Vietnam’s development record over the past 25 years is remarkable. Economic and political reforms under Đổi Mới, launched in 1986, have spurred rapid economic growth and development and transformed Vietnam from one of the world’s poorest to a lower middle-income country.

Vietnam has enjoyed strong economic growth. Since 1990, Vietnam’s GDP per capita growth has been among the fastest in the world, averaging 6.4 percent a year in the 2000s.. Vietnam’s economy continued to strengthen in 2015, with an estimated GDP growth rate of 6.7 percent. Vietnam’s economic activity moderated in the first half of 2016, with GDP expanding by 5.5 percent, compared to 6.3 percent over the same period in 2015. This slow-down is considered a result of severe drought--affecting agricultural production--and slower industrial growth.

Growth has been equitable—with a dramatic reduction in poverty—and social outcomes have improved significantly. Per capita income in Vietnam has gone from around $100 in the 1980s to about $2,100 in 2015. Using the 2011 Purchasing Power Parity (PPP) line of $1.90, the number of people living in extreme poverty has dropped from about 50 percent in the early 1990s to 3 percent in 2012. Social indicators in Vietnam have improved substantially over the last decades, with several Millennium Development Goals (MDGs) achieved ahead of time. The Vietnamese population is better educated and today has a higher life expectancy than most countries with similar per capita income. The maternal mortality ratio has dropped below the upper-middle-income country average, while the under-five mortality rate has been reduced by 50 percent, now slightly above the upper-MIC average. Access to basic infrastructure has also improved substantially: Electricity is available to almost all households, up from less than half in 1993, and access to clean water and modern sanitation has risen from less than 50 percent of all households to more than 75 percent.

Notwithstanding past achievements, the poverty agenda still needs attention. Poverty gains are fragile, as a significant share of the population is still vulnerable, living close to the poverty line (one third of the population—equivalent to about 30 million people—fall into the ‘poor’ or ‘near poor’ groups). The poor and extreme poor are concentrated among ethnic minority groups. While representing only 15 percent of the population, half of the nation’s poor belong to ethnic minorities. Furthermore, these groups are highly vulnerable to shocks from climate change, natural disasters, as well as economic and health shocks.

Climate risks and challenge loom. Vietnam is highly vulnerable to climate change and natural disasters, posing significant risk to development gains and further progress. Already, Vietnam is experiencing rising temperature and sea levels, stronger storms, floods, and droughts. Average economic losses amount to 1-1.5 percent of GDP over the past two decades.

Progress on macroeconomic fundamentals but an unfinished economic modernization and structural transformation agenda While Vietnam has made progress in improving macroeconomic fundamentals, more time is needed to solidify gains and further structural reforms.

Enhancing international integration to broaden economic opportunities. Vietnam has boosted its international economic integration as it has signed a number of free trade agreements, including with the Eurasian Economic Union, the European Union, South Korea, and the Trans-Pacific Partnership. At the same time, the ASEAN Economic Community was established on December 31, 2015, and is likely to create more opportunities for the country to integrate further with regional and global economies. While global integration has advanced well with Vietnam embedding itself in global value chains, the benefits are constrained by the absence of linkages with domestic firms.

The Government of Vietnam has showed determination for reforms. Vietnam’s 2011 – 2020 Socio-Economic Development Strategy (SEDS) gives attention to structural reforms, environmental sustainability, social equity and emerging issues of macroeconomic stability. It defines three "breakthrough areas": (i) promoting human resources/skills development (particularly skills for modern industry and innovation); (ii) improving market institutions, and (iii) infrastructure development. In addition to the elaboration of three SEDS breakthrough areas, the five-year Socio-Economic Development Plan (SEDP) for 2011-2015 focused on three critical restructuring areas – the banking sector, state-owned enterprises and public investment - that are needed to achieve these objectives. The SEDP for 2016-2020, approved in April 2016, acknowledges slow progress on certain SEDP reform priorities and emphasizes the need to accelerate these reforms over the next SEDP period, 2016-2020, to achieve targets set out in the 10-year strategy.


Last Updated: Sep 26, 2016

The World Bank Country Partnership Strategy (CPS) is fully aligned with Vietnam’s SEDS and SEDP. Aligned with the government's overall strategic priorities and goals, the Bank’s Country Partnership Strategy (CPS) for 2012 - 2016 aims to support Vietnam’s three breakthrough areas of promoting human resources, improving market institutions and advancing infrastructure development. The CPS supports implementation of Vietnam’s SEDP 2011-2015, including selected elements of Vietnam’s transition in four areas:

·       From a lower-middle-income country to a successful middle-income country;

·       From an agrarian economy toward one that is more urban and industrialized;

·       From a focus on quantity to a focus on quality of production and services;

·       And from a comparative advantage of low-cost labor, with low value added, to one with growing innovation and higher value-added production and services.

World Bank Group support for Vietnam has been aligned with the WBG twin goals of eliminating extreme poverty and boosting shared prosperity. Vietnam is a signature example of a country in recent times that has achieved rapid growth without a large increase in inequality. Thus, in Vietnam, the twin goals agenda suggests enhanced attention to four priority themes:

(i) Supporting a return to strong and inclusive growth; (ii) giving more focused attention to non-income dimensions of poverty; (iii) targeting communities that are getting left behind, notably ethnic minority communities; and (iv) addressing sources of vulnerability.

The CPS program supports investments and policies organized into a strategic framework of three pillars and three cross-cutting themes. The pillars are: (i) strengthening Vietnam's competitiveness in the regional and global economy, (ii) increasing the sustainability of Vietnam’s development, and (iii) broadening access to opportunity. Key cross-cutting themes are (i) strengthening governance, (ii) supporting gender equity, and (iii) improving resilience in the face of external economic shocks, natural hazards and the impacts of climate change.

With new challenges emerging in the poverty agenda – such as rising inequality, urban poverty, and concentration of poverty in remote ethnic minority communities – the CPS includes a renewed commitment to poverty reduction, including better understanding of Vietnam's shifting poverty dynamics, and to new targeted poverty interventions informed by this understanding.

Governance, gender, resilience are key cross-cutting themes for the World Bank CPS. All operations are viewed through governance and gender lenses at an early stage of preparation in order to seize opportunities for strengthening support in these areas. Resilience emerges as an important theme in light of Vietnam's greater vulnerability to shocks on several fronts: external shocks at both the macroeconomic and household level, as well as natural hazards and climate change. The CPS supports a strengthening of Vietnam's resilience on these specific issues in the respective pillars of the framework.

The Progress and Learning Review (PLR) of the WBG CPS conducted in 2015 showed that the SPC remained highly relevant to the country’s development challenges as laid out in the SEDS and SEDP, and to the objectives of promoting poverty reduction and shared prosperity. Significant progress has been made on the CPS objectives and outcomes. A Completion and Learning Review (CLR) is under preparation, together with a new Vietnam Country Partnership Framework.

The Vietnam Systematic Country Diagnostic 2016 (SCD) identifies specific strategic priorities that would support Vietnam in eliminate poverty and boost shared prosperity. Titled “Sustaining Success – Priorities for Inclusive and Sustainable Growth,” the report highlights achievements and challenges in sustaining inclusive growth and job creation, inclusive service delivery, and sustainable management of natural assets and environment. The report serves as the analytical underpinning for the next chapter in the evolving partnership between Vietnam and the World Bank and helps direct financial and knowledge resources to the most pressing development challenges.

Vietnam aspires to become a modern and industrialized nation by 2035. Motivated by these aspirations, the Government of Vietnam and the World Bank Group jointly prepared the Vietnam 2035: Toward Prosperity, Creativity, Equity and Democracy report that gives further shape to Vietnam’s aspirations, highlights the key development challenges that remain, and outlines a series of policy recommendations to help Vietnam achieve its 2035 goals. The Vietnam 2035 report recognizes six key transformations: (i) to enable economic modernization with a competitive private sector firmly in the lead; (ii) to improve the country’s technological and innovative capacity; (iii) to reshape urban policies and investments for more dynamic cities and urban centers; (iv) to chart an environmentally sustainable development path with increasing adaptation and resilience to changing climate patterns; (v) to promote equality and inclusion among marginalized groups for the development of a harmonious middle- class society; and (vi) to establish a modern rule of law state and a democratic society.


Last Updated: Sep 26, 2016

Vietnam is transitioning to a market-based economy. The Bank’s partnership with Vietnam since 1993 has contributed to achieving notable results.

As of September 2016, the World Bank has provided $22.5 billion in grants, credits and concessional loans to Vietnam. Vietnam's existing portfolio consists of 50 IDA/IBRD operations and four stand-alone trust funds projects, with total net commitments of almost $9.9 billion.

Vietnam received the first loan from the IBRD, the Bank’s lending arm for middle-income and poorer creditworthy countries, in 2009 to support a program of public investment reforms. By now, IBRD has committed more than $3.3 billion to Vietnam, helping the country advance more quickly on its development path.

Urban upgrading programs have improved the living conditions of millions of urban poor. In many cities, low-income areas faced frequent flooding and had poor sanitation, causing serious health and environmental risks. The Vietnam Urban Upgrading Project addressed those challenges in Hai Phong, Nam Dinh, Ho Chi Minh City and Can Tho, benefiting 7.5 million people. The project also provided 95,000 micro loans for households whose incomes were in the bottom 40 percent for home improvement and income generation. (Read the story and watch the video)

Urban sanitation remains a priority area for support in the urban sector. The Ho Chi Minh City Environmental Sanitation Project has helped transform the city, directly benefitting more than 1.2 million people with improved sanitation and reduced flooding while at the same time serving as a new city. (See the story and video) The Coastal Cities Environmental Sanitation Project provided drainage, wastewater collections and treatment plants as well solid waste management facilities and conducted a comprehensive capacity building program, benefiting 800,000 citizens in Dong Hoi, Quy Nhon and Nha Trang. (Read the results brief).

Forest plantations have brought strong social, environmental and economic benefits to local communities. From 2005 to 2015, more than 43,000 households in six provinces in central Vietnam have received access to micro finance and technical support to establish more than 76,500 hectares of forest under the Forest Sector Development Project. The project is the first, and to date, the only one in Vietnam using the approach of lending to small-holder plantations, which proves to be much more sustainable compared to the country’s traditional approach of subsidizing plantations. (Watch the video and view slideshow)

Access to rural credit services has improved significantly. Over the past decade, a growing number of rural households gained access to credit – for farming and small business activities – for the first time. The Bank’s First, Second and Third Rural Finance Projects contributed to this trend, as well as to the strengthening of several rural financial institutions. The last two projects financed more than 535,000 sub-projects, leveraging total investments equivalent to $1.23 billion and generating new sources of employment. More than a third of the borrowers in the third project accessed formal financial institution credit for the first time, and more than half of the borrowers were women. (See video and story)

Water supply and sanitation facilities have expanded. Urban water supply has doubled in small towns to 60 percent between 2006 and 2009 and rose from 75 percent up to 95 percent in cities for the same period. Rural access to clean water has seen an increase from 36 percent to 70 percent between 1999 and 2009. The World Bank has helped support this development through investments in rural water and sanitation in the Red River Delta Region, and through innovative programs such as the Global Output-Based Aid funded project in partnership with the East Meets West Foundation. Between 2005 and 2013, the Red River Delta Rural Water Supply and Sanitation Project provided access to clean water for nearly 1.3 million people in four provinces through community-based approaches. Households received access to low-interest loans to build or rehabilitate more than 48,000 hygienic toilets and sanitation facilities, increasing the percentage of households with hygienic toilets from 25 percent to 87 percent. (See the video and story)

Disaster early-warning and forecasting capacity and integrated disaster risk management has been improved. Implemented in 12 provinces, the Disaster Risk Management Project helped construct 11 major flood and storm mitigation infrastructure projects such as safe harbors, river dykes, evacuation roads and drainage pumping stations. More than 210,000 villagers in 30 communes implemented structural measures, including multi-purpose evacuation centers and drainage canals, along with non-structural measures such as the development of Safer Commune Plans and evacuation drills. (View the story and photo slideshow)

Electricity now reaches 95 percent of the population. Every day for the past ten years in Vietnam, 9,000 people have been connected to the grid for the first time. The country doubled its power generation capacity from 12,000 megawatts (MW) in 2005 to 25,000 MW in 2010. Under the Second Rural Energy Project, more than 2.7 million people in some of the poorest parts of Vietnam gained access to electricity as 555,327 households were connected to the national grid. (Watch the video)

Over 90 percent of the population is now connected by all-weather roads. Working in 33 provinces, the Third Rural Transport project is reaching some of the most difficult mountainous regions of Northern Vietnam, linking poor and marginalized communities to better markets and services. Averaging 4.5 percent  of GDP investment, Vietnam is the leading investor in Asia in its roads infrastructure as it makes space for the economy to grow, allow cities to expand  and lift the remaining population out of poverty. (Watch the video)

95 percent of motorcycle riders now wear a helmet. With 6.5 fatalities per 10,000 vehicles/year, more than six times the number in Japan, accidents on Vietnam’s roads are a major contributing factor to a national injury crisis. Addressing one of the highest accident rates in the world, the Vietnam Road Safety Project is working to bring health, education, police and highway agencies together to save lives.

Improving living standards in remote mountainous areas. Under the first Northern Mountains Poverty Reduction Project, 353,871 households have benefitted from improved health care and more than 118,000 households have access to clean water, significantly improving the health of local people. A follow-on project has built on these earlier gains and also strengthened community disaster risk preparedness and pilot market linkage service initiatives. Participating households’ income has increased at least 10 percent higher than the average of those in other communes outside of the project areas. Almost 80 percent of common-interest farming groups claimed to have better access to market information and to achieve higher productivity. (See the story and video)

Primary school enrollment reached 99 percent of eligible children, and school attendance ratios for boys and girls have largely been equalized. The proportion of primary students in full day programs doubled from 25 percent in 2005 to 50 percent nationwide. Children in disadvantaged districts increased enrollment to 94 percent (compared to 97 percent nationally) while girls’ enrollment in secondary school now exceeds boys at 78 percent  to 77 percent. Personalized lessons brought a more hands-on approach to learning for ethnic minority students in 49 primary schools. The New School model, which used innovative teaching and learning practices in the classroom, has been piloted in 1,447 primary schools in all 63 provinces. After three years’ of project implementation, another 2,000 primary schools have volunteered to apply the model. (See the video and story)

Health conditions and access to health services have been improved. Thanks to the Mekong Regional Health Support Project, an estimated 16 million people in the Mekong Delta region are benefiting from improved health services and facilities. Of those, 2.5 million people also have better access to health insurance. About 10,000 health workers have received health-related courses and additional training to meet the region’s demands. The HIV/AIDS Prevention Project has significantly contributed to keeping Vietnam’s HIV/AIDS prevalence rate below 0.3 percent of its population. (Watch the video)

Higher education institutions enjoy greater autonomy and hold greater accountability. A series of three development operations supported the formulation of a new legal framework that  provides a greater level of autonomy to higher education institutions and increases their accountability, such as deciding on the number of students; training content; opening new programs; staff recruitment and retention; disclosing annual reports on financing, and staffing and learning outcomes. (Read the results brief)

Women’s rights to land titles increased. Following the success of two World Bank-supported pilot projects in the early 2000s, the government passed a Land Law making it mandatory for all land titles to be issued jointly in the names of husbands and wives (watch the video). The Bank-supported Vietnam Land Administration Project aims to issue some 5 million jointly held land titles by 2013.


Last Updated: Sep 26, 2016


Vietnam: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments