Viet Nam

This chapter highlights key challenges to be addressed to improve the policy framework for sustainable investment in agriculture, drawing from the OECD Policy Framework for Investment in Agriculture. First, it examines the key trends of domestic and foreign investment in agriculture since the Doi Moi reforms in 1986, and provides an overview of Viet Nam’s investment policy, focusing on efforts to promote public-private partnerships, reduce the role of state-owned enterprises and enhance food safety. Then, it examines policies and measures for investment promotion, including investment incentives and licensing procedures, and describes land tenure policy as secure land tenure is a key condition for sustainable investment in agriculture. It also analyses existing policies intending to facilitate access to finance by agricultural investors, and examines the constraints faced by investors arising from infrastructure development, trade policy, human resource development and research. Finally, it reviews policies aiming to promote responsible business conduct in agriculture. The last section summarises the key findings of the chapter.

Support to Viet Nam’s agricultural sector fluctuates between low and negative levels depending on changes in market price support (MPS). In 2019-21, Viet Nam’s producer support estimate (PSE) was -7.7%, implying implicit overall taxation compared to the positive level of support of 6.4% in 2000‑02. MPS varies across commodities. Producers of import-competing commodities, such as maize, sugar cane and beef, benefit from tariff protection, while producers of pig and poultry meats, pepper, coffee, tea, and rubber are implicitly taxed. Effective prices received by farmers were 7% lower on average than world prices during 2019-21, though there were large differences between commodities. Rice producers benefit from domestic price support measures that seek to provide rice farmers with a 30% profit on their average production cost. However even with these measures, the price received by farmers in recent years was lower than the export reference price, resulting in a negative MPS. Budgetary transfers to producers are relatively small and dominated by payments based on variable input use – primarily expenditure to offset the irrigation fee exemption.

In 2005, with the passing of the revised Law on Environmental Protection (LEP), a new era in environmental assessment in Vietnam commenced, with the introduction of requirements for SEA of a range of national, regional and provincial strategies and plans. The SEA of the Quang Nam Province Hydropower Plan for 2006-15 provides a unique case study, as it was the first SEA undertaken following the requirements of the revised LEP.

This chapter provides an overview of the urban structure, development trends and challenges of urban areas in Viet Nam. It first analyses Viet Nam’s urban structure in an internationally comparative context. Then it presents the urbanisation process in the country and analyses its economic drivers and impacts. It also covers the challenges for Viet Nam’s sustainable urban development. While most of the analysis is based on official data according to the administrative definition of urban areas in Viet Nam, it also introduces the Functional Urban Areas, providing a new picture of urban agglomerations in the country, grounded on settlement patterns.

This section evaluates Viet Nam’s reform efforts and provides an anatomy of the regulatory framework for investment based on the general matrix of the Policy Framework for Investment (PFI) (see Box 3.1).1 This assessment, as a cooperative endeavour, builds upon Viet Nam’s self-evaluation under the PFI. It focuses on the first four chapters and part of Chapters 9 of the PFI relating to investment policies, investment promotion and facilitation, trade policies, competition policies, tax policies and development of the service sector.

This chapter focuses on the urban policy frameworks at the national level which determine possibilities and incentives for sustainable urban development at the local and regional levels. It begins by outlining the complex structures of current national urban policy frameworks. A distinctive element of Viet Nam’s approach to urban policy is a heavy emphasis on city classification, and this too will be considered. The chapter will then give attention to key urban policy areas: urban transport, housing, land management and the quality of the urban environment.

In 1987, early in the process of transition to a more market-oriented economy, the Vietnamese National Assembly adopted the Law on Foreign Investment. Follow-up steps have been taken in the past two decades to encourage, protect and improve the quality of foreign investment. Such efforts resulted in strong investment flows in the mid-1990s (see Figure 2.1). Due to the Asian financial crisis, net foreign investment inflows dropped significantly in 1997, but began to grow again in 2001. Since 2006, there has been a major increase in the level of FDI in Viet Nam. Disbursed FDI in 2007 totalled USD 8 billion, and estimates from Viet Nam’s Foreign Investment Agency show that disbursements totaled USD 11.5 billion in 2008. Foreign direct investment as a percentage of total investment has increased also recently reached and exceeded the pre-Asian financial crisis levels, as FDI accounted for 30% of total investment in Viet Nam in 2008. Registered FDI in Viet Nam in 2008 totaled USD 71.7 billion.

This chapter describes important features of the animal disease management system in Viet Nam. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarises the main characteristics and challenges.

Viet Nam Social Security (VSS) manages and administers social security contributions and benefits (including pensions) for both private sector workers and government workers. The current pension scheme is a defined benefit scheme.

Viet Nam ratified the UNCAC in August 2009. It has been a member of the APG since 2007. The Vietnamese legal system is based on the civil law and the communist legal system. Its criminal bribery offences have not been externally reviewed.

The position of Vietnamese women has improved since the 1950s. In 2006, the National Assembly passed the country’s first Law on Gender Equality. According to the US Department of State, this law aims to address a range of issues (such as wage gaps) and eliminate discrimination based on gender.

Viet Nam has been quick to recover from the downturns caused by the COVID-19 pandemic, but it faces long-term economic challenges. Boosting labour productivity will be crucial to sustained high economic growth. Attracting further foreign investment and reaping the benefit of advanced technologies will require additional improvements to the business environment through simplifying administrative procedures. Levelling the playing field of competition between state-owned enterprises and private enterprises will also help to maintain Viet Nam’s attraction for international investors. The country is already among the leaders of digitalisation in Southeast Asia, with strong adoption of e-commerce, telemedicine and telework. Further investment in digital skills will be key to maintain this momentum. The authorities have committed to net zero carbon emissions by 2050 and are expanding renewable energy generation capacity. A comprehensive decarbonisation plan would facilitate the transition to greener growth.