Ho Chi Minh City promotes new economic models towards sustainable development

	Ho Chi Minh City’s revenue reaches over VND300,000 billion
	Creating a breakthrough for the development of Ho Chi Minh City's service industry

Green growth and development are the future development strategies of Ho Chi Minh City. Illustrative photo

Prioritizing green economy development

Green growth and development are the future development strategies of HCMC, aiming to green the economy and achieve economic prosperity, environmental sustainability, social equity, and the advancement of values, contributing to the global goal of reducing global warming.

Speaking at an event within the framework of the 2024 HCMC International Economic Integration Forum, Mr. Pham Binh An, Deputy Director of the HCMC Institute for Development Studies, stated that HCMC is a major center for economics, finance, commerce, science and technology, innovation, education and training, and culture of the Southern Key Economic Region and the whole country. However, recently, HCMC has been facing numerous difficulties and challenges in socio-economic development. HCMC is among the top 10 cities globally severely affected by climate change. Although the GRDP scale of HCMC has consistently led the country, with a broad-based development model, the economic growth rate is showing signs of stagnation. This necessitates HCMC to seek new solutions, driving forces, and avenues for economic development.

Recently, the city has issued relevant programs and projects to implement and develop new economic models such as the Project "Development of the digital economy, sharing economy, and circular economy in the City in the period 2020-2025, with a vision to 2030"; focusing on transitioning towards "green" and "digital" practices in the government, businesses, and among the people. Currently, HCMC is building a system of solutions and policies toward green transition and sustainable development, focusing on supporting and promoting energy transition, technology, and sustainable consumption, with businesses at the center of implementation. Resolution No. 98/2023/QH15 of the National Assembly on piloting specific mechanisms and policies for the development of HCMC has opened up many opportunities and driving forces for HCMC's digital and green transformation journey.

Mr. Vu Mac Hung, a socio-economic consultant at Boston Consulting Group (BCG), emphasized the vision and strategy of comprehensive green growth through clearly defining the scale of impact from an overall perspective on employment, economic growth, and investment. Additionally, Resolution 98 mentions allowing HCMC to issue green bonds and pilot carbon credit trading. This is considered a key priority to promote the green ambitions of the city and Vietnam as a whole.

Besides the green economy, the transition to a digital economy is also crucial. Mr. Hung proposed core solution groups for the successful development of the digital economy, focusing on governance and organization; policies, regulations, and standards; leadership capacity, talent, skills, and culture; research, development, and innovation; and incentives and investment.

Currently, the business community is leveraging HCMC's preferential mechanisms for green businesses and products; maximizing the city's support policies, striving to implement restructuring, green transition, invest in technological innovation, and apply green criteria in production.

Considering industry as a new development driving force

Along with green and digital transformation, HCMC is considering industrial transformation as a new development driving force. Assessing this new driving force, Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), stated that transforming the industry towards high-tech and modernity will bring high added value to HCMC. This new driving force will help the city avoid lagging behind the increasingly demanding requirements of the global landscape, while also improving product quality for the domestic market.

According to data from the HCMC Statistics Office, in the first half of 2024, the industrial sector of HCMC reached a scale of over 152,800 billion VND, an increase of 5.64% compared to the same period in 2023, accounting for 17.8% of GRDP. Although ranked second, the proportion of industry in the economic scale and GRDP growth is gradually decreasing. Experts and managers note that after 50 years of development, HCMC's industry has become outdated, still relying on resource-intensive and labor-intensive practices with low added value.

Vietnamese businesses are facing significant opportunities and challenges, requiring them to be proactive, seize opportunities, and overcome difficulties to thrive. As the global demand for green products and services increases, meeting green standards such as the Carbon Border Adjustment Mechanism (CBAM) and ESG (Environmental, Social, and Governance criteria) has become a prerequisite for businesses to export goods globally while also elevating the domestic market.

To achieve this, industrial transformation is a solution that businesses cannot afford to ignore. According to experts, the industrial transformation process will help businesses enhance their competitiveness, resilience to external shocks, increase market share, and revenue. Industrial transformation towards green and sustainable practices is a necessary choice for localities. Production enterprises must increasingly meet green transformation requirements. Failure to adapt could result in the transformation becoming a new technical barrier for Vietnamese goods.

The process of green transformation and industrial transformation of the city's business community and the economy has been underway for many years. However, this focus remains fragmented and lacks synchronization. Businesses face difficulties in this transformation process due to high investment costs, underdeveloped technological infrastructure, and limited access to cybersecurity solutions. The green transformation strategy requires a system-wide transformation, encompassing not only businesses but also state management agencies, training institutions, and consulting units.