Vietnam can take next step to fortune
Vietnam can take next step to fortune
With its business and investment climate improving, Vietnam has created a big impression on the international community, which seeks a brighter outlook for the country.
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Pham Minh Chinh, Prime Minister The year 2025 is of special significance as it is for speeding-up and making breakthroughs to reach the finish line to successfully implement the five-year socioeconomic development plan.
It is also the year of many important events for the country: the 95th anniversary of the Party establishment; the 50th anniversary of the liberation of the south and national reunification; the 135th anniversary of the birth of President Ho Chi Minh; and the 80th anniversary of the country’s founding. This is also a year for organising congresses at all levels, towards the 14th National Party Congress, ushering in a new era – that of striving and developing for a more prosperous and civilised Vietnam, as Party General Secretary To Lam has directed. To successfully implement the goal of striving to become a developing country with modern industry, high average income by 2030, and to become a developed country with high income by 2045, we must make maximum efforts, create new factors to entice investment, enhance production and business, and make greater efforts to achieve a growth rate of at least 8 per cent or higher with stronger conditions, from there laying a solid foundation to achieve a double-digit growth rate from 2026. Implementing the strategic goals to celebrate the 100th anniversary of the founding of the Party, and the 100th anniversary of the founding of the country, is a challenging but also very glorious mission for our generations today and tomorrow. It is a connecting point between the past, present, and future, and is a prerequisite to bring the country out of the middle-income trap, rising to become a developed country. We can do it with innovative thinking, high determination, great efforts, effective methods, and flexible organisation. We must focus on realising the country’s unique potentials, outstanding opportunities, and competitive advantages. Heads of every level, at every enterprise, and each Vietnamese citizen need to ensure the spirit of solidarity and consensus, in the spirit of daring to think and daring to do. What is said must be done and what is committed must be carried out. And what is done must be measured and quantifiable. In 2025, a continued priority will be focused on promoting strong economic growth associated with macroeconomic stability, controlling inflation, and ensuring major balances of the economy. This year, the government will enhance analytical and forecasting capacity, and promptly manage fiscal and monetary policies to mobilise and effectively use resources. The government will also centre on renewing traditional growth drivers, especially solutions to stimulate investment, consumption and exports, while creating momentum to ensure new growth drivers, especially digital transformation, green transformation, development of emerging industries such as semiconductor, chips, big data, AI, Internet of Things, and cloud computing. Additionally, the government will also concentrate on developing a synchronous and modern strategic infrastructure system, accelerate construction of key projects, and connect the expressway system with airports and seaports, while also urgently constructing high-speed railways and urban railways. Greater efforts must be made to complete construction of 3,000km of expressways and over 1,000km of coastal roads by the end of 2025. We will also strongly develop digital infrastructure, urban infrastructure, culture, society, education, healthcare, and sports, while boosting research and exploitation of the earth, the sea, and space. It is also necessary to boost industrialisation, modernisation, and economic restructuring associated with growth model innovation towards enhancing the application of science and technology, improving productivity, quality, effectiveness, and competitiveness of the economy. In addition, it is needed to strongly develop potential and advantageous agricultural, industrial, and service sectors; to apply high technology towards greening and sustainability; to reduce logistics costs; and awaken potential of and strongly develop various types of tourism. We must also improve the operational effectiveness of state-owned corporations and groups; develop policies to strongly boost the development of private enterprises; ensure selective attraction of foreign investment; and participate more deeply in regional and global value chains. *Excerpt from article on innovation to lead Vietnam into a new era of development and prosperity, January 1, 2025 |
On the night of January 5, Vietnam was sleepless, with streets in major cities packed with football fans. They flowed out of their homes, holding national flags and banners, to celebrate the triumph of Vietnam’s national football team against Thailand in the 2024 ASEAN Cup final.
Among the football lovers was US Ambassador to Vietnam Marc E. Knapper and his colleagues. Sitting in a beer hall to watch the match, he was caught up in the atmosphere and joined the fans in the street to celebrate.
The United States and Vietnam have witnessed flourishing cooperation in recent years, but it is not the only cross-border success story for the latter. Over more than a decade, Vietnam has signed 17 bilateral and multilateral free trade agreements, and is now a trading partner of many markets, including Europe, the US, China, Japan, and ASEAN.
Thanks to its solid foundations, the economy has proven resilient through different crises. Economic growth reached 7.09 per cent in 2024 and is targeted by the government to hit over 8 per cent, with efforts to be made to reach 10 per cent in 2025, driven by increasing global demand and restored domestic consumer confidence, exports, and investment.
In talks with foreign companies, state ambassadors, and leaders of international organisations, Prime Minister Pham Minh Chinh has maintained that the government is committed to regulatory reforms which create a level playing field for businesses from all economic sectors.
“Vietnam is committed to protecting the legitimate rights and interests of foreign investors in the country in any circumstances,” PM Chinh said. “The Vietnamese government will continue its efforts to help enterprises weather challenges and seize opportunities for long-term operations in Vietnam on the principle of harmonious benefits and shared risks.”
From now until late 2025, one of the most important jobs of the government is to continue improving institutions and consider. At the US-Vietnam Business Summit 2024 in Hanoi in early December, PM Chinh stated that Vietnam would continue working on its three strategic breakthroughs in institutions, infrastructure, and people.
“We will create strong institutions via building a streamlined, strong, efficient, effective and efficient apparatus, improving the investment and business environment in the spirit of ‘open institutions, transparent infrastructure, and smart governance’ to reduce time, compliance costs, and input costs for businesses and investors, while increasing labour productivity, creating new development space, and enhancing the competitiveness of goods, businesses, and the economy,” PM Chinh said.
For example, the recent law on amending four investment-related laws, including the Law on Investment, has created progress for high-tech projects. Specifically, businesses investing into high-tech initiatives at industrial parks and export processing zones will not have to apply for an investment certificate, but for an investment registration certificate which must be issued to the investor within 15 days.
Through great efforts, the government has set a target to develop a business community of 1.5 million enterprises in 2025 and two million by 2030. At present, about more than 900,000 enterprises are operating in Vietnam.
In 2024, the economy saw over 157,200 businesses newly established, registered at $64.45 billion. Moreover, nearly 76,200 enterprises resumed operations, raising the total number of enterprises of these two types to over 233,400 - up 7.1 per cent on-year. In 2024, total capital supplemented into the economy reached $84.4 billion, up 3.6 per cent on-year.
By the end of the decade, the government has set a target of hitting an annual economic growth rate of 7.5-8.5 per cent. Per capita GDP is projected to sit at $7,400-7,600 by 2030, positioning Vietnam as an upper middle-income developing nation with modern industries and GDP of $780-800 billion.
According to the US Embassy to Vietnam and the American Chamber of Commerce, Vietnam’s ongoing reforms will create many opportunities for foreign businesses, including US ones. “The US is one of the top foreign investors in Vietnam, and despite considerable challenges posed by headwinds in the global economy, it remains Vietnam’s biggest export market which drives investment and growth throughout Vietnam,” said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi.
According to Sitkoff, US companies and investors bring high-quality products and state-of-the-art technologies, services, and business practices to Vietnam. “We share an interest in developing a globally competitive workforce, creating quality jobs, and investing in the professional development of our Vietnamese team members. High-quality foreign investors not only help grow Vietnam’s economy, but also help grow the entire ecosystem of local companies and entrepreneurs here,” Sitkoff said.
US Ambassador Knapper highlighted the positive impacts of the comprehensive strategic partnership forged in September 2023 on the two countries’ cooperation. “The partnership upgrade itself is a strong testament to how far we have come over nearly three decades. Whether it is our economic relationship, trade and investment, defence, health, climate, energy, education, and security, we have made so much progress, and so the upgrade seemed like a natural reflection of that progress and of our achievements” he said. “The elevation was also meant to send a very powerful message to the two peoples about how much confidence we have in the future and in each other.”
Bilateral trade between Vietnam and the US hit $134.6 billion in 2024. As of late last year, total US cumulative registered investment in Vietnam was $12 billion for 1,420 projects.
Julien Guerrier, Ambassador and Head of the European Delegation to Vietnam, also pointed out that Vietnam had been making efforts in administrative reforms. Together with the EU-Vietnam Free Trade Agreement (EVFTA), they have been facilitating EU investment into its market. “I am glad to say that the bilateral commercial and economic links have been developing quite well. The EVFTA has become an important piece of the puzzle, uplifting the commercial links between the two economies to an unprecedented height,” Guerrier said. “We’ve witnessed the EVFTA’s positive impacts on the Vietnam-EU trade.”
Both sides’ bilateral trade hit $68.8 billion in 2024. The EU has a total stock of investment of over $28.3 billion with over 2,450 projects.
“What Vietnam has achieved so far is still below its potential and that potential cannot be optimised in the absence of vigorous reforms and a strong determination in simplifying cumbersome administrative procedures and eliminating complicated licenses and sublicenses,” Guerrier said.
