Vietnam’s Foundation for High-Income Aspirations by 2045: A Strategic Outlook

This is an affirmation made by Ms. Mariam J. Sherman, World Bank (WB) Country Director for Vietnam, Cambodia, and the Lao People’s Democratic Republic, in an interview with the Government Electronic Newspaper on the achievements, opportunities, and challenges in Vietnam’s new development journey on the occasion of the 80th anniversary of the National Day of the Socialist Republic of Vietnam (1945-2025).

Vietnam has achieved one of the most impressive development stories in the world

Looking back on Vietnam’s 80-year development journey, when asked about the most remarkable economic achievements that have helped Vietnam become a middle-income economy with high openness in the region, Ms. Mariam J. Sherman shared that since the Renovation period in 1986, Vietnam has achieved one of the most impressive development stories in the world. In less than 40 years, the country has transformed itself from one of the poorest countries into a dynamic economy, belonging to the group of middle-income countries.

In the late 1980s, more than half of the population lived in extreme poverty; this rate has now dropped to below 1%. Per capita income has increased sixfold, and life expectancy has increased by seven years compared to the early 1990s. Vietnam has deeply integrated into the global supply chain, with trade turnover equivalent to more than 160% of gross domestic product (GDP) – one of the highest rates in the world.

These achievements are closely linked to the lives of Vietnamese people. Currently, the country’s labor force is around 57 million, and more than 20 million new jobs have been created since the Renovation period, with over 80% in the private sector.

From the WB’s perspective, I can affirm that this is a story of vision, perseverance, and reform, bringing practical results to the people of Vietnam. The above achievements are a solid foundation for Vietnam to confidently aim to become a high-income economy with green and inclusive growth by 2045.

WB is honored to accompany Vietnam from the early days of Renovation

Speaking about the relationship between WB and Vietnam, Ms. Mariam J. Sherman affirmed that the partnership between WB and Vietnam has lasted for more than three decades, almost equal to the country’s reform journey.

RELATED NEWS

Since the early days of Renovation, WB has been honored to accompany Vietnam through each transition phase. From the 1990s, WB has worked with Vietnam in areas such as land governance, trade, investment, finance, and poverty reduction. These were the factors that facilitated and laid the foundation for Vietnam’s transition from a centralized planned economy to a market economy.

Over the years, WB has provided nearly $26 billion in financing, along with policy advice and global knowledge sharing in key areas, to support Vietnam’s development priorities. WB has invested in infrastructure, education, healthcare, agriculture, and social security, creating millions of jobs and expanding opportunities for people across the country. Notable projects include the electrification program (achieving a coverage rate of 99%); rural transportation and water supply development; climate change response in the Mekong Delta; renewable energy development; a series of 10 credit programs to support poverty reduction; support for building institutional foundations for the market economy; and the publication of the Vietnam 2035 and Vietnam 2045 vision reports.

Importantly, the cooperation between Vietnam and WB is not just about financial support but also about global knowledge sharing, helping Vietnam to both absorb international experience and build reform models suitable to the domestic context. Currently, Vietnam has also been sharing its development experience with many other countries.

WB is ready to accompany Vietnam in building an institutional system worthy of the 2045 vision

Regarding institutional reform, Ms. Mariam J. Sherman said that successful high-income countries have in common an effective and accountable institutional system. Recently, Vietnam has taken important steps, such as rearranging administrative units, merging ministries and sectors, and piloting e-government. These reforms will reduce procedures and improve the efficiency of serving people and businesses.

In the next phase, as the economy grows larger and more complex, the institutional system needs to be strengthened to maintain growth. The role of the state needs to shift from “direct intervention” to “creating a transparent, predictable, and rule-based environment” for the private sector to develop.

A professional civil service with a strong accountability mechanism and better governance will help increase the efficiency of every investment capital. WB is ready to accompany Vietnam in building an institutional system worthy of the 2045 vision.

Vietnam has achieved impressive per capita income growth

When asked about Vietnam’s growth prospects amid global instability, Ms. Mariam J. Sherman affirmed that Vietnam is entering a new development phase with many advantages, such as a young labor force, stable macro economy, and rapid adaptability. However, the global context remains challenging due to rising trade tensions and policy uncertainties. WB forecasts global economic growth in 2025 to reach only about 2.3%. As an export-oriented economy, Vietnam will be directly affected by the trend of supply chain shifts and new trade barriers.

In the past four decades, Vietnam has achieved impressive per capita income growth at 5.1% per year. However, to become a high-income country and achieve the goal of becoming a high-income country by 2045, WB recommends that Vietnam needs to maintain per capita growth of about 6% per year in the next two decades. The way forward must be quality growth based on high productivity, innovation, modern infrastructure, a skilled labor force, and moving up the value chain.

WB, along with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), provides comprehensive support for Vietnam’s development agenda. WB accompanies the government in building a stable policy environment to attract investment while directly providing finance, equity, guarantees, and risk insurance to encourage private capital inflows.

To achieve its sustainable development goals, the World Bank Country Director for Vietnam has proposed some strategic priorities: First, promote private sector development to improve productivity, create jobs, innovate, and enhance national competitiveness. Second, reform higher education to improve the quality of human resources to meet the requirements of the knowledge economy. Third, continue to invest heavily in key infrastructure sectors. Fourth, prioritize green growth, develop low-carbon economic sectors, create green jobs, and protect the environment. Fifth, strengthen institutional capacity to effectively implement policies, and finally, ensure that growth goes hand in hand with narrowing inequalities so that all people benefit.

To realize these priorities, Vietnam needs high-quality and transformative investments. WB is ready to provide large-scale, long-term capital, along with flexible financial instruments and global knowledge, to support Vietnam in accelerating its journey towards becoming a high-income country by 2045.