Growth and governance reform ‘key to building on Vietnam’s development gains’

24 Feb 16

Vietnam’s economy will need to grow by 7% a year and average incomes rise to over $7,000, up from $2,000 in 2014, if it is to achieve its ambition of attaining upper-middle-income status in two decades time, according to a joint report from the World Bank and Vietnamese government.


Hanoi, Vietnam's capital city

Hanoi, Vietnam's capital city


The construction of transparent and modern state institutions will also be key to its future success, the Vietnam 2035 report said.

World Bank president Jim Yong Kim said Vietnam had risen from poverty to become one of the world’s development success stories.

“On the strength of a nearly 7% average growth rate and targeted government policies, tens of millions of people have lifted themselves out of extreme poverty,” he said.

“Improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth. It will be critically important to remove barriers that exclude marginalised groups and deliver quality public services to an aging and urbanising middle-class.”

Vietnam’s planning and investment minister Bui Quang Vinh agreed that the country was at a turning point

“To reach our goal of a becoming a prosperous, creative, equal and democratic Vietnam, our only choice is to implement the reforms recommended by the Vietnam 2035 report. Without these reforms it will be hard for us to avoid falling into the middle-income trap and lagging behind.”

The report identified public sector effectiveness as one of three pillars that will be crucial to Vietnam’s future development.

In particular, the country should focus on adopting a more unified government structure that more clearly defines the economic functions of the state, reduces its role in direct production and clarifies the boundaries between the public and private spheres. Accountability also needs to be strengthened with checks and balances introduced between the three branches of government and citizens need to be given opportunities to provide feedback on service delivery.

The second development priority highlighted by the report is equity and social inclusion, with Vietnam offering greater opportunities to women, minorities and disabled people. Half of the country’s poor people are from ethnic minorities, despite making up only 15% of the population.

The third is improved productivity and economic competitiveness, with an emphasis on improving competition, protecting property rights and introducing more effective regulation.

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