’s economy doubled in size during the last decade, while its poverty rate was halved. Exports are growing by 20 percent per year, and Foreign Direct Investment (FDI) inflows by 10 percent per year. Future rapid economic growth (an expected doubling of GDP in the next 10 years) and associated industrialization and urbanization, and Government’s huge investments in infrastructure pose significant pressures on the environmental sustainability of Vietnam’s development.

Environment sustainability is included in Vietnam’s Comprehensive Poverty Reduction and Growth Strategy (CPRGS) and the accompanying Vietnam Development Goals, which together with other government’s strategies and action plans identify steps to address the environmental challenges inherent to rapid economic growth. The assistance programs of the Bank and other donors are explicitly aligned with the CPRGS. The Bank’s policy dialogue with Government has been broadly focused on public financial management, administration and state-owned enterprises (SOEs). Engagement on environmental policy issues has been modest, but its coverage in the Poverty Reduction Strategy Credit (PRSC) program is improving. PRSC3 (2004) included new policy actions on the national Law on Environmental Protection and regulations on pollution control, in addition to land and resource management issues that were included in PRSC1 and 2.

Government is raising the profile of environmental sustainability in its national and international dialogue. In 2003, Government created the Ministry of Environment and Natural Resources (MONRE), initiated separation of regulation of some natural resources from that of users, and approved the National Strategy for Environmental Protection (NSEP). In 2004, the EIA requirements for project approvals were increased and the Strategy for Sustainable Development (Agenda 21) was adopted. MONRE is now drafting amendments to the Law on Environmental Protection to enable new policy tools and remedies for pollution prevention and cleanup, and adjustments to cover environmental management in the private sector.

Despite these signs of progress, there is need for substantial improvements in the policy framework for environmental sustainability and the institutional arrangements to achieve this. Progress in achieving results has been slow due to weak commitment by sectoral agencies, low awareness in local departments and officials, and capacity challenges at all levels. There is a fundamental lack of environmental integration at planning and programmatic levels, especially in public investment planning process and in regional plans for land and resource use. In addition, awareness on the expected, negative environmental impacts of sustained economic growth, and the mechanisms for stakeholders to hold government agencies accountable for their performance is weak.

The CEA will analyze environmental policy and regulatory frameworks and their implementation, to assess their effectiveness and appropriateness in meeting the CPRGS’s objectives on environmentally sustainable development. The CEA will examine country systems for environmental management with the aim of making recommendations on how these can more effectively be used to achieve results on the ground. Specifically, the CEA will:

• Investigate environmental issues and risks in following areas: environmental management legal frameworks and their uses, and environmental sustainability issues within key areas of active support in Vietnam: industrial development, public investment in infrastructure, policy and institutional development, trade liberalization, and privatization/equitization of State Owned Enterprises.

• Identify gaps in the existing institutional arrangements and incentives for improved environmental compliance and overall environmental governance, prioritize policy improvements, and...
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