Vietnam 2030 Overview

After 30 years of economic reforms since the launch of Đổi Mới in 1986, Vietnam has recorded significant and historic achievements. From a poor, war-ravaged, centrally planned economy, which was closed off from much of the outside world, Vietnam has become a middle-income country with a dynamic market economy that is deeply integrated into the global economy. Vietnam’s economic growth has not only been rapid, but also stable and inclusive, translating into strong welfare gains for the vast majority of the population. This is an impressive record of success—one that the Vietnamese people take justifiable pride in, while appreciating the support of the international community (World Bank Group, 2015)

Vietnam 2035 structures these transformations and the reform agenda around three key pillars: balancing economic prosperity with environmental sustainability; promoting equity and social inclusion; and enhancing the capacity and accountability of the state.

Pillar 2 Equity and Social Inclusion

Equity is a deeply held value of the Vietnamese people. The preamble to the Constitution of the Socialist Republic of Vietnam sets the goal of “a prosperous people and a strong, democratic, equitable, and civilized country.” And Article 50 stipulates, “The State shall create equal opportunities for citizens to enjoy social welfare.” Vietnam’s economic growth, particularly in the 1990s, rested heavily on the equitable distribution of land-use rights in the early years of Đổi Mới, driving a rapid increase in agricultural production. The government channeled substantial resources from this growth to fund pro-equity spending, which helped the country avoid the spike in inequality experienced in some other fast-growing countries. But past performance is no guarantee of future results, and signs of growing inequality are emerging. Looking to 2035, Vietnam faces a dual agenda: one unfinished, for equality of opportunity, and one emerging, for a rising middle class and aging population. Underpinning both agendas is the need for a new vision of social policy. Historically, and especially in planned economies, social sectors have been considered “nonproductive.” This view is changing. The social sectors are very much productive and becoming increasingly central to realizing the goals of knowledge-based and globally competitive upper-middle-income countries. Education contributes to productivity growth. Labor-market institutions balance productivity growth and societal welfare. Reforming the hộ khẩu system can help realize the full potential of structural change from low-productivity rural employment to formal-sector urban work. An adequate social safety net allows people to take entrepreneurial risks with the confidence that they will not face destitution if their business fails. And universal health coverage ensures that people are productive students and workers, channeling otherwise high precautionary savings to more productive uses. (World Bank Group, 2015)

Pillar 3 A Capable and Accountable State

How should international experience be interpreted in light of Vietnam’s positive record on growth and poverty reduction? Has the quality of its institutions kept pace with its economic and social progress, and can they support sustained progress in the future? These questions first require delving further into the various components of institutional quality and comparing Vietnam with other middle-income countries.

Building on the nation’s extraordinary record of success and energized by the aspirations of a rising middle-class society, contemporary Vietnamese leaders are charting a bold and ambitious future. Their ambition is emboldened by the opportunities that continue to unfold for Vietnam with greater regional and international integration, including through the ASEAN Economic Community and the TPP. In the 2035 vision, Vietnam will be at the higher reaches of upper-middle-income status. It will be a modern, creative, equitable, open, and democratic society with clear blue skies, clean water, and equal access to opportunities for all its citizens. This vision also foresees a state rooted in the rule of law with clear roles for the state, citizens, and the market; economic freedoms ensured by strong market institutions; and robust mechanisms to hold the government to account. (World Bank Group, 2015)

Vietnam is at a turning point on its development path. There are tremendous opportunities on offer, as well as major challenges and difficulties. To achieve the 2035 vision, the only viable choice is for the country to carry out a bold program of reforms that is consistent with the three pillars. Without this, Vietnam will find it very hard to avoid the “middle-income trap” and will fall well short of its significant potential. Current and future generations of Vietnamese people have the strong will, the spirit, and the capacity to implement the reform agenda successfully and to move toward a prosperous, creative, equitable, and democratic Vietnam (World Bank Group, 2015)