Viet Nam Working for green growth and climate change mitigation

Viet Nam has ambitious goals. It wants to become a high-income country (by the World Bank definition) by 2045. And it wants to achieve net zero emissions by 2050 – in other words, reduce harmful carbon emissions and remove unavoidable emissions from the atmosphere, for instance through natural carbon sinks such as forests.

A snack bar in Hanoi, Viet Nam — Straight to

Viet Nam's transformation from a centrally planned economy to a market economy since the 1980s has brought great economic progress. This transformation has helped to turn the country, within just three decades, from one of the poorest countries in the world into a middle-income country with a dynamic emerging economy.

Over that period, the poverty rate has fallen from about 30 per cent to less than two per cent of the population. The environment for private-sector activity and international investment has improved to a significant extent, and exports have developed well. However, this development has taken place at the expense of the environment and natural resources in Viet Nam.

In order to ensure that Viet Nam will remain attractive for international investors and markets and will be able to successfully continue its development path, modern environmental and social standards and a skilled labour force are becoming more and more important. The country will also need to ensure that regions that are particularly affected by structural change – such as coal mining areas and rural mountainous regions – benefit more from national development, and to ensure that women, ethnic minorities and other marginalised population groups will share in the fruits of technological progress.

Risk posed by climate change

Viet Nam has a long coastline and many river valleys. This makes the country particularly vulnerable to climate change. According to the Global Climate Risk Index, Viet Nam is one of the world's 20 most climate-vulnerable countries. The rise in sea levels that is to be expected and the increase in extreme weather events are already leading to serious consequences for the country's economic development. At the same time, the country is itself a source of growing greenhouse gas emissions. Since 2020, CO₂ emissions have risen sharply, not least as a result of the rapid and continuous increase in energy consumption.

In view of this, the Vietnamese government has decided to adopt a new strategy for green – that is environmentally and socially sound – growth. Internationally, Viet Nam has made a commitment to reduce its greenhouse gas emissions, especially by phasing out coal. The government has also entered into a Just Energy Transition Partnership with the G7 International Partners Group (IPG).

Through its development cooperation, Germany is supporting the country's efforts for the social and economic transformation that is needed to realise the vision of sustainable, climate-neutral, resilient and inclusive development in Viet Nam.

German development cooperation with Viet Nam

Svenja Schulze, Federal Minister for Economic Cooperation and Development

Following the reunification of North and South Viet Nam in 1976, East Germany forged close ties with the newly founded Socialist Republic of Viet Nam. After German reunification, the Federal Republic of Germany resumed bilateral development cooperation with the country in 1990. In 2011, Germany and Viet Nam agreed a strategic partnership, with a view to further expanding their political, economic, cultural and development cooperation ties.

As part of the BMZ 2030 reform process, Viet Nam, as an emerging economy, was given a stronger role, becoming what is termed a “global partner”. Cooperation focuses on working together in partnership to find answers to key global challenges, with the objective of achieving sustainable, climate-neutral, resilient and inclusive development. Focus topics of the two countries' cooperation are the provision of global public goods – such as climate action and biodiversity conservation, pandemic prevention and a stable world economy through sustainable supply chains – and multilateral cooperation.

The BMZ is supporting Viet Nam's efforts to ensure a socially just transition to climate-compatible economic activities and lifestyles. This cooperation focuses, for one thing, on targeted support for population groups that are particularly affected by structural change. Moreover, programmes are designed in such a way that women and marginalised groups (such as ethnic minorities) have a part in the activities and in the development gains made.

During the government negotiations in November 2023, the Federal Ministry for Economic Cooperation and Development (BMZ) committed 61 million euros in new funding for Viet Nam. 33 million euros of this has been earmarked for Technical Cooperation and 28 million euros for Financial Cooperation.

Development cooperation currently focuses on the following core areas:

Sustainable economic development, training and employment
Area of intervention: technical and vocational education and training
Climate and energy, just transition
Area of intervention: renewable energy and energy efficiency
Conserving nature and natural resources, protecting life on Earth
Areas of intervention: biodiversity, forests

During the government talks held in 2023, the two sides agreed to make the energy transition, forest conservation (including biodiversity conservation) and vocational training for green jobs the current priorities of bilateral cooperation. Along with these topics, the two countries are addressing a number of cross-cutting issues: fostering gender equality, promoting the private sector and working together with it, and tapping the potential which the digital transformation offers for sustainable development.

The BMZ is also involved in efforts to help improve governance in Viet Nam, especially with regard to the rule of law and legal certainty, and it is providing support for activities in the health sector, especially on pandemic prevention and One Health.

Apprentices in the welding workshop at a vocational school in Ho Chi Minh City (Saigon), Viet Nam

In order to ensure that economic growth is sustainable and socially equitable and in order to achieve competitiveness in regional and international markets, Viet Nam needs to further modernise its economy and train urgently needed skilled workers. The BMZ is assisting Viet Nam in enhancing vocational training and reforming the economy.

Maintenance work on a high-voltage power line in Vietnam

Viet Nam's growing economy means that demand for electricity is also growing at an enormous rate – and as a result, so are the country's greenhouse gas emissions. At the same time, Viet Nam is one of the countries that are particularly vulnerable to climate change. The BMZ is supporting Viet Nam's efforts for an energy transition and for adaptation to climate change.

A farmer with mangrove seeds and seedlings

The biodiversity and ecosystem services of Viet Nam's forests are very important both with a view to climate change mitigation and adaptation and with a view to sustaining rural people's livelihoods. The BMZ assists Viet Nam with regard to sustainable forest management and biodiversity conservation.