Water Journal : Water Journal June 2015
24 AWA News WAter June 2015 WATER FOR ECONOMIC PROSPERITY IN VIETNAM: MAKING THE RIGHT CONNECTIONS Paul Smith, International Manager, reports on the Australian Water Association’s program to foster closer economic, technical and operational co-operation between Vietnam and Australia. There has been a recent shift in Australia’s development co-operation in Vietnam, from a relationship based on aid to one that strengthens its focus on trade and investment, by helping to improve the business climate and expand the scope of opportunities for mutual benefit. The Australian Water Association, along with our project partners in Vietnam, has now commenced a series of initiatives designed to support this transition and showcase the depth and breadth of Australia’s water expertise and technological innovations. With support from Australia and New Zealand Banking Group (ANZ) , the Department of Foreign Affairs and Trade (DFAT) and Austrade, the program will guide improved performance of water and wastewater services in Vietnam. It will foster closer economic diplomacy between the Vietnamese and Australian water sectors, focusing on three critical sector issues: • Strengthening the governance, financial and investment structures of the Vietnamese water sector; • Strengthening the role of the private sector; • Trade promotion and capacity building. “Australia has developed world-leading capabilities in water management, in particular during the millennium drought which affected most parts of the country for the best part of a decade,” says Katherine Tapley, Director, Structured Export Finance, Global Markets & Loans, Australia & New Zealand Banking Group Limited. “As part of our commitment to sustainable finance, we believe this partnership will help disseminate Australian expertise in key markets identified by AWA and where ANZ has operations, as well as leverage private sector involvement in aid-funded water projects.” Vietnam: a deVelopment journey Political and economic reforms launched in 1986 have transformed Vietnam within a quarter of a century from one of the poorest countries in the world to a lower-middle income country. Water, and the efforts of many to reform its management, has played a vital role in this. However, water infrastructure and services have often not kept pace with economic development, threatening to hold back further equitable growth and sustainable development. Ageing water supply systems struggle to cope with rapid growth in demand, and environmental management services are not adequately dealing with the final treatment and disposal of liquid or solid waste. Rising sea levels and new extremes in drought and flood events are compounding the challenges facing the Vietnam water sector. The causes are well documented and solutions now focus on improving the capacity and financial autonomy of provincial utilities, including the ability to recover costs from customers. As Vietnam moves towards a market-based economy, new ways of financing and delivering water and sanitation infrastructure are being pursued by the Vietnam Government. opening doors to inVestment and technological innoVation Since the early 2000s, Vietnam has opened its economy to international markets. In July 2006, Vietnam updated its intellectual property legislation to comply with world standards, and it became a member of the WTO in January 2007. Vietnam is now one of Asia's most open economies and Australia is one of Vietnam’s key trading partners. Vietnam has been rising as a leading agricultural exporter and an attractive foreign investment destination. Accordingly, the Vietnamese Government has set ambitious targets for urban, industrial and rural growth. In Hanoi alone, there are 107 industrial zones that have been earmarked for 100% centralised water and wastewater systems. Servicing expanding populations of Vietnam will require continued major capital expenditure and technological innovation. The Government of Vietnam is now looking for private investors to provide the capital required, and private service providers and technological innovators to enter the market. ANZ, one of the Australian Water Association’s major partners, is a natural fit in supporting this transition. In February 2015, the Government of Vietnam released a Decree that sets out the legal framework for Public-Private Partnerships and private investment, including in water. This is a significant development for attracting private capital; the task now is to strengthen the institutional frameworks and regulations so they support private sector confidence and participation. international The Australian Ambassador to Vietnam, Hugh Borrowman (centre), with representatives from the Australian Water Association, AnZ and the Australian embassy in Vietnam. Dinner with the Ministry of Agriculture and Rural Development and VWSA.
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