UKFTA promotes cooperation in digital transformation, energy transition as VN strives for a sustainable future
UKFTA promotes cooperation in digital transformation, energy transition as VN strives for a sustainable future
The UK – Viet Nam Free Trade Agreement (UKFTA) is opening significant opportunities for enterprises from both sides to enhance cooperation in green energy transition and digital transformation as the Southeast Asian country strives to achieve net zero emissions by 2050 and embrace new drivers for economic growth.
Viet Nam was making strong efforts towards the goal of becoming a high-income country by 2045, to which digital transformation and energy transition are considered launch pads for the economy.
During a visit to the UK from August 10 to 15, Politburo Member and Head of the Party Central Committees Economic Commission Tran Tuan Anh said that Viet Nam had set strategic goals in digital transformation, digital economy and green energy conversion to achieve rapid, sustainable and inclusive growth and net zero carbon emissions as well as adaptation to the Fourth Industrial Revolution (Industry 4.0).
The two countries had established a solid relationship framework, especially with the UKFTA which came into force more than a year ago, he said, emphasising many similarities in priority development goals.
“Similarities in priority development goals create a very important foundation to boost the bilateral relations, especially in areas where the UK has strength in and Viet Nam has demand for, such green growth and digital transformation.
According to the Viet Nam Chamber of Commerce and Industry, the UKFTA not only liberalised trade in goods and services but also integrated many other important factors, many of which were geared towards ensuring green growth and sustainable development in the cooperation between the two countries.
Green growth
Energy transition has been becoming an unavoidable trend to build a green and sustainable economy and cope with climate change.
At the United Nations Framework Convention on Climate Change (COP26) held in November 2021, Viet Nam strongly committed to achieving net zero carbon emissions by 2050.
Viet Nam, with a rapidly growing economy, is facing many difficulties and challenges in ensuring energy security, green and sustainable development when the demand for power keeps increasing along with the country’s industrialisation and modernisation process.
Deputy Minister of Industry and Trade Dang Hoang An said that building an appropriate and feasible energy transition strategy was of critical importance to ensure national energy security in the medium and long term and ensure access to energy at reasonable costs.
An said that energy transition was not only an issue for the energy industry but also the entire economy about how to transform from an energy-intensive model to an energy-efficient model.
As Viet Nam was striving to accelerate post-pandemic economic growth, the view was to develop quickly and sustainably based on science, technology, innovation, creativity, digital transformation, environmental protection, and adaptation to climate change.
At the third meeting of the National Committee on Digital Transformation in August, Prime Minister Pham Minh Chinh stressed that digital transformation was an inevitable trend and a must-do task to promote socio-economic development, urging international cooperation in digital transformation to be enhanced, especially in technology transfer, talent training and attraction of high-quality investment.
Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan also called on the UK to provide support to Viet Nam in technology transferring and working out appropriate management policies and models to promote industrial development in the era of digital transformation and Industry 4.0 and in the process of transition toward renewable energy.
According to Will Cavendish, global digital services leader of Arup Group, a British multinational professional services firm headquartered in London, digital transformation played an important role in the process of transition toward a net zero carbon economy.
He stressed that there was a huge potential for cooperation between Viet Nam and the UK in this field.
The UK was in the process of digital transformation and had experiences in building laws and regulations as well as approaches in this area which Viet Nam could learn from, Will said.
He added that digital transformation would also create new industries such as electric vehicle production and offshore wind power – these were areas the UK had experience in and there were a lot of opportunities for the two sides to promote cooperation.
According to Adrian Scholtz, Global Head of Energy Deals at KPMG, Viet Nam is a Southeast Asian market that is highly appreciated by many British and European renewable energy developers, stressing that Viet Nam and the UK had significant opportunities to cooperate in energy conversion, especially offshore wind power.
The UK can support and share experiences with Viet Nam in developing long-term policies on energy transition, building offshore wind power infrastructure and developing low-carbon energy sources, he said.
He stressed the importance of the development of a legal framework for energy transition, which would be the base to attract large investments in offshore wind power and renewable energies.
Some large groups from the UK were expanding cooperation to promote renewable energy in Viet Nam.
For example, Shire Oak International recently signed cooperation agreements in developing rooftop solar power projects in Bao Minh and Nam Cau Kien industrial parks.
Deputy Minister of Information and Communications Phan Tam said that green transition was one of the focuses of Viet Nam’s digital transformation progress.
With the digital economy expanding on average 30 per cent per year, there was significant room for Viet Nam and the UK to enhance cooperation in improving institutions for digital transformation, developing digital government, digital infrastructure, promoting digital transformation at small and medium-sized enterprises, enhancing digital skills and promoting innovations.
Under the national strategy on developing a digital economy and digital society by 2025 with a vision to 2030, digital economy would make up 20 per cent of the country’s gross domestic product (GDP) by 2025 and 30 per cent by 2030.
Viet Nam’s digital economy was estimated at $21 billion on 2021, contributing 5 per cent to GDP and seven times higher than 2015. The digital economy of Viet Nam was expected to reach $57 billion in 2025 to rank second in the Southeast Asia.
According to Tran Tho Dat, former dean of the National Economics University, digital economy would be the new driver for growth model transformation and economic restructuring.
Dat pointed out that Viet Nam had been slower than other countries in the previous industrial revolutions and this was the first time Viet Nam had the opportunity to go along with other countries in the Industry 4.0 to create breakthroughs.
