After nearly 40 years of “Doi Moi” (Economic Renewal), Vietnam’s economy has become one of the most dynamic in the region, with GDP growth at remarkable levels. In 1986, the country’s GDP stood at just $8 billion, but by 2024 was estimated at $476.3 billion, for a 59.5-fold increase.

Today, Vietnam is entering into a new era, striving to fulfill its aspiration of becoming a strong and prosperous nation amid a volatile, rapidly-changing, complex, and unpredictable global and regional economic-political landscape. As the country continues its deep and broad economic integration with a high degree of openness, any fluctuations in the global political and economic environment will have direct impacts on its development trajectory.

To realize the vision of building a Vietnam that is “wealthy, strong, democratic, equitable, and civilized”, the country must urgently pursue comprehensive and synchronized reforms. These include reforming economic institutions; building an enabling, strategic, and policy-making State with strong governance; thoroughly overhauling the education system; restructuring the economy and innovating the growth model; and fostering the development of the private sector and national enterprises as the most vital force and pioneering vanguard in economic advancement.

Advancing sustainable institutional reform

Institutions serve as the foundation and play a crucial role in shaping a nation’s prosperity. On April 30, 2025, the Politburo issued Resolution No. 66-NQ/TW regarding innovating law-making and law enforcement in response to Vietnam’s development demands in the new era. The Resolution aims to build a truly democratic, equitable, safe, and transparent society, where the people genuinely hold power and contribute to decision-making on critical national matters; where modern governance and administration foster development; and where the people’s quality of life is comprehensively improved and every sacred inch of the national territory is firmly protected.

It sets the goal that, by 2030, Vietnam will have a democratic, equitable, coherent, unified, transparent, and feasible legal system, supported by a strict and consistent enforcement mechanism. This legal framework should ensure the lawful operation of all activities in a continuous and uninterrupted manner, resolve practical obstacles, pave the way for development, and mobilize the full participation of citizens and businesses in socio-economic progress.

The Resolution is a strategic move that affirms the central role of law as a tool for development. It reflects the Party and State’s renewed mindset and political determination in legislative reform, the building of a rule-of-law State that is enabling, efficient, and effective, placing national interests above all else, with genuine, broad-based participation from the people and the business community. It also underlines the Party and State’s objective of creating an inclusive institutional foundation, eliminating the institutional bottlenecks that hinder development. There is an urgent need to eliminate overlapping, conflicting, and inconsistent legal documents that have caused implementation challenges, led to waste, increased costs and risks in business operations, and resulted in missed opportunities for rapid and sustainable growth.

To ensure a sound legal basis for smooth, uninterrupted activity and to resolve issues arising from reality while paving the way for development, the Party and State must establish and enforce a sustainable mechanism for institutional reform that meets three criteria: ensuring the quality and practical relevance of current legal provisions; enhancing the effectiveness and transparency of law enforcement; and rigorously controlling the quality of new regulations to avoid policy conflicts and development barriers.

When institutions are aligned with reality, institutional bottlenecks disappear. When laws are enforced transparently and effectively, corruption, rent-seeking, and wastefulness will have no room to exist. When the quality of new regulations is well controlled and avoids policy conflicts, no new bottlenecks will emerge, and institutions will truly become a driver of development. Institutional reform that meets these three criteria will transform institutions into both a foundation and a powerful driver of national prosperity.

Future vision

Establishing an enabling and governance-oriented State that develops policy with strategic vision is a critical condition and a foundational pillar for Vietnam to achieve rapid, sustainable development and deep international integration.

The Party and State have made a significant breakthrough in this direction by shifting from an administrative management mindset to one of governance, facilitation, and service. This includes transitioning from a bulky, multi-layered local administrative apparatus to a streamlined, citizen-oriented government that is closer to and better serves the people.

Establishing an enabling and governance-oriented State that develops policy with strategic vision, while enhancing transparency and accountability, is key to eliminating short-termism, eradicating vested interests, corruption, and waste, and fostering public trust, consensus, and societal support.

Alongside institutional and legal reform focused on transparency and accountability, the Party and the State are accelerating the restructuring of the administrative system by removing intermediary levels, merging agencies with overlapping functions, and clearly delineating roles and responsibilities among ministries, sectors, and localities. This includes eliminating unnecessary or outdated functions and restructuring the civil service into a lean, professional, and capable workforce that can make independent decisions and take full responsibility for those decisions.

To realize this vision, the Party and the State must cultivate an environment that inspires effort and awakens and promotes a sense of public ethics, integrity, and service-oriented spirit among officials, civil servants, and public employees. The civil service must be restructured towards competence, compactness, professionalism, dynamism, and adaptability to both domestic and international changes.

A governance-oriented, policy-shaping State with strategic vision must operate on five core principles: Strengthening practical, results-based management methods; Improving performance and results control; Promoting the decentralization and delegation of authority, dismantling power centralization, and creating a healthy competitive environment within the State apparatus without limiting agency mandates in ways that hinder efficiency; Advancing public-private management models and flexibly applying effective private sector management practices in the public sector; and Minimizing recurrent expenditures and reducing the cost of public administration and governance. At the same time, society must become more open and welcoming to change, and be better prepared for future developments.

To meet and keep pace with the rapid advancements of Industry 4.0 and to avoid falling behind the region and the world, an enabling State must seize opportunities and create new drivers for development.

In this era of digital transformation and AI, the government must accelerate the application of technology and digital governance by building and operating an AI-powered, 24/7 intelligent government, one that goes beyond standard working hours to operate more efficiently, more intelligently, and more inclusively, anytime and anywhere. This will accelerate social progress and help the country seize opportunities more effectively.

Successfully establishing and operating an enabling, governance-oriented, and strategically visionary State is a vital contribution by the Party and the State to the country’s development in this new era.

Educating for knowledge creation

Education and training are the backbone of national development, and the most effective form of national defense. A nation that neglects education is destined to fall behind. For decades, the Party and the State have prioritized education as central to building a prosperous, independent, and globally-integrated Vietnam. Politburo Resolution No. 29-NQ/TW, issued on November 4, 2013, by the 8th Plenum of the 11th Party Central Committee, marked a pivotal commitment to comprehensively reforming education in both form and substance. The State has also issued various mechanisms, policies, solutions, and action programs to improve the quality of education and ensure equitable learning opportunities for all.

Over recent decades, Vietnam’s education and training sector has achieved notable accomplishments but still faces serious challenges. Around the country today, there are many classrooms but few truly outstanding, noble teachers; many lecture halls but few young people with a genuine thirst for truth and justice. The quality of education and training has yet to meet the nation’s development needs. The system lacks cohesion between levels and modes of education; it remains overly theoretical and light on practical application; with insufficient emphasis placed on ethics, life skills, and work readiness. Teaching methods and assessment practices lack substance. The educator and managerial workforce suffers from imbalances in quality, quantity, and structure; some are not aligned with the demands of innovation, lack dedication, and even violate professional ethics, all while social morality is in alarming decline.

These realities unfold amid the explosive growth of Industry 4.0, demanding that Vietnam’s education and training system undergo urgent and profound reform guided by the concept of “original knowledge education”. This educational philosophy is not only essential to improving training quality but also lays the foundation for Vietnam to make breakthroughs in science and technology, attain development autonomy, and reach global stature. We must build an education system that teaches learners to create knowledge, not merely replicate it.

Original knowledge education allows learners to access, understand, and apply core, unfiltered knowledge, untouched by simplification or distortion from intermediaries. It fosters independent critical thinking, real engagement with the depth of knowledge, the ability to self-learn and self-explore, and a deep respect for the essence of things.

Educational reform can be considered successful and meaningful only when both the education system and Vietnamese society achieve the following outcomes.

First, young people must develop a vibrant sense of awareness and a clear understanding of what is beautiful and what is good. Teaching someone a professional skill is not enough; this may produce a functional specialist but not a human being with dignity. What matters most is nurturing a deep sense of what is worth striving for, what is beautiful, and what is virtuous. Without this, learners become well-trained but not well-developed individuals.

Second, all levels of education must be equally valued, with a balance between humanistic education and specialized knowledge. Education should produce individuals who understand noble motivations, recognize human illusions and suffering, and know how to interact properly with others and with society. These values are best passed down through direct relationships with teachers, not just books. Teachers are the foundation of cultural transmission and preservation, which is why all levels of the education system must place equal importance on humanistic and technical education.

Third, the system must nurture independent critical thinking. Only individuals, as autonomous thinkers, can create new value for society. Without independent, creative minds, societal advancement is impossible. At the same time, individuals cannot grow without the “fertile soil” of a supportive community. A healthy society fosters individual independence while maintaining social cohesion.

To cultivate independent thinking, the Party and State must encourage constructive criticism, actively listen to informed suggestions and initiatives from society, and direct the education system to shift from one-way teaching to interactive, discussion-based, and debate-driven learning. Teachers should transition from knowledge transmitters to thought facilitators, creating space for student dialogue. Curricula must move beyond rote theory to emphasize analysis, critique, and real-world case studies. Above all, education must foster a democratic, open environment connected to real life and the global context.

Fourth, the education system must cultivate individuals with original, self-derived knowledge. Learners should be taught to think for themselves, explore independently, and create new knowledge through contemplation, lived experience, absorption, and self-reflection.

Humans need original knowledge - internally developed knowledge - because it is enduring and arises from the fusion of academic understanding with real-life experience. A person with self-derived knowledge will shape the world in their own way and leave behind a meaningful legacy.

To build such an education system, critical and independent thinking must be encouraged. In addition to mastering content, learners should also be empowered to ask questions and challenge ideas. Teachers should not just impart knowledge but also inspire thinking. The system must provide space for creativity and experimentation, where making mistakes and correcting them are part of learning. It should eliminate the fear of being wrong, allowing learners to think and act differently. Absolute right-wrong grading models should give way to evaluations based on process, reasoning, and competence.

Furthermore, teaching methods should not only focus on content but also emphasize how to seek answers. Students should blend textbook knowledge with real-world experience to make learning truly their own. An original knowledge-based education must teach students how to self-learn, self-research, and self-discover, while also imparting scientific and systems thinking and strong information literacy skills.

Reshaping for growth

In the context of an unpredictable and rapidly-changing global economic and political landscape, restructuring the economy and renewing the growth model is an inexorable trend and a vital necessity. It is a strategic solution and turning point that will help Vietnam enhance its economic independence and self-reliance, proactively integrate into the global economy, and achieve rapid, efficient, and sustainable development in the new era.

This process aims to improve the quality of growth, generate new growth drivers rooted in science, technology, and innovation, and lay a foundation for sustainable growth aligned with green, circular economic trends. It will also promote the private sector’s dynamism, enabling it to become a pioneering force in economic development, while improving workplace productivity, national competitiveness, and the overall material and spiritual well-being of the people.

Alongside institutional reform and the building of an enabling, well-governed State that crafts policies with strategic foresight, the Party and State must urgently restructure the economy in alignment with global development trends across industries and sectors. This includes embracing high technology, AI, and digital transformation; and fostering green, circular, and sharing economies.

We must determine which sectors and industries Vietnam should prioritize in the coming decades, and what technologies should be adopted to align with global development flows and avoid falling behind. In parallel, we must define suitable production methods and technologies for each sector of the economy.

Restructuring the economy and renewing the growth model are essential for making the right investments, optimizing resource use, avoiding waste and inefficiency, and saving the nation’s human, material, and financial resources.

The Party officially adopted the policy of economic restructuring and growth model renewal at the 11th National Congress, then further emphasized, detailed, and elevated it at the 12th and 13th National Congresses. However, progress has been slow, and depth and quality remain limited. This calls for continued innovation in thinking, institutional reform, and the robust application and development of science and technology in the time ahead.

Economic restructuring and growth model renewal also entail intra-sectoral restructuring to establish suitable and optimal production methods. From there, public investment proportions must be adjusted and directions provided for private sector investment into restructured industries and fields, in order to effectively utilize capital, labor, and technology in production.

Promoting the private economy and developing domestic enterprises

Amid economic restructuring, growth model renewal, deep global integration, and Industry 4.0, on May 4 this year the Politburo issued Resolution No. 68‑NQ/TW, recognizing the private sector as a key economic driver. This is expected to enhance productivity and national competitiveness and steer Vietnam’s economy towards green, circular, and sustainable models. Alongside the State-owned and collective sectors, private and domestic enterprises are positioned at the heart of Vietnam’s path towards economic self-reliance, deeper global integration, and shared prosperity, paving the way for the country to escape stagnation and rise to affluence. Resolution No. 68 also addresses long-standing barriers that have held back the private sector.

Immediately after its release, the National Assembly passed enabling legislation, while the government established a national steering committee and issued decrees activating special mechanisms to support private enterprises.

To implement Resolution No. 68 effectively, the National Assembly and government must urgently roll out transparent, fair, and open policies to help domestic firms grow sustainably and integrate more deeply into global supply chains.

First, the government must take the initiative and act swiftly in institutional reform by reviewing, amending, and improving the legal environment to ensure all types of enterprises are treated fairly under the law. This builds trust, motivation, and dynamism within the private sector. Laws must be enforced publicly and transparently, eliminating “ask-give” mechanisms and crony capitalism, while ending all discriminatory practices between State-owned, foreign, and private enterprises. Administrative procedures must be further reformed, public sector accountability strengthened, and regular dialogues with businesses maintained to resolve issues promptly.

Second, fiscal and monetary incentives should be implemented, alongside improved policies enabling private enterprises to access bank credit. The government should provide mechanisms for credit guarantees and support for startups and innovative businesses, and develop capital markets, including the stock and bond markets, to help companies raise medium and long-term funding. In the spirit of a facilitating State, the government must guide and support private enterprises to expand development space and participate in emerging global sectors, ensuring Vietnam remains globally competitive.

Third, land policies should be designed and implemented to provide fair access to business premises with simplified land allocation procedures and no discrimination between business types. In parallel, the government should invest in digital infrastructure, high-tech industrial parks, and logistics networks to help businesses reduce costs and enhance competitiveness.

Fourth, the government should support businesses with technological innovation and workforce development, ensuring the private sector can operate in new sectors aligned with economic restructuring and the shift to a new growth model.

Fifth, a breakthrough national strategy for the development of Vietnamese enterprises should be established that is flexible in institutions, policies, and capital access. This strategy must align private enterprises with the country’s five and ten-year socio-economic development plans, support their effective access to new technologies, and build an ecosystem of satellite economic entities around them.

The effectiveness of these policies will, however, depend on the resilience and vision of Vietnamese entrepreneurs; those who are willing to take risks, learn from failure, and adapt to new realities.

It is encouraging to see the Party and State not only change policy but do so with genuine care and responsibility for the people. Institutional reform, strategic statecraft, educational overhauls, economic restructuring, and private-sector empowerment together form the necessary foundation for a strong and prosperous Vietnam; one that brings well-being and happiness to its citizens.

(*) Dr. Nguyen Bich Lam is the former Director General of the General Statistics Office (now the National Statistics Office at the Ministry of Finance)