Editorial

Since the launch of the Ðổi Mới economic reforms in 1986, Viet Nam has achieved immense economic and social progress. Most recently, its fast containment of Covid-19 has been remarkable and will support a return to the growth that Viet Nam has enjoyed thanks to its deep integration in the global economy and strong focus on developing the human capital of its population. Viet Nam has also achieved remarkable human development, poverty reduction and improvements in living standards, and has actively participated in international efforts to tackle the risks of climate change. Keeping economic and social progress on a strong track as society is ageing and the needs for more revenue and a broader social safety net are increasing, will require further policy reforms, which Viet Nam plans to introduce under its Socio-Economic Development Strategy.

Viet Nam has benefitted tremendously from globalisation and has become an attractive investment destination for international firms, increasingly embedded in global supply chains. However, growing automation in manufacturing, rising international trade tensions and concerns about the resilience of supply chains – a concern heightened by the recent coronavirus crisis – make it all the more important to accelerate reform and create the conditions for all types of firms to thrive. Ease of doing business, pro-competition regulation, and low trade restrictions will remain critical.

The ongoing modernisation of Viet Nam’s state-owned enterprises could help boost productivity. Adopting international best practices in the field of corporate governance, levelling the playing field so that all firms have equal chances of success and allowing the restructuring of loss-making state-owned firms, will remain crucial.

In agriculture, restrictions, particularly on land use and transactions, can inhibit productivity gains. Environmental pressures are also increasing: the annual mean concentration of fine particles in the air continues to rise and water quality is deteriorating. A lot has already been done to promote renewable sources of energy but fast-growing energy needs make the transition away from carbon-intensive energy sources particularly urgent.

Viet Nam’s tertiary education system could play a more important role in ensuring that workers and entrepreneurs have the right skills to develop or absorb innovative methods of production. Schools have acquired more autonomy and responsibilities, but co-ordination and peer-to-peer support are necessary to make the most of this new environment. Viet Nam also needs to develop a strong information system to support evidence-based policy-making and guide students’ choices.

Viet Nam now has a window of opportunity to leverage past successes and climb the development ladder. With a dedicated push for implementation of reforms, it has the potential to reach high-income status in just about 30 years. If productivity growth and labour participation are maintained at present levels, per capita GDP (currently similar to India’s) would reach the current level of Malaysia by 2043 and of Korea by 2049. This Multi-dimensional Review provides a medium-term strategy and offers policy recommendations to achieve sustainable, resilient and inclusive growth.

This report is a multidisciplinary effort. It mobilises and combines economic, social, statistical, environmental and institutional expertise from across the OECD. It was prepared in close collaboration with the government of Viet Nam and with the support of the European Union, under the EU-OECD Development Centre Facility for Asia, as well as Switzerland, Korea and the Hanns-Seidel Foundation in Viet Nam.

Mario Pezzini

Director of the OECD Development Centre

Special Advisor to the OECD Secretary-General on Development

Laurence Boone

OECD Chief Economist

Paul Schreyer

Acting Chief Statistician of the OECD