The term “era” generally refers to a long period of time, and requires a defined timeframe when being used to refer to Vietnam’s major, long-term objectives. As such, the “New era – The era of the nation’s rise” will be marked, in the not-too-distant future, by significant milestones – the 100th anniversary of the founding of the Communist Party of Vietnam (CPV) in 2030, by which time Vietnam is to be a developing nation with modern industry and higher middle-income status; and the 100th anniversary of the founding of the Democratic Republic of Vietnam (now the Socialist Republic of Vietnam) in 2045, by which time the country is to be a developed nation with high incomes, as outlined at the 13th National Congress of the Party in early 2021.
Defining the new era
The term “nation’s rise” has sparked new, ambitious expectations, surpassing the key milestones Vietnam achieved from 1930 to the present: the establishment of the CPV in 1930, the success of the August Revolution in 1945, with the Democratic Republic of Vietnam established, as a result, and national reunification in 1975. The country has overcome the socio-economic crisis that emerged in the late 1970s, which continued throughout the 1980s and into the early 1990s. It also overcame later crises such as those in Eastern Europe, the East Asian currency crisis, and the once-in-a-century global financial and economic downturn of the mid to late-2000s. In 1988, GDP per capita stood at only $86, placing Vietnam among the poorest countries in the world. By 2008, however, it had moved out of the low-income group of countries and into the lower-middle-income group.
To better understand the term “rising” in the new era, it should be compared to Vietnam’s established goals: “Wealthy People, Strong Nation, Democratic, Equitable, and Civilized Society”. This represents the core ideals of socialism, reflected in the country’s name, the “Socialist Republic of Vietnam”, which marks a higher vision than the previous name, the “Democratic Republic of Vietnam”, since September 2, 1945. By 2025, Vietnam has aimed to be a developing nation with modern industry, surpassing the low-middle-income threshold. By 2030, the goal is to be a developing nation with modern industry and a higher-middle-income status. By 2045, the aim is to become a developed nation with high incomes, as outlined during the 13th National Party Congress. Therefore, it is important to define more specific criteria for the “New era - The era of the nation’s rise”, in order to foster deeper understanding, clearer expectations, and greater aspirations.
To realize the vision of “The era of the nation’s rise”, there is much work to be done. A key task currently underway is streamlining the Party, the State, and socio-political organizations, which is both necessary and revolutionary. The fight against corruption must continue with greater determination, leaving no exceptions and no safe zones, in order to combat negative behavior. Reforming the institutional framework is “the key of all keys”, “the breakthrough of all breakthroughs”. The first round of reforms was only the beginning; the second round - the era of reform for the nation’s rise - is now underway.
However, the organizational structure must function as a cohesive unit. If changes are not made at the provincial level, it will be difficult to merge provinces in the future, so this needs to happen prior to the 14th National Party Congress. Anti-corruption efforts must be more resolute, as insufficient enforcement is one of the five “gaps” that allow corruption and negative behaviors to thrive: 1) Boundless greed, 2) Power and abuse of power, 3) Loose mechanisms, 4) Lack of widespread public involvement, and 5) Insufficient punishment.
Foundations for strategic positioning
The foundation for the “New era - The era of the nation’s rise” is rooted in Vietnam’s current circumstances and its long-term aspirations. The country’s present achievements, following the first phase of “Doi Moi” (Renewal) in the late 1980s, have elevated its stature significantly. Vietnam has experienced 43 consecutive years of GDP growth, second only to China’s 46-year record, which helped the latter post the world’s second-largest GDP. As of 2023, Vietnam’s GDP exceeded $430 billion, with projections it will surpass $450 billion in 2024. Per capita GDP has exceeded $4,300, signaling the country’s progress towards transitioning from a lower-middle-income to an upper-middle-income economy.
Exports have reached more than $400 billion, with a trade surplus recorded for nine consecutive years. This not only underscores Vietnam’s growing strength in international trade but also contributes to GDP growth, increased foreign reserves, and enhanced national financial stability. Inflation has been controlled for eleven consecutive years, unemployment and underemployment rates have declined, and FDI and international tourism are recovering to pre-pandemic levels. Diplomatic and trade relations have also shown considerable advancement.
Despite these achievements, challenges remain. GDP growth is still relatively modest, and the growth model predominantly relies on quantitative, extensive expansion. Key growth drivers are constrained and prone to producing unintended side effects.
The ratio of total social investment to GDP has fallen from over 30 per cent in the past to below 30 per cent in recent years, partly due to low corporate profit margins compared to bank lending rates. In some cases, profits are even lower than savings deposit rates, and certain sectors have reported losses. Public investment has also declined significantly, with State budget investment accounting for less than 30 per cent of total expenditure in recent years, while frequent expenditure accounts for nearly 70 per cent.
Investment efficiency presents additional concerns. Before the Covid-19 pandemic, Vietnam required six units of investment to generate one unit of GDP growth. This ratio peaked at 15.54 in 2021 and fell to 5.13 in 2022, only to rise again to 7.89 in 2023. Workplace productivity has seen steady growth, but its absolute level remains low at around $8,500 per worker. Meanwhile, the dependency ratio is high, with each worker supporting an average of two dependents. Population growth has slowed to about 1 per cent annually, and a rapidly-aging population is accelerating the transition from a “golden demographic structure” to an “aging demographic structure”.
Vietnam also faces the risk of “falling further behind” economically, as the per capita GDP gap between Vietnam and other countries continues to widen. This raises the concern of becoming “old before getting rich”.
Amid these challenges, Vietnam has several pivotal opportunities. In addition to traditional growth drivers, new forces have emerged, such as high-quality FDI in semiconductor technology, AI, and chip manufacturing. Enhanced diplomatic relations with key nations and the signing of next-generation free trade agreements (FTAs) provide further impetus for economic growth and development.
The strategic direction focuses on building “Wealthy People, Strong Nation, Democratic, Equitable, and Civilized Society”. This vision emphasizes three critical breakthroughs: institutional reform, human resources development, and infrastructure improvements, with institutional reform considered the “key of all keys”.
Vietnam’s strategic objectives align with a “pentagon of goals”, including high economic growth, low inflation, a positive balance of payments, low unemployment, and improved environmental protection. Growth strategies aim not only at achieving high rates, of above 10 per cent, but also at enhancing quality through improved investment efficiency, accelerated workplace productivity, and increased contributions from Total Factor Productivity (TFP) to GDP growth.
The country is also focused on transitioning from an agricultural to an industrial economy, driving significant structural transformations. Moreover, Vietnam aims to balance “virtue-based governance” and “rule-based governance” while addressing the five “gaps” noted above that foster corruption and negative practices. By capitalizing on these opportunities and addressing existing challenges, Vietnam is poised to advance confidently into the “New era - The era of the nation’s rise”.
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