Viet Nam Publishes its Mekong Delta Regional Master Plan – Opportunities for Aotearoa-New Zealand - July 2022

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Summary

  • Five years after it was first proposed, Viet Nam has launched its comprehensive Mekong Delta Regional Master Plan at a high-profile meeting led by Prime Minister Pham Minh Chinh in Can Tho, southern Viet Nam. The plan has a theme of “new thinking” and creates a platform for a step-change in the region’s agricultural, transport, energy and tourism sectors.
  • In public statements supporting the launch, Prime Minister Chinh emphasised the government’s commitment to sustainable development for the region. The government hopes the plan will spur substantial public private partnerships (PPP) and foreign investment.
  • The plan provides potential opportunities for New Zealand through climate finance; advice on agricultural innovation and technology as Viet Nam develops higher value horticulture and aquaculture projects; and also eco-tourism development in the region.
  • The World Bank, the Netherlands and Australia are also expected to be major partners in the implementation of the Plan.

Report

  • Viet Nam has now launched its Mekong Delta Regional Master Plan for the period 2021 -2030. Launched by Prime Minister Pham Chinh in Can Tho on 21 June 2022, the plan is the Government of Viet Nam’s comprehensive blueprint to boost the socio-economic development of the Mekong Delta area. Its key objectives are to transform the heavily rice-based agricultural sector to one more focused on higher value-added products, supported by an integrated regional transport hub and the construction of new industrial parks. The plan also calls for more effective water management and investment into projects to promote green energy, protecting the environment, and developing eco-tourism.
  • The Mekong region of Viet Nam covers 12 provinces and is home to 18 million people, about 19 percent of Viet Nam’s total population. Economic impacts from the pandemic and climate change have led to massive outward migration from the region (37 percent of all internal migrants in Viet Nam come from the Mekong provinces). Overall education levels in the Mekong provinces are low compared to other parts of Viet Nam. A trained labour force will be needed to implement the plan, with a particular need for more vocational training.
  • The Mekong Delta is Viet Nam’s food basket and is known for its intensive rice production and fertile soils allowing two to three harvests per year. Together the Mekong provinces account for almost 50 percent of Viet Nam’s rice production, and 70 percent of total fruit production. However, the region’s agricultural base is being impacted by rising sea levels, coastal degradation, increasingly long periods of drought, and salinity intrusion into previously high-yield crop areas. The agricultural sector is also quite fragmented and run largely by small-scale farmers. There is little local processing of primary produce and, when it comes to fruit, many of the potential end-products do not meet the expectations of major export markets (China and South East Asian neighbours).
  • The plan aims to correct this by promoting quality over quantity and transitioning from intensive rice farming to aquaculture and higher value fruit and vegetables. Viet Nam’s many bilateral and regional trade agreements will also play an important role, according to the government – most critically in reducing tariffs on higher value products. FTAs have also proven to be a boon for Viet Nam’s exporters in the past when sufficient knowledge transfer to producers has been provided.
  • A key feature of the plan is the development of enhanced and comprehensive infrastructure which is needed to increase trade and connectivity in the region. This includes the construction of new roads and highways, expansion of airports and development of inland waterway cargo and logistics hubs. The plan sets out a commitment to ensure development takes place in a sustainable and environmentally friendly manner. This includes a commitment to clean and renewable energy, with wind and solar power projects to be developed, and gas-fired power projects under way by 2030.
  • Water management will be another key element of the plan, to counter the growth of brackish areas and over extraction of fresh ground water which has led to extensive land subsidence. Coastal zones and the Delta’s fresh water have to be protected, and new sea dykes are needed along with coastal mangrove reforestation.
  • The plan also aims to make the Mekong Delta a prime international destination for eco-tourism, centred on regional attractions and the culture of its ethnic minority communities. Can Tho and Phu Quoc will be developed into tourist hubs, with Can Tho’s airport upgraded so it can accommodate A320s and other long-haul aircraft.
  • If the plan realises all of its objectives, it is hoped that the Mekong regional economy could grow at an average rate of 6.5 percent annually, with its regional GDP in 2030 being double what it was in 2021.
  • The Government of Viet Nam will now move to working with stakeholders on an implementation plan, including setting timeframes and identifying partners such as the World Bank and aid donors including the Netherlands and Australia.
  • There are opportunities for New Zealand to contribute to the implementation of the plan, including through climate finance projects and private investment in sustainable agriculture; agro-tech; eco-tourism consultancy; and expertise in countering the effects of climate-related change, such as coastal erosion and seawater intrusion.

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Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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