Aspires to prosper rapidly: Vietnam aims to be Asia's subsequent 'tiger economy' – learn the strategy
Vietnam is embarking on a ambitious journey to transform its economy and avoid the middle-income trap, aiming to become the next "tiger economy" in Asia. The government is implementing sweeping structural reforms to shift the economy towards a private-sector-driven model, emphasizing innovation, productivity improvements, and global value chain integration.
Key industries and strategic priorities include manufacturing and export-oriented industries, infrastructure development, science, technology, and innovation, green energy and sustainability, and policy and institutional reforms.
In manufacturing, Vietnam is strengthening its role as a global manufacturing hub, with a focus on electronics and agriculture exports, which remain critical to sustaining its trade surplus. Developing 20 large national companies connected to global value chains is a notable goal.
Infrastructure development is another key focus, with a $42 billion infrastructure investment plan aimed at stimulating domestic demand, reducing vulnerability to external shocks, and supporting sustained GDP growth. Projects include extensive infrastructure and housing developments to underpin economic transformation and urbanization.
Science, technology, and innovation are being reinvested in to boost technological capacity and innovation as drivers of long-term growth. Public investment is rising in green energy sectors, aligning with Vietnam’s economic growth model and attracting foreign investors with a clear focus on sustainability.
Policy and institutional reforms are also a crucial part of Vietnam's economic roadmap. The government is cutting bureaucratic red tape by 30%, downsizing the public sector, streamlining provinces, and liberalizing capital markets to attract more investment and improve competitiveness.
Vietnam aims for a GDP growth rate between 8.3% and 8.5% in 2025, with ambitions to reach double-digit growth in subsequent years, translating into a high-income status by 2045. This economic roadmap targets avoiding the middle-income trap by moving up the value chain through diversified, innovation-driven industries and strategic infrastructure investments.
However, challenges lie ahead. Vietnam's "golden population" window, when working-age people outnumber dependents, will close by 2039, and the labor force is projected to peak just three years later. This could strain social services, especially since families, and women in particular, are the default caregivers.
Climate threats also require urgent action in Vietnam, as the country could lose 12-14.5% of its GDP each year by 2050 and up to one million people could fall into extreme poverty by 2030 if strong action is not taken to adapt to and reduce climate change.
Despite these challenges, Vietnam is investing heavily in infrastructure, including a $67 billion North-South high-speed railway. Even mega-projects like the North-South High-Speed Rail are now open to private bidding.
The US is now Vietnam's biggest export market, and Vietnam ran a $123.5 billion trade surplus with the US in 2024. Large multinationals have been powering Vietnam's exports, using imported materials and parts and low-cost local labor.
Vietnam is preparing to shift its economic policies, aware of the "middle-income trap." The Communist Party of Vietnam has passed Resolution 68, which considers private businesses as the "most important force" in the economy. Vietnam aspires to become a global financial center, with plans for two special financial centres.
The transformation into a global manufacturing hub has lifted millions of its people from poverty. Easier loans for companies investing in new technology, priority in government contracts for innovation-focused companies, and help for firms looking to expand overseas are part of Vietnam's new policy. Local companies in Vietnam have struggled to access loans and markets, with only 700-odd state-owned giants dominating the market.
Vietnam is counting on high-tech sectors like computer chips, artificial intelligence, and renewable energy for growth. The country is planning to let markets decide the national champions that will drive innovation and compete globally, rather than picking winners.
In conclusion, Vietnam's ambitious economic roadmap, focused on advanced manufacturing, technology, infrastructure development, and green energy, aims to propel the country to the status of a "tiger economy" by 2045. However, challenges such as an aging population, climate change, and the need for a more competitive private sector must be addressed to ensure success.
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