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Opening Remarks by Mr Kamal Malhotra United Nations Resident Coordinator, UNDP Resident Representative, Vietnam at National Conference on Sustainable Development 2018

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Event: National Conference on Sustainable Development 2018

Date: July 5, 2018

Venue: Melia Hanoi Hotel, 44B Ly Thuong Kiet St., Hanoi, Vietnam

  • Dr. Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI) and Co-Chair of Vietnam Business Council for Sustainable Development,
  • Mr. Ousmane Dione, World Bank Country Director,
  • Excellencies,
  • Ministry and Provincial leaders and representatives,
  • Ladies and Gentlemen,

I am honored today to address the distinguished participants at the National Conference on Sustainable Development. The National Council for Sustainable Development and Competitiveness Improvement and the Vietnam Business Council for Sustainable Development of the Vietnam Chamber of Commerce and Industry have made commendable efforts in bringing together leaders and decision-makers from the public and private sectors, both nationally and internationally. We are here to determine how best we can federate our actions towards sustainable and equitable development.

This conference is therefore critical in taking forward our joint efforts to achieve the United Nations' and global community's Agenda 2030 for Sustainable Development in Viet Nam. In fact, the development of an "Action Plan of the Government and the Private Sector on Enhancing Productivity and Competitiveness for Sustainable Development in the backdrop of Industry 4.0" will prove to be an essential instrument in those efforts. This Action Plan should complement and enrich national strategies aimed at "Leaving No One Behind", such as the National Action Plan to implement the Sustainable Development Goals.

Distinguished Guests,

It is important to take a step back to determine how best our joint efforts can have a positive impact on the lives of the Vietnamese people. As the United Nations, we are delighted to see Viet Nam take action towards a "Whole of Society" approach for sustainable development. This is very well demonstrated by the rich and diverse gathering under a common agenda here today.

The 2030 Agenda for Sustainable Development and the 17 associated Sustainable Development Goals, are framed by the 5 P's of sustainable development – people, prosperity, partnership, planet and peace. This agenda shifts the emphasis of business from a focus on profit to working towards collective prosperity. Likewise, Governments are called to work under a "Whole of Government" approach to most efficiently use national resources. Underlying all these efforts is the principle of "Leaving No One Behind".

Agenda 2030 cannot be attained by Governments alone, it requires the active participation of all members of society. Moreover, these goals can only be achieved with sufficient and coordinated financial investment. We, therefore, anticipate that the Action Plan on Enhancing Productivity and Competitiveness for Sustainable Development will also propose financing strategies that seek to attract sources of appropriate financing, including public and private, domestic and international.

Distinguished Guests,

What I have just outlined is the bigger picture context. The theme of today's sustainable development conference highlights Industry 4.0 as a key underlying factor. New technologies are transforming the way we produce, work, learn, and live throughout the world. Our economies are changing. This includes new forms of proprietary rights, new modes of governance, and new business models. How we adapt and transform these realities into opportunities is the fundamental question we must pose.

Industry 4.0 is bringing widespread automation and irreversible shifts in the structure of jobs. Millions of jobs could soon be performed by machines; and that means that millions of workers, disproportionately women workers, will need new skills to pursue new forms of work. Industry 4.0 may create new opportunities for economic, social and individual development, but it may also create new security risks, increase poverty and inequality, and lead to serious social challenges.

Estimates of the share of automatable employment vary widely, from 14% of all jobs in OECD countries, to nearly 50% of all jobs in the US. According to the McKinsey Global Institute, 9-32% of the total employment in developed economies could be displaced within the next decade.

In Asia, some 43 million people are employed in the garment, textile, and footwear industries, with women accounting for three-quarters of this total employment. For Vietnam, 86% of employees in textile and footwear sectors, which include 13.2% non-agricultural jobs, are facing considerable risk of joblessness. Notably, these sectors have facilitated female empowerment and lifted entire generations out of poverty. But what will Industry 4.0 in this sector mean for women in Viet Nam?

The automation and digitalization of production processes could mean a loss of comparative advantage in terms of low cost labour for Viet Nam. Consequently, it is highly crucial that Vietnam increases its productivity and competitiveness at all levels to strengthen its contribution and value added to global value chains.

As Industry 4.0 technologies are embedded into production processes, there will be a rapid and sustainable rise in productivity and competitive power. From this perspective, absorbing these technologies should be the window of opportunity for a future Vietnam if it is to become an engine of the new growth model. This will require a significant transformation in the current economic model.

Viet Nam's recent experiences since 'Doi Moi' have been remarkable. It has seen a dramatic reduction of poverty, sustained high economic growth rates, and high levels of exports, which together have contributed to its economic and social transformation. However, this transformation was from a very low economic base and can now only be sustained and taken to the next level if there is a consistent and simultaneous implementation of higher value-added productivity, appropriate institutional strengthening, and tailored and appropriate good governance policies. Viet Nam will therefore need to transform its economic structure from one based on resource-driven growth to one which is driven by high productivity-based economic growth if it is to avoid the middle-income trap or worse still, become stuck in a lower middle-income trap.

Ladies and Gentlemen,

While this debate is nascent, a number of solutions are being proposed and in some cases tested. Going forward, and being at the forefront of tomorrow's economy today, will require that policy and decision-making processes are more inclusive and deliberative in producing solutions that more closely reflect societal needs, boost economic competitiveness and inclusive growth, while creating jobs.

A Universal Basic Dividend, financed from returns on capital, would help citizens recoup or replace some of the income lost to automation. Taxes on robots are also being proposed to diminish income inequalities. Tax policies and other incentives can further be used to support the private sector's investment in labour training, especially by and for SMEs. Governments should also offer universal social benefits like health care, child care, and retirement security, as well as transition support to employees who are forced to change jobs.

Employees must be educated and trained to use increasingly high-tech tools; and redistributive policies should be introduced to maintain an equitable distribution of income. Employers and industry groups need to be in closer contact with educational institutions so that the skills they supply meet current and future demand. And, technology companies must do better at collaborating with manufacturers. Job mortgages and apprenticeship programmes, where companies support their staff with training and acquiring new skills, could also provide important avenues for potential solutions.

Cheap and semi-skilled labour are no longer a strategic advantage in the global economy, nor are tax incentives in special economic zones, if they ever have been. Policymakers should focus on policies, strong institutions, and strengthening education and adult-learning programs, for people who are left behind by the driving force of automation. These policies are best spearheaded by public-private cooperation. Women will also need to play a larger role in the formal economy compared to the informal economy if Vietnam is to benefit from a gender dividend.

Distinguished guests,

Today's conference is an important step in adapting our policies, strategies and actions in a concerted manner and in line with the inevitable shifts which are occurring in our economies.

As the 2030 Agenda requires the integration of all dimensions of sustainable development, new technologies should be used as an accelerator for SDG implementation and achievement. The UN in Vietnam will therefore continue to support integrated solutions which create significant opportunity for SDG attainment, including through the opportunities provided by Industry 4.0.

The UN Country Team in Viet Nam has been working closely with start-ups, entrepreneurs and technology innovators in Viet Nam to promote SDG Entrepreneurship, where businesses put achieving the Sustainable Development Goals at the centre of their business models. The SDG market, representing the potential amount of money that could be made by developing innovations that help achieve the SDGs, is expected to total USD 13 trillion by 2030, and we are encouraging businesses to explore more how they can both contribute to, and benefit from, helping achieve the SDGs.

Going forward, the domestic and international private sector in Viet Nam should play a key role in strengthening sustainable development, and should now be regarded as a full-fledged member of the social community.

Businesses have a responsibility to respect international standards, such as on human rights. The UN Guiding Principles on Business and Human Rights were published in 2011, and recognize that as the private sector has grown in its power and influence in recent years, so too has their impact on society, and with this growth comes increased social, economic and environmental responsibilities. We look forward to working with all stakeholders to move forward the business and human rights agenda in Viet Nam, including Government, civil society actors and business leaders.

Ladies and Gentlemen,

Let me conclude by saying that the UN in Viet Nam will continue to engage on and facilitate important policy debates as well as support the implementation of policies which ensure that no one is left behind. In this spirit, we have supported the Government in the preparation of its Voluntary National Review on the SDGs which will be presented by it at the High Level Political Forum in just over ten days in New York on 16 July 2018 to which I will accompany the Vietnamese delegation led by MPI.

I trust that through the active and fruitful discussions at this conference, you will be able to identify sound solutions, including innovative and concrete joint actions which should become the essential core of the new partnerships needed to fully achieve the Sustainable Development Goals before or by 2030.

Thank you! Xin Cảm Ơn!