Overview

  • Over the past 30 years, Vietnam has had a remarkable development record. 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 nations to a lower middle-income country.

    Vietnam’s economy continues to show fundamental strength, supported by robust domestic demand and export-oriented manufacturing. The extreme poverty rate is estimated to have declined to below 3 percent. Following 6.8 percent growth in 2017, preliminary data indicate that GDP growth accelerated to 7.1 percent in 2018, underpinned by a broad-based pickup in economic activity.

    Vietnam’s medium-term outlook is broadly favorable, and downside risks are tied to weak external demand, shifting trade patterns, global financial volatility, and incomplete banking and state-owned enterprise (SOE) reforms. On the upside, Vietnam is strongly positioned to benefit from numerous free trade agreements that are coming into force now and over the forecast period.

    Vietnam’s growth is projected to moderate to 6.6 percent in 2019, driven by credit tightening, slower private consumption and weaker external demand. Inflationary pressures are projected to remain moderate, due to subdued global demand conditions and moderate global energy and food prices. Over the medium term, growth is projected to stay around 6.5 percent, as the impact of current cyclical uptick dissipates. Poverty is expected to decline further, as labor market conditions remain favorable.

    Vietnam is experiencing rapid demographic and social change. Its population reached about 97 million in 2018 (up from about 60 million in 1986) and is expected to expand to 120 million before moderating around 2050. Currently, 70 percent of the population is under 35 years of age, with a life expectancy of nearly 73 years. But the population is rapidly aging. There is an emerging middle class—currently accounting for 13 percent of the population but expected to reach 26 percent by 2026.

    Over the last thirty years, the provision of basic services has significantly improved. Vietnam is today a significantly more educated and healthy society than 20 years ago, and these qualities are equitably distributed. Coverage and learning outcomes are high and equitably achieved in primary school—evidenced by remarkably high scores in the Program for International Student Assessment (PISA), where the performance of Vietnamese students exceeds that of many OECD countries.

    Vietnam is ranked 48 out of 157 countries and territories in terms of human capital index (HCI), second in ASEAN behind Singapore. A Vietnamese child born today will be 67% as productive when she grows up as she could be if she enjoyed complete education and full health.

    Access to household infrastructure has improved dramatically. In 2016, 99 percent of the population used electricity as their main source of lighting, up from 14 percent in 1993. Rural access to clean water has also improved, up from 17 percent in 1993 to 70 percent in 2016. Access to these services in urban areas is above 95 percent. 

    Gender gaps are narrowing. In 2015, female-headed households in Vietnam were less likely to be poor than male-headed households and primary and junior secondary school net enrolment rates are practically equal for boys and girls. There are more female students attending school than male at the upper secondary and tertiary education levels. From 1990 to 2015, the maternal mortality rate fell from 233 to 58.3 deaths per 100,000 live births and infant mortality dropped from 44 deaths per 1000 live births to 15—with no difference between male and female infants. Women’s economic empowerment has also steadily improved in Vietnam over the past decade. Women’s labor force participation rate is within 10 percent of that of men, a smaller gap than that found in most other countries. In addition, there has been an upward trend in the share of women in wage work, mostly driven by increased employment opportunities for women in foreign-owned export-oriented factories.

    Nevertheless, some gaps persist—particularly pertaining to women’s access to high level leadership positions and women ethnic minorities.

     

    Last Updated: Apr 24, 2019

  • The World Bank Group Country Partnership Framework (CPF) for Vietnam guides the Bank Group's engagements in the country from 2018 to 2022.

    Endorsed on May 30, 2017, and reflecting and building the priorities identified and expressed in the World Bank Group's 2016 Systematic Country Diagnostic, the Vietnam 2035 Report, and the Government of Vietnam’s 2016-2020 Socio-Economic Development Plan (SEDP), the CPF has four prioritized areas:

    • Enable inclusive growth and private sector participation;
    • Invest in people and knowledge;
    • Ensure environmental sustainability and resilience;
    • Governance.

    Building on the World Bank Group’s continued strong engagements in Vietnam, the CPF introduces a number of strategic shifts that will guide the Group’s work going forward:

    • Comprehensive engagement to strengthen private sector development and participation across sectors;
    • Support to achieve the financial sustainability of public services and transfers;
    • Support to poverty reduction amongst ethnic minorities, through livelihood and income generation activities;
    • Multisector engagements to strengthen linkages between education and the labor market; and
    • Promote and stimulate low carbon energy generation.

    The World Bank Group is currently concluding a Performance and Learning Review (PLR) of the CPF—which takes into account and responds to lessons learned and changes in the country context since the adoption of the CPF. Achievement of the objectives set forth in the CPF results framework are largely on track, following the implementation of a large WB lending portfolio that includes many projects approved under IDA18, strong International Finance Corporation (IFC) performance, and the implementation of a comprehensive Advisory Services and Analytics (ASA) portfolio supporting and informing key policy and reform areas. The PLR notes Vietnam’s efforts to strengthen fiscal discipline and curb public debt, which, coupled with favorable domestic capital market conditions, have led to a decline in the uptake of concessional lending in Vietnam experienced by all partners. Furthermore, the introduction of strict budget allocations through a medium-term investment plan (MTIP) and the adoption of new ODA management procedures, have led to a slow-down in the implementation of ongoing projects. Continued strong fiscal management may bring opportunities for furthering the Maximizing Finance for Development (MFD) agenda and direct and indirect support for increased private sector and/or State-Owned Enterprise (SOE) engagement and blended financing. 

    Last Updated: Apr 24, 2019

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

    As of March 25, 2019, the Bank has provided US$24 billion in grants, credits and concessional loans to Vietnam through 165 operations/projects. Vietnam's existing portfolio consists of 44 active projects, with total net commitments of almost US$9 billion. In addition, Vietnam benefits from a large and diverse portfolio of Advisory Services and Analytics (ASA), with 61 currently active tasks. Many ASA engagements leverage country-level partnerships and trust funds from key development partners.

    Sustainable Development

    Vietnam has been pursuing reforms and investments that aim to promote green growth and address its high vulnerability to climate change.

    The World Bank has supported Vietnam in promoting this sustainability agenda across sectors. The Coastal Resources for Sustainable Development, for example, introduced tools and practices for better fisheries management by authorities and fishermen alike, along eight coastal provinces in Vietnam. Between 2012 and 2018, the project supported 40 coastal districts and 257 coastal communes to shift from fragmented sectoral planning to an integrated spatial planning for co-management of fisheries. The project also assisted 13,000 fishermen to adapt Good Aquaculture Practice in their daily practice by the introduction of new eco-friendly technologies, while helping to improve the biosecurity infrastructure in which they operate.

    The US$320-million Vietnam Renewable Energy Development project is a trail blazer for larger-scale deployment of renewable energy in the Vietnam’s power mix we are seeing today. The project opened for operation in 2009 when renewable energy was still a new concept in Vietnam and provided early-stage investment and technical support to build the requisite capacity and incentives among all stakeholders for scaled-up development. New policy instruments were put in place, notably Power Purchase Agreements and avoided cost tariff formula. In addition, 19 new Small Hydropower Plants were built with a total capacity of 320MW, which supplied an annual volume of 1,260GWh. All these plants met new environmental and social best practices, setting examples for others to follow.

    Urban Development

    The US$300-million Mekong Delta Region Urban Upgrading Project has elevated low-income, low-lying areas into truly livable urban spaces in six cities of the Mekong Delta Region. At the time of closure in 2018, the six-year project improved the living conditions of about 625,000 direct beneficiaries by upgrading the basic infrastructure. Some other two million indirectly benefited from the city-wide infrastructure improvements and the new social facilities. The long-term benefits go beyond the life cycle of the project. The total whole-life quantifiable benefits are estimated at approximately US$724 million in terms of saving in health care costs, productive time, flood control damage, as well as increase in land prices.

    Human Capital

    The World Bank has supported Vietnam in reforming the educational system at all levels. The US$100-million School Readiness Promotion Project, for example, helped increase the access to full-day preschool to 84 percent of five-year-old children in 2015  from 66 percent in 2011. The quality of preschool instruction improved through the introduction of a child-centered learning approach for 250,000 ECE teachers. For Higher Education, a series of operations supported the formulation of a new legal framework that provides a greater level of autonomy to higher education institutions and increases their accountability. The Bank also provides strategic advices for Vietnam on how to prepare its workforce for future jobs.

    Poverty Reduction

    Vietnam has made great strides in reducing poverty and improving quality of life for millions. The World Bank has worked closely with Vietnam in those early days and continues to do so to address the last mile in poverty eradication. The Second Northern Mountains Poverty Reduction Project, implemented in six mountainous provinces in the poorest region of Vietnam during 2010-2018, exemplifies this productive partnership. The project, with an IDA commitment of US$245 million, aimed at enhancing the living standards of ethnic minorities by improving their access to productive infrastructure, building capacity of local governments and communities, and promoting market linkages and business innovations. The project, which benefited 192,000 households and resulted in a 16-percent increase in incomes, provided good lessons for GoV to revise its poverty reduction policy and approach.

    Governance Reforms

    Improving the efficiency and integrity of the public sector is a priority for the World Bank in Vietnam. The World Bank agreed to support Vietnam’s Office of the Government in its efforts to strengthen the delivery mechanisms in administrative procedures and e-government reforms during the 2018-2020 period. Earlier, the Bank conducted a ground-breaking study to put conflict–of–interest issues into perspective in Vietnam. The growing likelihood of conflicts of interest resulting from greater interactions between the public and private sectors highlights the need for the country to better understand and effectively manage this issue.

    Last Updated: Apr 24, 2019

Api


LENDING

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

*Amounts include IBRD and IDA commitments



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Additional Resources

Country Office Contacts

Hanoi, +84.2439346600
8th Floor, 63 Ly Thai To, Hanoi, Vietnam
vietnam@worldbank.org
Washington, +1 202-473-4709
1818 H Street NW, Washington, DC 20433
eastasiapacific@worldbank.org