Vietnam and the Mekong Delta: Drafting a plan to ensure greater productivity and climate-resilience

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As one of the most fertile regions in the world, the Mekong Delta produces half of Vietnam’s rice, 70% of its aquaculture, and one-third of its GDP.  At the same time, the low-lying delta is one of the places most vulnerable to the adverse impacts of climate change. The Delta is at a turning point in which its economy – to fulfill its great potential – needs to be more productive, innovative, and climate-resilient.

A paradigm shift in the development of the Mekong Delta merits an accurate understanding of its current state. The natural conditions of the Delta are shaped by a host of exogenous factors, both upstream and downstream. Climate change is arguably the biggest influence, with its impacts being felt across administrative boundaries and sectors. At the same time, each sub-region has distinct hydro-ecological characteristics and natural endowments, with different levels of carrying-capacity constraints and climate exposure.

Human activities negatively affect the Mekong Delta too. It suffers from unsustainable exploitation of natural assets (e.g., forest, water, soil) both upstream and within the Delta. Siloed planning in the past has resulted in overlapping or contradictory actions, while policies and investments on land, cropping, water and urbanization have not taken climate factors into consideration. The Mekong River is also one of the 10 river systems carrying 90% of the plastic litter that ends up in the oceans worldwide.

Beyond the full understanding of the delta, a path for the Mekong Delta’s future development will require breakthroughs. This includes a shift from a provincial perspective to one that is integrated, area-based and adopts a delta-wide and transboundary perspective. Another shift is from a short-term, sectoral perspective to a long-term, multi-sectoral one. It is encouraging to see these strategic shifts codified in Vietnam in the Prime Minister level Resolution No. 120 on Sustainable Development of the Mekong Delta in Response to Climate Change issued in November 2017, and the associated Prime Minister-approved Action Plan, while also being consolidated further in the Vietnam Mekong Delta Integrated Regional Master Plan that is under preparation.

The multi-sectoral, multi-stakeholder nature of the new development paradigm requires a strong regional coordination institution which is currently lacking. International experiences show that improved coordination is instrumental to bring together varying interests towards common goals, identify investment priorities, allocate responsibilities, and determine the sharing of benefits.

At the same time, the initiatives in the Mekong Delta should make use of the latest advances in information technology and digital innovations to generate needed information and analysis on the continuously evolving dynamics of the delta and its external challenges. Such information will help assess the impact of multiple drivers-of-change on the Mekong Delta, understand trends, and inform policies and investments. A comprehensive data system would also support the monitoring of activities in the Mekong Delta, while promoting transparency and accountability.

Effective regional coordination, comprehensive planning and rich data, however, are meaningless without financing. In the new fiscal climate of Vietnam, efficient mobilization and use of financial resources is a priority. An effective use of public resources should leverage private and ODA financing. To achieve that, key steps are establishing an overarching financing platform that can make available capital from various financing sources to priority climate-smart investments; . establishing an efficient budget allocation and execution system with robust and effective fiscal incentives for promoting regional investments; and creating an enabling regulatory environment for partnerships among provinces and with the private sector.

The private sector has a critical role to play in the development of Vietnam’s Mekong Delta. They can provide much-needed investment and expertise and will do so if there are appropriate incentives and risk-sharing mechanisms in place.  The potentials are great – a study by the International Finance Corporation released in 2016 illustrated how climate challenges could be turned into profitable business opportunities, particularly in sectors like renewable energy, climate-smart agriculture, green buildings, and sustainable transport.

While all the critical elements including institutions, information, financing and involvement of stakeholders are being addressed, it is essential to set in motion technical solutions for their core sectors, guided by low-regret or no-regret and climate-smart principles to policies and investments.

Decisions and commitments made today will determine the future of the Mekong Delta and its contribution to Vietnam’s political, economic, and cultural aspirations in the short-and long-term. Robust partnerships among government, development partners and private sector will help create a climate-resilient, prosperous, and sustainable Mekong Delta.

This piece first appeared in Vietnam Investment Review’s print edition.


Diji Chandrasekharan Behr

Senior Natural Resource Economist, Environment and Natural Resources Global Practice, World Bank

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