Vietnam’s Ambitious Growth Target and Sustainable Development Goals

Introduction

On 13 August 2024, Party General Secretary To Lam announced that Vietnam is entering an era of national rise, aiming to achieve high-income status by 2045. This vision prompted the National Assembly to adopt a double-digit GDP growth target for 2026–2030 through Resolution 192. Although this target is likely unattainable, it serves as a catalyst for essential structural reforms aligned with the Sustainable Development Goals (SDGs).

Economic Context and Growth Challenges

1. Current Economic Status: Vietnam’s per capita income reached approximately US$4,472 in 2024, positioning the country to become an upper-middle-income economy this year, in line with SDG 8 (Decent Work and Economic Growth).
2. High-Income Threshold: To achieve high-income status by 2045, Vietnam must increase per capita income to around US$14,006 (2024 terms), requiring an average annual GDP growth rate between 7.5% and 9.7%. This growth is essential for reducing poverty and promoting sustained economic growth (SDG 1 and SDG 8).
3. Historical Growth Rates: Vietnam has not recorded double-digit growth since 1985, with average growth over the past two decades at 6.25%, below the ambitious target.
4. Structural Limitations: The traditional growth model relying on labor transfer from agriculture to industry is losing effectiveness due to declining population growth and birth rates below replacement level, impacting SDG 3 (Good Health and Well-being) and SDG 10 (Reduced Inequalities).

Factors Influencing Future Growth

• Capital Stock and Productivity: Vietnam’s capital stock has grown at 7% annually since 2015, while total factor productivity (TFP) increased by only 1.7%. Achieving double-digit growth would require TFP growth of 5.7% annually, which is highly unrealistic compared to global averages, highlighting the need for innovation and technological advancement (SDG 9: Industry, Innovation, and Infrastructure).
• External Environment: Global economic slowdown, deglobalisation trends, and trade tensions, including a 46% US tariff, threaten Vietnam’s export-driven economy, potentially reducing GDP growth by up to 3 percentage points in 2025. This underscores the importance of economic resilience and diversification (SDG 8 and SDG 17: Partnerships for the Goals).

Policy Responses and Reform Pillars

Despite challenges, the Vietnamese government has initiated significant reforms to support sustainable growth and SDG achievement:

1. Science, Technology, and Innovation: Resolution 57 promotes technological advancement to enhance productivity and competitiveness (SDG 9).
2. International Integration: Resolution 59 focuses on expanding global partnerships and trade diversification, supporting SDG 17.
3. Legal and Institutional Reform: Resolution 66 aims to improve lawmaking and enforcement, fostering a transparent and accountable governance system (SDG 16: Peace, Justice, and Strong Institutions).
4. Private Sector Development: Resolution 68 supports private sector growth, innovation, and job creation (SDG 8).

Implementation and Sustainable Development Focus

• Administrative Efficiency: Streamlining state apparatus to improve governance and public service delivery (SDG 16).
• Infrastructure Development: Accelerating expressway construction and infrastructure projects to enhance connectivity and economic activity (SDG 9 and SDG 11: Sustainable Cities and Communities).
• Export Market Diversification: Expanding trade relations beyond traditional partners to reduce vulnerability (SDG 8 and SDG 17).
• Addressing Key Challenges: Tackling trade vulnerability, technological constraints, demographic changes, climate change, and environmental degradation to ensure sustainable and inclusive growth (SDG 1, SDG 3, SDG 10, SDG 13: Climate Action, and SDG 15: Life on Land).

Risks and Recommendations

1. Risk of Political Pressure: The ambitious growth target may lead to GDP data manipulation and the pursuit of quantity over quality, risking unsustainable development outcomes.
2. Data Transparency: Strengthening independent statistical bodies is essential to ensure accurate and reliable data for informed policy-making (SDG 16).
3. Quality over Quantity: Emphasizing sustainable, high-quality projects rather than rapid growth to avoid environmental degradation and wasted resources (SDG 12: Responsible Consumption and Production).
4. Focus on Real Development Challenges: Prioritizing solutions to demographic, environmental, and technological challenges to secure long-term sustainable development.

Conclusion

Vietnam’s double-digit growth target, while likely unattainable, serves as a vital impetus for reforms addressing critical development challenges. Aligning economic ambitions with the Sustainable Development Goals ensures that growth is inclusive, resilient, and environmentally sustainable. Ultimately, the pathway Vietnam chooses will determine the success of its national rise and the well-being of its people.

Authors

• Phan Le, Lecturer in Economics, Thanh Do University, Hanoi, Vietnam.
• Hai Thanh Nguyen, Lecturer, Faculty of Business Administration, Ton Duc Thang University, Ho Chi Minh City, Vietnam.

1. Sustainable Development Goals (SDGs) Addressed or Connected to the Issues Highlighted in the Article

1. SDG 8: Decent Work and Economic Growth
   • The article discusses Vietnam’s ambitious economic growth targets, structural reforms, and challenges in achieving sustained GDP growth.
2. SDG 9: Industry, Innovation and Infrastructure
   • References to science, technology, innovation, infrastructure development, and improving total factor productivity relate to this goal.
3. SDG 10: Reduced Inequalities
   • Vietnam’s efforts to develop its private sector and diversify export markets imply addressing economic inequalities and inclusive growth.
4. SDG 13: Climate Action
   • The article mentions escalating threats of climate change and environmental degradation as challenges Vietnam faces.
5. SDG 16: Peace, Justice and Strong Institutions
   • Concerns about GDP data manipulation and the need for independent statistical bodies relate to governance and institutional integrity.
6. SDG 17: Partnerships for the Goals
   • International integration and trade cooperation efforts mentioned in the article align with global partnerships.

2. Specific Targets Under Those SDGs Identified Based on the Article’s Content

1. SDG 8: Decent Work and Economic Growth
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances, aiming at least 7% GDP growth per annum.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
2. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and GDP.
   • Target 9.5: Enhance scientific research, upgrade technological capabilities, and foster innovation.
   • Target 9.c: Increase access to information and communications technology and strive to provide universal and affordable access to the Internet.
3. SDG 10: Reduced Inequalities
   • Target 10.2: Empower and promote the social, economic and political inclusion of all.
4. SDG 13: Climate Action
   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters.
   • Target 13.2: Integrate climate change measures into national policies and strategies.
5. SDG 16: Peace, Justice and Strong Institutions
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.
   • Target 16.7: Ensure responsive, inclusive, participatory and representative decision-making.
6. SDG 17: Partnerships for the Goals
   • Target 17.11: Significantly increase exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports.
   • Target 17.16: Enhance the Global Partnership for Sustainable Development.

3. Indicators Mentioned or Implied in the Article to Measure Progress Towards the Identified Targets

1. GDP Growth Rate
   • Annual GDP growth rates (e.g., 6.25% average over two decades, double-digit growth targets) are used to measure economic growth (SDG 8.1).
2. Per Capita Income
   • Per capita income levels (e.g., US$4,472 in 2024, target of US$14,006 or more by 2045) indicate economic development and standard of living (SDG 8.1).
3. Total Factor Productivity Growth
   • Measures efficiency of resource use and technological advancement (SDG 8.2, 9.5).
4. Capital Stock Growth
   • Growth in capital stock (7% average since 2015) reflects investment in infrastructure and industrial capacity (SDG 9.2).
5. Population Growth Rate and Birth Rate
   • Demographic indicators such as declining population growth rate (from 1.2% in 2015 to 0.6% in 2024) and birth rate below replacement level affect labor force and economic potential (SDG 8.5 indirectly).
6. Trade Tariffs and Export Levels
   • Impact of tariffs (e.g., 46% US tariff) on GDP growth and export volumes measures trade vulnerability and integration (SDG 17.11).
7. Quality and Transparency of Statistical Data
   • Concerns about GDP data manipulation and lack of independent statistical bodies relate to governance indicators (SDG 16.6).
8. Environmental Vulnerability Indicators
   • References to climate change threats and environmental degradation imply use of climate vulnerability and environmental quality indicators (SDG 13.1, 13.2).

4. Table of SDGs, Targets, and Indicators

Source: eastasiaforum.org