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Challenges in Searching for Vietnam's Growth Drivers Through 2030

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  • Luc Van Can
  • Tu Ngoc Dang

Abstract

Vietnam's long‐term economic growth comparisons with ASEAN nations have been striking since its 1986's economic reforms. Such key factors as economic liberalization, a young population and low‐cost labor, knowledge diffusion, and the manufacturing sector have driven Vietnam's growth. Until 2023, Vietnam has the potential to capitalize on several favorable circumstances, including the diversion of trade and investment from China, the growth of the middle class, and the global digital transformation. Nevertheless, Vietnam's economic growth will confront various obstacles and a declining trajectory that predates the COVID pandemic. To circumvent the risk of falling into the middle‐income trap, this paper proposes “active” economic integration, labor productivity, innovation and research and development, the services sector, and green growth as new growth drivers for Vietnam till 2030. Considering the many policy ideas put forth by the Vietnamese government and the World Bank, this paper presents several distinct recommendations on institution reform and human capital accumulation.

Suggested Citation

  • Luc Van Can & Tu Ngoc Dang, 2024. "Challenges in Searching for Vietnam's Growth Drivers Through 2030," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(2), pages 252-267, July.
    • Handle: RePEc:bla:asiapr:v:19:y:2024:i:2:p:252-267
    DOI: 10.1111/aepr.12458
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    1. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    2. Quoc Hoi Le & Quynh Anh Do & Hong Chuong Pham & Thanh Duong Nguyen, 2021. "The Impact of Foreign Direct Investment on Income Inequality in Vietnam," Economies, MDPI, vol. 9(1), pages 1-15, March.
    3. Tran Thi Xuan Anh & Ngo Thi Hang & Nguyen Thi Lam Anh, 2020. "Assessing Financial Market Integration in Vietnam: A Price – Based Approach," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 9, July.
    4. Md Arif-Ur-Rahman & Kazuo Inaba, 2021. "Foreign direct investment and productivity spillovers: a firm-level analysis of Bangladesh in comparison with Vietnam," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-23, December.
    5. Yuta Tsukada, 2022. "Premature deindustrialization risk in Vietnam," Journal of Asian Business and Economic Studies, Emerald Group Publishing Limited, vol. 30(3), pages 226-240, July.
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    Cited by:

    1. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2024. "ASEAN: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(2), pages 153-171, July.

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