How Can Natural Resources Be Used Efficiently?

Vietnam has enjoyed two decades of strong economic growth. Government policy provides for a transition from a centrally planned economy toward one that is increasingly market-oriented, with a socialist orientation. Part of this is a process of devolution of decision making to lower levels of government. Aggregate population growth is not high, but people are moving rapidly into urban centres and leaving agriculture for industry and services.

 

Much of the economic growth has been fuelled by intense exploitation of natural resources. Utilization of land has intensified, water resources are increasingly stretched, natural forests have been logged, capture fisheries have depleted their resource base, and mineral resources are increasingly exploited. Besides, the overall growth of the economy, population growth, urbanization, and industrialization are all combining to increase water pollution, urban air pollution, and the extraction of natural resources.

 

Vietnam is already engaged in a dynamic reform process. Thus reforms have to be pursued with an eye to multiple and sometimes competing goals. There are also important gaps between theory and practice that need to be addressed. Good policies require adequate resources for successful implementation.

 

According to the WB, there is nothing wrong with using natural resources for economic growth. A focus within public management on enhanced data gathering, analysis, and public dissemination to support functioning markets as well as efficient public decision making and coordination. This will contribute to efficiency, environmental sustainability, and equity. Priorities in the short term include: Enhanced public transparency in land markets; improved water data collection to underpin rational watershed management under increasing competition for water; stringent data standards in forestry to allow for international transfers in support of carbon sequestration, sustainable forestry, and biodiversity conservation; an improved database to determine the status of marine fisheries and hence reasonable catch levels; and public disclosure of the results of environmental assessments of the impacts of mineral exploitation.

 

Also key is the assignment of clear and more-secure long-term property rights and an increase in the use of market prices to provide incentives for investment, growth, and decentralized solutions. This is fundamental for greater efficiency. Short-term priorities to enhance efficiency include: Modernizing land administration to lower transaction costs, improving irrigation efficiency, raising the yield in forest plantations, reforming marine subsidies so as not to encourage overexploitation of these resources, and creating more enabling conditions for the private sector to pursue opportunities in the minerals sector.

 

Besides, enhancing environmental regulatory implementation to close the gap between theory and practice; assigning values to the environment where markets fail to do so; scaling up of co-management schemes in forestry and marine resources and of payments for environmental services; and integrating climate change into public planning.

 

Community benefits sharing schemes, fair-market value compensation for property expropriation, improved information access, transparency in governance, and public participation should be taken into account. These are fundamental measures to ensure equity in natural resources management in Vietnam.