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Interview with Captain Nitin Agarwala: “Maritime Sector as a Growth Engine for Vietnam”


The Journal of Territorial and Maritime Studies recently spoke with Captain Nitin Agarwala about his article “Maritime Sector as a Growth Engine for Vietnam,” published in the Summer/Fall 2021 issue of JTMS. Captain Agarwala’s article reviews the accomplishments and setbacks of free-market reforms in Vietnam, known as Đổi Mới. The reforms span from the 1980s, beginning with the privatization of state-owned enterprises to the development of investments “to help turbo-charge Vietnam’s coastal economic growth.” The article examines how countries such as Vietnam can transform from isolation to a country that seeks economic development from its maritime sector, as well as the lessons countries can learn from Vietnam. Captain Agarwala was willing to answer questions regarding Vietnam’s trajectory towards UN sustainable development goals, the development of waterways to improve transport, how conflict has interfered with development as well as how the tourism industry has responded to the COVID-19 pandemic.

 

Is Vietnam on track towards sustainable development, as the “Maritime Strategy Towards 2020” aimed to incorporate UN Sustainable Development Goals?


Vietnam through its sincere efforts, policy changes and focus towards SDG-2030 has made some serious improvements and advancements in their maritime industry. While these efforts are positive steps towards achieving the SDG-2030, these steps can be best called as work-in-progress. The continuous struggle between sustainability and profitability were the prime reason for the ‘Maritime Strategy Towards 2020’ which continues. Overall, though Vietnam as a nation is on track to achieve 5 of the 16 SDG goals (poverty, hunger, quality education, climate action and global partnerships), its SDG 2030 goals of the maritime sector are still to be achieved.

This said, Vietnam lacks a specific document addressing marine waste and fishery management policies while some SDG targets have not been stipulated as part of legal documents. Over the years, nearly 67 per cent of the mangrove forests have been lost and reviving them is difficult and may not be feasible by 2030. Similarly, the current MPAs cover only 0.24 per cent of the total sea area of Vietnam as against 2-3 per cent as required by SDG-2030. Likewise, the economic efficiency of fish catching operation is decreasing due to unabated increase in fishing boats that concentrates in 11 per cent of the EEZ for their fishing.

While shortfalls in achieving the goals of Goal-14 of SDG 2030 exist, the overall achievements of Vietnam in the maritime sector to achieve its SDG goals are commendable and a lesson for most in the region.

Since some of the areas of Goal-14 remain unaddressed in Vietnam and are not likely to be met in the stipulated time of 2030, it may be incorrect to say that Vietnam is on track towards achieving its sustainable development goals by adopting the ‘Maritime Strategy Towards 2020’. It is opined that there may be yet another revision to this strategy since the nation is serious and determined to achieve its commitment, a lesson for others to learn and follow.


Is Vietnam currently prioritizing economic development over sustainability, as sustainability is a concern mentioned?


Like mentioned in the previous answer, there are some default areas where the economic development still takes priority over sustainability. However, when looked at holistically, to meet 5 of the 16 SDG goals is no mean achievement and must definitely be emulated by other nations.


As mentioned in the article, inland waterways are managed by both local governments and the Vietnam Inland Waterways Administration. Are there conflicts when it comes to funding or the execution of monetary aid to improve waterways for transport? How are funds distributed?


No, there are no conflicts between the GoV and provincial governments in managing the IWT as the bifurcation of responsibilities is rational and practical and accepted by the stakeholders. When talking of funds, the availability of funds for IWT is limited in Vietnam like any other nation and in general IWT has been neglected when compared to road transportation. As on date, the most important waterways of Vietnam are under the administration of the VIWA while the others are with the local government. Accordingly, the focus of funding too is towards the waterways controlled by VIWA.

When it comes to the provincial governments, they make decisions on resources extraction like dredging for sand and gravel, influence land availability for port development and provide the much required “last-mile” connectivity of roads to ports and landing-sites. Though the IWT laws require VIWA and the provincial governments to cooperate, the said coordination is not perfect. This has led to inadequate compliance and enforcement of navigation policies and regulations.

With regard to funding, the available funding for IWT has always been meagre as the major portion of the allocation has been spent on developing and maintaining the road infrastructure. Legally, the expenditure for IWT in Vietnam is to be provided through Official Development Assistance (ODA) which by and large is small. Accordingly, private investment has greatly increased for IWT with the administration role being retained by the central/ local government.

While the requirement of infrastructure development in IWT is essential, the available projects are minimal, lack studies and technical evaluation, a must for implementation.

In effect one can say that the focus remains primarily on the existing major routes and private sector investment rather than a centralised and focused effort for developing the IWT. This has been duly supported by under-investment in IWT and coastal shipping which has reduced competitiveness and increased the cost of landed goods and unpredictability.

Has Vietnam’s support for the “Marine Economy” led to additional provocations with China and other ASEAN countries?


As discussed in the article, Vietnam’s focus on ‘Marine Economy’ has provoked China especially in the SCS where the two countries have unresolved territorial disputes. This is disallowed Vietnam to achieve the full potential of the Marine Economy in the region especially in the areas of fisheries and hydrocarbons. While efforts to resolve these unresolved territorial disputes with China and other ASEAN countries have been made, there has been limited success wherein disputes still remain. Accordingly, differences with Malaysia and Thailand have been resolved while negotiations with China concerning the delimitation of the Tonkin Gulf have been completed.

Since conflicts disallow growth and development, it thus remains imperative that these disputes be resolved at the earliest to allow defending the citizens from natural disasters, protecting mangroves and corals, ensuring sustainable fishing, preventing pollution and climate change, and ensuring the development of a maritime economy for the prosperity of the people.


How has the tourism sector responded to the COVID-19 pandemic and what is the outlook for the industry in 2022?


Like any other country of the world, tourism business in Vietnam too has seriously suffered from the pandemic, and very few tourism-related enterprises were able to recover after the first wave of infection. By the close of the third-wave, most of the tourism business sectors were on the brink of bankruptcy or facing permanent shutdown. The tourism enterprise experienced a sharp drop in the number of customers and hence revenue, leading to employee downsizing. The impact was, however, different for different enterprises with the travel agents and the accommodation sector being the worst hit.

Domestic tourism in Vietnam recovered to some extent in the summer of 2020 due to inability to travel abroad, however, since tourism in Vietnam depends largely on international tourism (in terms of spending), travel restriction did not allow the industry to recover in full even though the spread of the pandemic was handled remarkably well by the administration.

While the pandemic has impacted the tourism industry negatively, it can be considered as a blessing in disguise as it will allow the sector to restructure and encourage transformation of the tourism value chain to make the entire industry sustainable. One possible method is for the tour operators to innovate (long-term strategy) rather than look at retrenchment or exiting (short and medium term strategy). This recovery would need to be initially supported by the government by ensuring survival of the operators, create attractive packages for specific segments of tourism, and boost adventure tourism. Such efforts would help the industry’s recovery by first aiming to capture domestic tourism and then gradually rebuild on international tourism confidence.

Studies on recovery of the tourism sector across the world have shown that in the post pandemic period, domestic tourism is likely to pick up earlier than international tourism due to the uncertainties the virus displays. If Vietnam were to focus on a zero-case-first policy (focus to open areas where the spread is low or negligible) there is a greater likelihood that some recovery for the tourism sector may be possible by 2024. However, all this is based on the premise that the virus does not spring any fresh variants.

JTMS would like to thank Captain Agarwala for taking the time to respond to our questions. Interested readers can find Captain Agarwala’s full article in the Summer/Fall 2021 issue of JTMS.

 

*** Captain (Dr) Nitin Agarwala is a serving naval officer with the Indian Navy. The views expressed herein belong solely to the interviewee and do not necessarily represent the opinions of JTMS or Yonsei Institute for North Korean Studies. ***

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