To achieve its goal of high-income status by 2045, Viet Nam must advance institutional reforms and promote greener development, according to two new reports from the World Bank.
The first report, "Viet Nam 2045—Breaking Through: Institutions for a High-Income Future," suggests that strengthening the legal and regulatory environment and streamlining public investment are essential for sustaining the rapid growth needed to meet this target. It highlights that countries escaping the middle-income trap have improved their institutional quality consistently.
"Viet Nam’s ambition to become a high-income country by 2045 has brought renewed focus on institutions as enablers of sustained growth," said Mariam J. Sherman, World Bank Director for Viet Nam, Cambodia, and Lao PDR. She emphasized that achieving this goal requires bolder reforms to unlock private sector potential for growth and job creation.
The second report, "Viet Nam 2045—Growing Greener: Pathways to a Resilient and Sustainable Future," underscores how investments in adaptation can mitigate climate shocks affecting Vietnamese farms, businesses, and factories. Projections indicate that sea level rise could inundate nearly half of the Mekong Delta by midcentury. A World Bank survey from 2024 found significant heat stress risks in areas where three-quarters of apparel and electronics manufacturers operate, endangering over 1.3 million workers. Without adaptive actions, climate impacts might reduce Viet Nam’s economic output by up to 12.5 percent by 2050 compared with baseline projections.
"The good news is that there are actions that can be taken today to protect land, communities, and infrastructure from climate shocks," stated Ms. Sherman. She stressed the importance of establishing mechanisms and incentives for firms and households to adapt while integrating climate risk management into all economic aspects.
The report estimates these investments could lower projected climate-induced GDP loss from 12.5 percent to 6.7 percent by 2050.
It also identifies opportunities for reducing carbon intensity in Viet Nam's economy towards net-zero emissions by 2050. The private sector's role is central in advancing energy transition through cost-effective renewable technologies improving industrial energy efficiency—a move expected to foster innovation, growth, and job creation.
Leveraging Viet Nam’s marine economy is highlighted as key for a greener future since about 30 percent of the population lives along its coastline with many relying on marine ecosystems for livelihoods. This sector faces climate risks but holds potential in supporting mitigation efforts through renewable energy expansion like offshore wind power estimated at up to 475 gigawatts by the World Bank alongside wave energy projects.
These reports were funded by Australia's government via the Australia–World Bank Strategic Partnership Phase 2 (ABP2) forming part of the Viet Nam 2045 series which explores policies needed for long-term development goals.