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It needs to choose between a business as usual path or a green recovery path to help address the impacts of future pandemics or climate and disaster risks and build a resilient future, from the viewpoints of WorldBank economists in the latest report.

Economists Give Out Policy Recommendations for Vietnam at Crossroads of COVID-19 Recovery
Photo Credit: Reuters
Today, Vietnam stands at a crossroads of COVID-19 recovery. It needs to choose between a business as usual path or a green recovery path to help address the impacts of future pandemics or climate and disaster risks and build a resilient future, from the viewpoints of WorldBank economists in the latest report. 
While the COVID-19 experience can inspire other countries in their fight against the pandemic, it can also help identify key lessons that can be applied to Vietnam’s climate and environmental challenges. 
While health and climate shocks differ in their impact on human lives and economic structures, they have also many similarities. Their costs will increase with inactions and both require significant changes in individual and collective behaviors.
The first lesson from COVID-19 is that the best way to cope with an external shock is to be prepared in advance and to move with early and bold action.
Arguably, Vietnam was ready to confront the pandemic, building on its experience of previous viral threats, as the preparedness level of its health system was above its peers and close to the one observed in most upper middle-income economies at the end of 2019. 
The country was also one of the first to close borders and schools, as early as the end of January. Drawing from this experience, Vietnam should move fast and get ready by becoming a champion of the green recovery in the aftermath of the COVID-19 pandemic.
Becoming a champion of a green recovery Vietnam will achieve multiple objectives. Beyond the obvious environmental gains associated with a green recovery, green policies and investments could also boost job creation and economic activity, as well as restore fiscal space. 
It would also be a smart business decision, as many of the multinationals that the country wants to attract are giving more attention to green policies due to their corporate responsibilities to their customers. Several policies and actions, as well as references to best practices, are proposed in the main text, with concrete examples in the areas of renewable energy, tourism development, and spatial development of cities and industrial zones, which are expected to play a pivotal role in Vietnam’s future development.
The second lesson is on the mechanics of implementation. Dealing with the COVID-19 pandemic, Vietnamese authorities have faced their greatest challenge in decades. They have been forced to make and implement crucial decisions under severe pressure, which has required a common vision, a capacity and a motivation to experiment and innovate. 
The immediate priority for the government should therefore be to follow this example and create additional space for experimentation and innovation through the application of the following four principles derived from the COVID-19 experience:
Smart incentives should be used to motivate people, businesses, and government officials.
Fear of sanctions matters.
People need to trust policymakers, policymaking, and institutions, which, in turn, depends on the government’s own behavior.
There should be clear, broad, and transparent communication about not only actions but also results so they are seen to be in the best interest of all.
Concrete examples of how these principles can be applied to Vietnam’s environment and climate agenda will be found in the main text and include reforms ranging from pricing policies to stateowned enterprises, and transparent information sharing mechanisms that will identify and monitor main polluters and rule breakers.
Ultimately, coping with health or environmental threats is about changing behaviors. The optimal and perhaps most straightforward way for Vietnam to communicate the urgency of the environmental and climate challenges would be to reconsider using gross domestic product as it metrics of economic performance or to broaden it to include natural capital as suggested by the World Bank. 
Traditional indicators, by failing to account for environmental damage and degradation, provides an excessively rosy picture of the economy. As stated by former
World Bank Chief Economist and Nobel Laureate Joseph Stiglitz: “Getting the measure right – or at least a lot better—is crucially important, especially in our metrics- and performance-oriented society. If we measure the wrong thing, we will do the wrong thing. If our measures tell us everything is fine when it really isn’t, we will be complacent.”

DIEP NGUYEN