VIETNAM

CASE STUDY

Government Strategies to Increase Economic Development

 OVERVIEW

The government’s main strategy comprises of the:

● 10 year Social Economic Development Strategy (SEDS)

● 5 year Socio-Economic Development Plan (SEDP)

With the current SEDS (2021-2030) the govt seeks to move up

the global value chain from a manufacturing export-oriented
economy based on fossil fuels to one with advanced tech,
services and highly skilled labour based on renewable energy
 01
WORLD BANK
 SUMMARY
● The World Bank promotes long-term economic development and poverty reduction by
providing technical and financial support to help countries implement reforms or projects
● Vietnam has been a member since 1976

Examples of Strategies (and outcomes) Include:

★ 2007 – Water Supply and sanitation Projects – access to clean water in rural areas (70%) and in cities
(95%)
★ 2019 – Grassroots Health Service Delivery – US$88 million - providing health services throughout local
and provincial levels
★ 2021 – Strengthening Preparedness and Response to COVID 19 – US$2.85m spent on grassroots training
of medical and local communities
★ 2022 – Decarbonization and Energy Transition – US$4.10m spent on supporting key industrial sectors
transition away from fossil fuels in order to meet climate goals
 PROGRESS ON GOALS:
Millennium Development Goals:

Poverty:
Vietnam has made great progress,
with the poverty rate falling from
58.1% in 1993 to an estimate 14% in
2008
Sustainability:
Whilst there has been progress
there is still much that needs to
achieved.
Education:
In 2009, the net enrolment rate in
primary school was 95.5 %, the primary
school completion rate was 88.2 % and
the literacy rate of people aged 15-24
years was 97.1 %

Infant Mortality: Clean Water and Sanitation:

They achieved their set targets Number of households to who
with infant mortality being access to clean water reached
reduced from 44.4 per 1000, live 93.4%
births in 1990 to 15 in 2011.
 OTHER BENEFITS/IMPACTS
● The inclusion of sustainable development principles into the socio-economic development
strategy (2011-2020) and socio-economic development plans (2006-2010 and 2011-2015)

● Forest coverage has increased from 28.8 % in 1990 to 39.5 % of total land in 2010
● More than 96 % of all households have access to modern energy and are connected to the electricity grid
● Although Vietnam’s greenhouse gas emissions are low, accounting for only 0.3 % of the global emissions in
2004, CO2 emissions per capita increased four times in the period 1990-2008

● Energy use per $1,000 GDP (PPP) was reduced from 407 in 1990 to 267 in 2008
● 92 % of households had access to safe drinking water in 2011, up from 78.7 % in 2000
● Rural households with access to safe water rose from 73.5 to 89.4 % over the last decade
● In 2011, 78 % of all households and 71.4 % of rural households had access to sanitary latrines, up from 44.1 % and
32.5 % in 2000 respectively

● The proportion of the population living in temporary housing fell from 15.9 % in 1999 to 7.8 % in 2009
ASIAN
DEVELOPMENT BANK
1) Asian Development Bank (ADB)

● The ADB supports projects in developing member countries that create economic and
development impact, delivered through both public and private sector operations,
advisory services, and knowledge support. ADB supports Vietnam to enhance climate
resilient transportation, promote sustainable urban development, improve rural
connectivity, and reduce pockets of poverty in remote areas.
● ADB assistance totalled $17.7billion in 2022 (up from $13.91billion in 2014), with 577
loans, grants, and technical assistance. The sectors receiving the largest share of
lending has been in transport and communications (32.3%), energy (17.6%), and
agriculture and natural resources (13.1%).
 Infrastructure Development Energy Sector: Education and Skills
Development
$450 million loan in 2020 to In 2021, the ADB approved
a $116 million loan to the ADB provided a $100
improve urban
develop a solar power million loan in 2019 to
infrastructure and climate
plant in Quang Ngai improve the quality and
resilience in Ho Chi Minh
Province. relevance of higher
City.
education in Vietnam.
Healthcare:
Poverty Reduction:
ADB financed for the construction or
the ADB provided a $100 million
renovation of healthcare facilities,
loan in 2021 to help improve the
procurement of medical equipment and
living standards of ethnic minority
supplies, training of healthcare personnel,
communities in northern Vietnam.
and implementation of healthcare programs
Other benefits of the World Bank and ADB in aiding Vietnamʼs
eco dev
● Energy – 504 kms transmission lines installed or upgraded
● Water – over 166,000 households with new / improved water
supply and 23,000 households with improved sanitation
● Water – over 1.38mill hectares improved land – drainage,
irrigation, flood management
● Finance - 16,670 new microfinance loans
● Education – 357,800 more teachers, new/improved facilities
● Link these to improvements in education attainment,
increase in health and life expectancy and incomes
 Development of Services Sector Tourism
(formal and informal economy)

● In 2011, it implemented a 10-year strategy to promote and develop tourism as

a key driver of economic development. Three main strategies to achieve this:

1) Economic
- attract 10-10.5 million international visitors by 2020 (7.6% annual increase)
- serve 48 million domestic tourists (5.3% annual increase)
- Increase tourism revenue to US$ 18-19 billion by 2020 (13.8% increase to 2015,
12% annual increase thereafter)
- Contribute 6.5-7% of GDP by 2020.
- Attract $42.5 billion in investment, increasing room supply to 580,000 rooms by
2020

2) Social
- increase numbers employed in tourism to over 3 million (870,000 direct jobs)
- tourism development contributes to the preservation and promotion of Vietnamʼs
culture
3) Environmental – “green“ tourism activities associated with preserving and
promoting the value of natural resources and environmental protection,
ensuring that tourism development complies with environmental law.

● Increased industry growth: between 2015 and 2019, the number of

international visitors to Vietnam grew by an average of 22% per year.
● Tourism accounts for 12% of GDP in 2019
● In 2019, Vietnam attracted over 18 million international tourists and
85 million domestic tourists, making it one of the top 10
fastest-growing tourism industries in the world
● The tourism sector created 660,000 formal jobs between 2014 and
2019
● 2020 – 2022 – COVID reduced overall tourist numbers, starting to
improve in 2022 but still below prior to COVID
 03
DEVELOPMENT OF
SERVICES SECTOR
TOURISM
 Three Main Strategies
10 year strategy implemented in 2011 to drive tourism growth as
a driver for economic development
ECONOMIC
● attract 10-10.5 million international visitors by
2020 (7.6% annual increase)
serve 48 million domestic tourists (5.3% annual
●
increase).
● Increase tourism revenue to US$ 18-19 billion by
2020 (13.8% increase to 2015, 12% annual
increase thereafter).
● Contribute 6.5-7% of GDP by 2020.
● Attract $42.5 billion in investment, increasing
room supply to 580,000 rooms by 2020
SOCIAL
● increase numbers employed in tourism to over
3 million
of which 870,000 are direct jobs.
● Ensure tourism development contributes to
the preservation and promotion of Vietnam’s
cultural values, improving the lives of its
people
ENVIRONMENTAL
● Develop green tourism activities
● preserving and promoting the value of natural resources
and environmental protection
● ensuring that tourism development complies with
environmental law.
 Effects
● This has spurred industry growth: between 2015 and 2019, the
number of international visitors to Vietnam grew by an average of
22% per year.
● Tourism accounts for 12% of GDP in 2019
● In 2019, Vietnam attracted over 18 million international tourists and 85
million domestic tourists, making it one of the top 10
fastest-growing tourism industries in the world
● The tourism sector created 660,000 formal jobs between 2014 and
2019
● 2020 – 2022 – COVID reduced overall tourist numbers, starting to
improve in 2022 but still below prior to COVID
 04
INCREASED
MINIMUM WAGE
January 1, 2020, Vietnam’s minimum wages increased in each of the
country’s four regions, reflecting the level of development.
The minimum wage now ranges from:
VND 3,250,000 ($132 USD) to VND 4,680,000 ($191 USD) per month.
 BENEFITS/IMPACTS
Government needs to balance improvement in standard of living for workers against
attractiveness to FDI and TNCs of low cost labour, otherwise TNCs will relocate to cheaper
alternatives and reduce FDI in Vietnam

● wages still considerably lower than China ($360 USD)

● attracts FDI (especially to poorer regions)

● unequal distribution of income persists (rural + urban)

● workers in higher tech firms earn more than manufacturers

● people employed in the informal sector earn well below

the minimum wage