Vietnam Environmental Technologies Export Market Plan

Chapter 2
Overview of Market for
Environmental Technologies
2.1—Current Trends
Since the beginning of Vietnam’s “renovation” period,
which started in 1986, the government’s stated goal has
been for Vietnam to become an industrialized and
modernized country by 2020. To achieve this goal, the
government adopted policies that encouraged foreign
investment and simultaneously sought to increase output
of domestic industries.
From 1991 to 1997, Vietnam achieved extraordinary
growth. Annual GDP growth averaged 8 percent during
that period, making Vietnam the second fastest growing
economy in Asia, after China. At one point in 1996, Ho
Chi Minh City (formerly Saigon) had the fastest growing
economy in the world.
Along with the benefits of industrialization have come
the costs, including degradation of the environment.
Vietnam is particularly vulnerable to environmental
problems for simple reasons. Vietnam’s 20th century
history was defined by war, primarily on its own soil.
Successive conflicts destroyed much of the country’s
infrastructure, leaving an already poor, underdeveloped
nation in even worse condition. Following the reunification
of the country in 1975, the government’s centrally
planned economic policies, especially the establishment
of agricultural cooperatives, drove the country further into
poverty. Therefore, the government has had little or no
funds to upgrade urban infrastructure such as sewerage,
drainage, and water supply. Pollution abatement has been
a luxury, not a priority. Much of the existing infrastructure
in the country’s two largest cities, Hanoi and Ho Chi Minh
City, has remained unchanged since being built early in
the last century.
The same can be said for many of Vietnam’s industries.
Loss-making state-owned enterprises have been fighting
for their survival, so installing costly waste treatment and
prevention equipment has been, and remains, a low
priority. Many of these enterprises use outdated
equipment or second-hand imports which generate higher
levels of pollution. Wastewater goes untreated and is
dumped into local waterways. Enforcement of environmental
regulations at state-owned enterprises is weak.
While firms may be inspected and fined on occasion, they
are rarely forced to close their doors. Company
management, as well as inspection bodies, are aware that
pollution is a problem, but both recognize that the SOEs
do not have the funds to address the issue. Instead,
companies try to keep the fines to a manageable amount,
rather than pay for costly pollution-prevention equipment.
Air pollution is an acute problem, since many
industries are located in densely populated areas.
Vehicular emissions are the country’s largest source of
air pollution. If the government’s decision to phase out
leaded fuel by July 1, 2001, is implemented, this pollution
source will at least become cleaner.
Some foreign manufacturers have also contributed to
Vietnam’s environmental degradation, capitalizing on the
weak enforcement of the country’s environmental
regulations. In many cases, the fines imposed for violating
standards is less than the cost of installing and operating
waste treatment facilities. There have been some reported
cases where waste treatment facilities have been installed
but are not in use. No foreign manufacturer has been shut
down because it violated environmental standards.
Over the past decade, urban migration has further
strained an already overburdened urban infrastructure.
Economic growth has been concentrated in Vietnam’s
largest cities, Hanoi and Ho Chi Minh City. In both cities,
drainage and sewerage systems are combined, so when
flooding occurs (as happens frequently) the population
is exposed to highly polluted waters. Potable water supply
in both urban and rural areas is inadequate, with large
percentages of the population going without access to
piped water or clean ground wells.
Solid waste collection and disposal is inefficient
because of inadequate collection equipment. Landfills are
reaching their capacity and many do not safeguard against
contamination of surrounding areas. Medical and other
hazardous waste are generally not treated separately from
other solid waste.
2.2 Market Drivers
Faced with these overwhelming and worsening
environmental conditions, the government passed a Law
Vietnam Export Market Plan
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