Announcement Ceremony of Annual Mekong Delta Economic Report 2022
August 2, 2022
- Excellency Mr. Le Minh Hoan, Minister of Agricultural and Rural Development
- Excellency Mr. Nguyen Thanh Phong, Vice Chair Central Economic Comission
- Excellency Mr. Pham Tan Cong, Chairman, Vietnam Chamber of Commerce and Industry
- Excellency Mr. Tran Viet Truong, Chairman, Can Tho Metropolitan City,
- Ms. Sarah Hooper, Australian Consul General in Ho Chi Minh City,
- Ms. Carolyn Turk, World Bank Country Director in Viet Nam,
- Distinguished representatives from national agencies, ministries, provincial authorities, development partners, private sector and media agencies,
- Ladies and gentlemen,
It is an honor to speak at this launching event for the second Annual Mekong Delta Economic Report 2022, including a strategic transformation model for agriculture.
At the outset, I would like to congratulate the Viet Nam Chamber of Commerce and Industry -both its main office in Ha Noi and its branch in Can Tho - for initiating this important economic report series for the Mekong Delta. UNDP is delighted to have contributed to this second report in the series that we launch today.
As you will recall last month, the Government of Viet Nam launched the first multi-sector, inter-disciplinary, and inter-provincial master plan, applying a nature-based and people-centred approach for the sustainable, green, and climate-resilient development of the Delta.
Now is the time to bring together stakeholders – from Government, entrepreneurs, scientists and farmers, to take action to realize the master plan. This is not an easy task. Today, I would like to offer some suggestions to consider in moving from plan to action, as well as areas which would benefit from deepening the analysis of next year’s report:
First and foremost is to focus on the distribution of costs and benefits of adaptation to climate change to ensure that agricultural transformation does not impoverish vulnerable people and communities:
The Report shows that climate change will transform agriculture in the Mekong Delta. Adjustment to climate change will inevitably take place through markets as land and housing in some places becomes more expensive and in other places lose value due to flooding, saline intrusion and other factors. Government cannot offset these climatic effects but must intervene to protect those most at risk.
- Ecosystem change will result in migration on a large scale. It is important to avoid controlling the movement of populations, and instead facilitate migration to places that can offer good jobs, decent, resilient housing and essential public services through the use of incentives, including the construction of affordable housing in industrial zones and in areas with thriving export agriculture.
- The report notes that 41% of the labor force in the Mekong Delta are employees. A more complete tally of migrants would probably yield a higher figure. Given that half of the region’s labor force works for wages, the creation of productive, sustainable jobs is the key to climate change adaptation that leaves no one behind.
Second, Public investment plays a key role in crowding in private investment
The public investment in infrastructure in the Mekong Delta has not kept pace with demand. Additional public investment is needed and must be accompanied by greater efficiency in planning and implementation, avoiding duplication, delays and cost overruns that have held back infrastructure development in the region.
- Regulatory restrictions have also forced up logistics costs by creating barriers to entry in distribution, warehousing and transport. Provinces in the region need to work together more effectively to encourage realization of economies of scale in logistics.
- Development of green and blue financing and specific climate finance mechanisms is needed, to accelerate and attract green finance for agriculture and relevant projects
Third, and critically important is to increase the supply of domestic long-term, finance
External finance is important, especially when it comes with advanced technology and capital equipment that is not yet produced in Viet Nam.
- However, most of the financing for climate change adaptation will come from domestic sources. Government can play a more active role in fostering the development of deeper and broader domestic capital markets, especially secondary markets for domestic bonds and other financial instruments.
- There are many useful models on the use of public banks in developing and advanced countries to stimulate private sector lending through partial guarantees, structured finance and even equity stakes in new ventures.
Fourth, encourage new models of agricultural transformation
- Agriculture will become increasingly capital and technology intensive. The Mekong Delta will continue to be a major rice producer, but will gradually shift into higher value-added commodities, including fish and shellfish, fresh produce for export and for Viet Nam’s growing cities.
- Government will play an important role in stimulating innovation, creating incentives to encourage sustainable practices, regulating the use of pesticides and overuse of chemical fertilizers, building public infrastructure and reducing logistics costs.
- UNDP has been providing technical assistance and support to provincial authorities and vulnerable communities in coping with the impacts of disasters, climate change adaptation, and Covid-19 in the Mekong Delta;
- Our support has broadened to include: greening supply chains; demonstration of climate smart food systems; and development of traceability system for agricultural export to new market.
Fifth and finally, provinces must act together
- The social, economic and environment and climate change challenges cannot be resolved by a single province or Can Tho in isolation. This Report is launched just in time as provincial authorities in the Mekong Delta are starting to design provincial plans, following the regional master plan by the Government last month. The Report provides rich and valuable data and information for planning purposes.
- Provinces need to act together to realize economies of scale in public investment, logistics, water conservation, flood control and the development agricultural production systems. In particular, information sharing on risks of saltwater intrusion and drought into agricultural, forestry and fishery development plans in ecological sub-regions is needed.
- I look forward to an engaging discussion on accelerating the agriculture and economic transformation of the Mekong Delta in ways that are sustainable, Smart, and leave No One behind.
Thank you. Xin Cam On!