Vietnam aims to become Asia’s next “tiger economy” by 2045 through an ambitious economic overhaul. The country wants to move beyond its low-cost, export-led growth model and focus on high-tech sectors like computer chips, artificial intelligence, and renewable energy.
The challenge ahead is reconciling growth with overdue reforms, climate risks, and aging population issues. Vietnam’s transformation into a global manufacturing hub has lifted millions of people from poverty, but it faces growing obstacles to its proposed reforms.
Vietnam ran a $123.5 billion trade surplus with the US in 2024, angering President Donald Trump. The two sides settled on a 20% levy for certain goods, and Vietnam’s focus was on its tariffs compared to those of its neighbors and competitors.
To move beyond the “middle-income trap,” South Korea bet on electronics, Taiwan on semiconductors, and Singapore on finance. But Vietnam’s economy is more diverse and complex than those countries were at the time.
It needs to make “multiple big bets” in high-tech sectors and invest heavily in infrastructure, including civilian nuclear plants and a $67 billion North-South high-speed railway. The government also plans two special financial centers with simplified rules to attract foreign investors.
Private businesses are expected to lead Vietnam’s new economic push, a seismic shift from the past. Large multinationals have powered Vietnam’s exports, but local companies are struggling to access loans and markets.
The country is racing to pre-empt the fallout of climate change by expanding access to preventive healthcare and gradually raising the retirement age. By 2030, Vietnam hopes to elevate at least 20 private firms to a global scale, but there may be pushback from conservatives in the Communist Party and state-owned firms.
Source: https://apnews.com/article/vietnam-economy-climate-trade-mekong-067331203c59c61dbd6d40c04aa5d91d