Vietnam's expressway network is supporting socio-economic development 

Administrative reform for innovation-led growth

According to the WB's latest report, while Vietnam's 1986 Renovation focused on opening markets, the current reform agenda aims to modernize the entire system by streamlining the government apparatus, expanding the role of the private sector, strengthening institutions, and shifting to an innovation-driven growth model to achieve high-income status by 2045.

The current reform program is comprehensive in scope, moving at a rapid pace, and has the potential to reshape the economy. Beginning in late 2024, Vietnam launched the country's largest administrative restructuring since the 1986 Renovation, including halving the number of provinces, eliminating district-level government, reducing the public-sector workforce by more than 100,000 employees, digitizing public services, consolidating ministries and agencies, and launching judicial reforms to align the court system with the needs of an increasingly complex and globally integrated economy. These reforms are supported by measures to modernize the tax, customs, and corporate bankruptcy systems; implement the Global Minimum Tax; make better use of free trade agreements; diversify export markets to reduce tariff risks and strengthen compliance with rules of origin; and expand private-sector access to financing through capital market reforms. During the National Assembly session in December 2025, more than 51 draft laws were submitted, and from January 2025 through April 2026, a total of 86 laws and more than 300 decrees were enacted or amended.

The 2026-2030 public investment plan allocates approximately US$320 billion, mainly for energy, transportation, and logistics, to address infrastructure bottlenecks. The Government has achieved its goal of expanding the expressway network to at least 3,000 kilometers. Several major national projects have been accelerated, including the ring roads in Hanoi and Ho Chi Minh City, Long Thanh International Airport, and the Lao Cai-Hai Phong railway. Other priorities include energy infrastructure, with efforts to speed up the transition to renewable energy and restart nuclear power projects in Ninh Thuan to meet growing electricity demand, as well as expanding digital infrastructure. Total social investment is projected to average about 40% of GDP, with public investment accounting for approximately 20-22% of the total. Achieving these targets will require substantial private-sector financing and blended finance mechanisms that reduce investment risks while allowing private investors to share project risks. Stronger project appraisal, better coordination among agencies, and greater implementation capacity will be needed to ensure investments are carried out efficiently and contribute to expanding the economy's productive capacity.

Mobilizing private capital, raising FDI quality

According to the WB, Vietnam's greatest policy challenge is advancing structural transformation while maintaining macroeconomic stability. The economy is shifting from a growth model driven largely by exports and credit to one based on productivity and private-sector development. However, this transition is taking place amid rising geopolitical risks, an unprecedented public investment program, and sweeping administrative reforms. As a result, managing short-term shocks while building long-term resilience are not competing priorities but parallel requirements.

The first priority is maintaining macroeconomic stability. In the short term, a prudent monetary policy, a wider USD/VND trading band, and bilateral currency swap arrangements will help strengthen the economy's resilience. The recent expansion of unemployment insurance to temporary workers also provides a stronger safety net against economic shocks. Over the medium term, a full transition to inflation targeting would help anchor inflation expectations and allow the exchange rate to respond more flexibly to external pressures. At the same time, stronger macroprudential oversight, including an effective bank resolution framework and the adoption of risk-based Basel III standards, would reduce systemic vulnerabilities and improve credit allocation.

In addition to maintaining macroeconomic stability, the WB believes Vietnam must address both implementation capacity and financing constraints tied to its public investment plan. The proposed US$320 billion investment program will place significant pressure on the national budget and the traditional banking system. To fully realize its growth potential, Vietnam will need rigorous project appraisal, effective coordination across all levels of government, and strong governance. Mobilizing private capital on a large scale will be essential. Credit enhancement and risk-sharing mechanisms could help attract private investment by absorbing selected project risks on a commercially viable basis, provided fiscal oversight is strong enough to manage contingent liabilities. The financial system must also evolve to support this agenda. Vietnam's heavy reliance on bank credit, while capital markets remain concentrated in government bonds, banking, and real estate, limits the mobilization of long-term savings, increases systemic risks, and leaves infrastructure projects and private-sector innovation chronically underfunded.

"Vietnam should continue pursuing an upgrade to Morgan Stanley Capital International (MSCI) market status following its FTSE Russell market upgrade, while deepening the corporate bond market through greater transparency and stronger corporate governance, thereby moving toward a more diversified and resilient financial system," the WB report said.

In addition, Vietnam should make more strategic use of its position as a leading FDI destination. The priority is not simply to attract more FDI, but to attract higher-quality investment that creates stronger linkages with domestic enterprises through technology transfer, skills development, and greater demand for locally sourced inputs. This will require proactively connecting capable domestic suppliers with foreign investors, strengthening the capacity of local enterprises to meet multinational standards, and shifting domestic production toward higher-value manufacturing and services. Promoting innovation and technology adoption will help narrow the productivity gap between foreign-invested and domestic enterprises, creating spillover effects that raise productivity across the economy.