Vietnam's success over the past two decades is undeniable The country has moved from a largely

agrarian economy to one powered by manufacturing. Food is more plentiful, health care more
accessible, schooling more affordable, and disposable incomes higher than ever. But the country
faces significant challenges, some of which stem from its rapid progress. And those issues will
create formidable obstacles as Vietnam aims to transform itself into a modern knowledge-based
economy.

To understand how far Vietnam has comeand what the country's leaders must do to sustain
progresswe used The Boston Consulting Groups Sustainable Economic Development
Assessment (SEDA). SEDA is a powerful diagnostic tool designed to provide insight into the
well-being of a country's citizens and how effectively a country converts wealth, as measured by
income levels, into well-being.

A key finding: Vietnam is among the top performers globally when it comes to converting
wealth into well-being. With GDP per capita (based on purchasing-power parity) of about
$5,200, Vietnam has a well-being level that would be expected of a country with GDP per capita
of more than $10,000a clear indicator that the country has successfully harnessed limited
resources for the good of its citizens.

Making the next leap in development, however, will require aggressive action on several fronts.
On the basis of our SEDA analysis and our extensive work with companies and public-sector
leaders in Vietnam, we have identified three key areas the country must address:

-Strengthening the links between the labor market and the education system

-Upgrading the country's infrastructure

-Improving governance

A Major Success Story

SEDA defines well-being through ten dimensions: income, economic stability, employment,
health, education, infrastructure, income equality, civil society, governance, and environment.
SEDA examines each dimension along two time frames:

-The current-level score uses the most recent available data to offer a snapshot of well-being on a
scale of 0 (the lowest level) to 100 (the highest).

-The recent-progress score uses data from the most recent seven-year period for which data is
available to examine changes in well-being. This metric also uses a scale of 0 to 100.

Vietnam's overall current-level SEDA score of 42.4 places the country in the middlenumber
79of the 149 countries we assessed. Not surprisingly, wealthy nations such as the US, Japan,
Norway, Germany, and Singapore come out ahead of Vietnam, with current-level scores of 80 or
above. When it comes to progress over the seven-year period from 2006 to 2013, however,
Vietnam is in the top quintile, putting it in the company of countries such as Poland, Indonesia,
China, Brazil, Ecuador, and Morocco, all of which have had notable achievements in the past
decade.

SEDA also examines the connection between wealth and well-being through two coefficients:

-The wealth-to-well-being coefficient compares a countrys current level of well-being with the
level that would be expected given its GDP per capita (based on PPP). The expected level is
represented by a coefficient of 1.0, which is based on global averages.

-The growth-to-well-being coefficient compares a country's recent progress in well-being with

the level that would be expected given its GDP growth rate. Again, the expected level is
represented by a coefficient of 1.0, based on global averages.

Vietnam is among only 49 nations in our data set with scores higher than 1.0 for both
coefficients. The country's performance in converting wealth into well-being is particularly
impressive its wealth-to-well-being coefficient of 1.48 is among the top 10% globally. (See
Exhibit 1.) And although Vietnam doesn't stand out quite as much when it comes to the growth-
to-well-being coefficientwhich comes in at 1.04it is still above the global average on this
measure.

Image: BCG Perspectives

So, how does Vietnam stack up to its peers? We compared the country to a group of four
othersIndonesia, Malaysia, the Philippines, and Thailandthat, like Vietnam, have midlevel
incomes. (Myanmar is also in the midlevel-income group but is not included in our SEDA
analysis, owing to the difficulty of accessing reliable data.) This group, which we dub the
ASEAN 4, will not only be crucial partners for Vietnam in the 21st century but will also continue
to be key competitors in attracting foreign direct investment. (See Exhibit 2.)

Image: BCG Perspectives

Vietnam matches or exceeds the ASEAN 4 in several dimensions, including economic stability
and civil society. In several areas, however, including infrastructure and governance, Vietnam
lags behind the group. In addition, although Vietnam's performance in employment is in line
with that of its ASEAN 4 peers, the country faces a number of labor market issues, including a
lack of skilled workers and low worker productivity, that could impede the next phase of its
development.

Towering Ambition

Although Vietnam's gains over the past 20-plus years have been impressive, the country's goals
for the coming years are even more ambitious.

-The government's primary economic aim is to increase income per capita to $8,000 to $9,000
(on a PPP basis) by 2020, roughly 2.5 times the 2010 level. This would raise Vietnam's national
wealth to the current level of Indonesia's and well above the level today in the Philippines.

-The government also wants to transform the structure of Vietnam's economy so that 85% of
GDP is derived from the industrial and service sectors, with high-value-added industries
accounting for about 45% of GDP.

-The country is targeting an unemployment rate of around 3% and plans to build a workforce in
which 70% of workers are trained (including post secondary and vocational training) and about
55% of those individuals receive vocational training.
Achieving these objectives would fundamentally transform Vietnam's economy and allow the
country to shed its developing-nation status. To reach these targets while sustaining progress in
overall well-being, however, Vietnam must address key gaps relative to more-developed peers in
the region.

Building the Workforce of the Future

Vietnam has a sound record in education. With a highly literate population and scores in math
and science that are comparable to those of many wealthier OECD countries, Vietnam's current-
level SEDA score in education is above the average of the ASEAN 4.

The country's current education system, however, will not be sufficient to meet the demands of a
knowledge-based economy. The challenge stems from two fundamental problems. First, labor
productivity in Vietnam is lower than in many peer countries. Output per worker in Vietnam was
about $5,300 (based on PPP) in 2012, roughly 18 times lower than in Singapore and about 60%
lower than in the Philippines.

Second, Vietnam's base of skilled workers is relatively small. For instance, 6.9% of workers in
Vietnam have completed tertiary education, compared with 12.6% in Thailand and 16.4% in
Malaysia. And only 25.4% of the workforce has completed secondary education, about half of
Malaysia's 50.9% and below Thailand's 27.8%. As a result, the country lacks highly trained
craftsmen, professional services workers, engineers, and technicians.

Addressing the labor market issues in Vietnam requires action on several fronts:

-First, the links between industry and universities and vocational institutions must be
strengthened. Doing so will help drive the creation of education and training programs that teach
the skills that employers are looking for. Such programs will not only produce a better and
higher paid workforce, but will also help Vietnam retain the large multinational corporations that
have already invested in the country.

-Second, Vietnam must improve how it communicates with parents and students about future
workforce needs. Such an effort is likely to help address a key issue: the lack of interest among
students and their parents in vocational training. The skills that many employerssuch as
electronics manufacturing services companiesare struggling to find are typically taught in
vocational schools, but many students view vocational training as a last resort.

-Third, Vietnam needs to revamp its workforce planning system by developing a robust process
for forecasting and monitoring labor supply and demand. This will help the country establish
effective labor plans and allow for the flexibility of those plans amid constantly changing
economic conditions. The government should also establish a system to assess how stakeholders
such as universities and vocational institutions are faring in producing skilled and employable
workers.

Bridging the Infrastructure Gap

Vietnam has invested substantially to strengthen its infrastructure, as demonstrated by its recent-
progress SEDA score in infrastructure, which is among the top 10%. However, the country is
behind the ASEAN 4 group in the current-level infrastructure score and lags behind its peers in
areas such as electricity supply and the quality of the rail and road networks.

We estimate that in order to sustain economic growth and remain competitive with other nations
in the region, Vietnam will need to invest between $113 billion and $143 billion in infrastructure
from 2014 to 2020. (This estimate is based on infrastructure investment of about 9% to 10% of
GDP under three growth scenarios5%, 6%, and 8%from 2014 to 2020.) Public capital
however, is likely to cover only 50% to 60% of the sum, making it critical for Vietnam to come
up with innovative ways to narrow and manage the funding gap.

We see the opportunity to act in two areas:

-First, the government should expand the role of public-private partnerships (PPPs) in
infrastructure projects. Certainly, improvements in governance in Vietnam will be helpful in this
regard, increasing private investors' confidence in the fairness of the legal and regulatory
systems. But Vietnam must also improve both infrastructure planning and the execution of PPP
projects. The government recently issued decrees that provide guidelines for implementing these
partnerships. However, the country should take further steps, including establishing a toolkit for
public agencies and private-sector investors.

-Vietnam should create special economic zones (SEZs) in order to get the most out of
infrastructure investments by focusing them in key regions. This makes more sense than trying to
upgrade infrastructure throughout the country in a relatively short period.

Raising the Bar in Governance

Vietnam's current-level SEDA score in governance is well below the scores of its peers. The
country has taken steps to address the issue, including recent government initiatives that have
reduced bureaucracy in tax, customs, and administrative procedures. But evidence of persistent
governance problem abounds. Roughly 66% of companies in Vietnam's Provincial
Competitiveness Index, for example, indicated that "they have to pay informal charges" when
doing business. And two-thirds of businesses cited issues with bureaucracy.

In the years ahead, Vietnam will have no choice but to address its governance issues. A key
reason: foreign investors will be unlikely to put their money to work there if they do not have
confidence in how the country is run. Action should be taken in two areas:

-First, the country should adopt a system for rewarding and promoting high-performing
government workers. The value of an objective performance-measurement system has been
demonstrated in countries around the world. In Indonesia, public servants are now graded and
rewarded on the basis of their performance. The government in Singapore has a rigorous system
that links up to 40% of the salaries of senior officials to performance. In Vietnam, this sort of
approach would be a powerful mechanism for attracting and retaining qualified workers.
-Second, the country should roll out digital tools in order to increase government transparency.
Standardizing procedures and digitizing government services can improve transparency and
reduce the need for face-to-face interaction with government. That, in turn, minimizes
bureaucracy and eliminates opportunities for inappropriate payments and corruption. To tap that
opportunity, however, the Vietnamese government must address a key obstacle: digitized
services must be based on clear and unambiguous rules, but in many areas Vietnam's legal code
remains unclear.

Vietnam is on the cusp of the next stage of its development. By targeting the right areas for
improvementincluding education and employment, infrastructure, and governancethe
country can achieve real economic gains and enhance the well-being of its citizens.

But the focus should be on the country's achievements rather than on the higher well-being
levels, greater wealth, better roads, or improved access to top-tier education that other nations
may have achieved. The people of Vietnam should celebrate the leaps they have made with the
resources at hand, identify where more work needs to be done, and demand action in those areas
from both the government and the nation as a whole.

Authors: Douglas Jackson, Douglas Beal, Chris Malone and Nam Tran.

https://www.weforum.org/agenda/2016/04/how-can-vietnam-build-on-improvements-in-well-being

The initiative started with pilot projects in two communes in the province of Nghe An (North Central
Coast) in 2002, and was then extended to 20 provinces/cities across the country in 2003-2004. Based on
this pilot, the Land Law of 2003 was revised to clearly state that Land Use Certificates should be issued
as a joint title, with both names on the certificate.

To implement the 2003 Land Law, the World Bank financed the Vietnam Land Administration Project,
under which around 3.4 million Land Use Certificates were either issued or updated. Around 60% of
LUCs were issued as joint titles and the rest were issued in the name of either the husband or wife

For women, the benefits of joint titles are not just symbolic. Bank impact assessment of the joint titles
programrevealed that around 42% of people surveyed used their newly issued LUC for investment,
either as a collateral to borrow from banks or share for investment. In that context, having their name
on the land title allows women to have a greater say in important decisions pertaining to the
households land, avoids male monopoly over jointly-owned assets, and ensures equal rights in the
event of a conflict.

Some 88% of people who participated in Bank impact assessment agreed that joint-title LTCs ensure
greater equality between husband and wife compared to single-title LTCs (this perception was more
common among younger participants: 91% of respondents aged 22-60 vs. 77% among those 60 and
older).
Attracting foreign direct investment (FDI) has always been a key part of Vietnams external
economic affairs. Vietnam already has many comparative advantages and a strong investment
climate, but we are working hard to become even more appealing to foreign investors. We are
doing so by vigorously renovating the business and investment climate, and by recognizing that
the FDI sector is an integral part of the economy essential to restructuring the economy and
raising national competitiveness.

As of last month, there were more than 16,300 active FDI projects in Vietnam that have
collectively pulled in a total of $238 billion. These investors came from 100 countries and
territories, and many of them are some of the worlds leading multinational corporations. In
2013, FDI inflow exceeded $22 billion, an increase of more than 35% from 2012. The figures
indicate that Vietnam has become a destination of choice for foreign investors.

So what explains this Vietnamese success story?

First, Vietnam has been securing socio-political stability, and is known to be one of the most
dynamic economies. Economic growth between 1991 and 2010 averaged 7.5% each year and,
despite the many difficulties the country faced between 2011 and 2013, GDP growth still rose by
5.6%. Several international forecasts suggest that this trend will continue in 2014-2015 and
beyond.

Second, Vietnam is now in a period of golden population structure 60% of its population are
working age. It also has a favourable geographical location right at the heart of East Asia home
to a number of large and vibrant economies. Furthermore, the country is a market economy, a
member of the WTO, and a party to multiple frameworks for international economic integration,
including free trade agreements with partners both within and outside the region. In particular,
the country is part of the Trans-Pacific Partnership negotiations. These factors all go some way
to explaining why so many choose to invest in Vietnam and should draw in more foreign
investors.

Third, the Vietnamese government is committed to creating a fair and attractive business
environment for foreign investors, and constantly improving its legal framework and institutions
related to business and investment. The government has been working hard on restructuring the
economy and its model for growth, as well as enhancing national competitiveness.

To add new chapters to this success story, the Vietnamese government is continuing to revitalize
its business and investment climate. One way it is doing this is its work on three strategic
breakthroughs: putting in place market economy institutions and a legal framework; building an
advanced and integrated infrastructure, particularly transport; and developing a quality
workforce. These should all be completed by 2020.

The government remains determined to fulfil its treaty obligations and promote the negotiation
and conclusion of a new generation of free trade agreements. Vietnam views the success of FDI
enterprises as its own success. As such, the government is committed to ensuring a stable socio-
political environment, protecting the legitimate rights and interests of investors, and creating an
enabling environment for FDI enterprises in the country.

In the medium and long term, Vietnam will continue in its efforts to attract and efficiently use
FDI inflows to advance socio-economic development. The country will target high quality FDI
inflows, focusing on FDI projects that use advanced and environmentally friendly technologies,
and use natural resources in a sustainable way. It will also target projects with competitive
products that could be part of the global production network and value chain.

International forecasts suggest that as the world economy recovers, FDI flows are returning to
dynamic economies. Given the positive prospects for both global and regional economies, we are
confident Vietnam will continue to find success in this area.

Author: Nguyen Tan Dung is the Prime Minister of Vietnam

https://www.weforum.org/agenda/2014/05/foreign-investment-booming-vietnam/

A striking feature of Vietnams remarkable progress over the last few decades is the rapid pace
of urbanization. In 1986, there were fewer than 13 million urban residents. Today there are 30
million. Cities have become strong growth poles, with urban areas growing twice as fast as the
national average rate, and contributing over half of the countrys gross domestic product.

The increasing importance of Vietnams urban areas in driving growth is not surprising. It is
widely acknowledged globally that urbanization, if managed well, can lead to higher productivity
and growth, through positive agglomeration effects such as larger, more efficient labor markets,
lower transaction costs and easier knowledge spillovers. However, a closer look suggests that the
current urbanization process in Vietnam needs a major rethink to ensure that it contributes fully
to the goal of achieving a high-income country.

Vietnam needs to reshape its urbanization process to create more efficient cities cities that have
sufficient population densities, are well connected internally and regionally, and well managed.
In addition, in line with Vietnams strong preference for social equity, cities will need to ensure
inclusion of all residents, with no groups or area left behind.

Today, the urbanization of land in Vietnam is fast outpacing the urbanization of people, reducing
urban population density and suppressing productivity gains. The current land conversion-based
urban development with industrial zones developed ahead of demand and proliferation of
small-scale, fragmented urban expansion has surpassed population and job growth. Major cities
like Hanoi and Ho Chi Minh City are faced with a sharp imbalance between the citys core area,
where population density can be as high as 44,000 people per square kilometer, and suburban
areas with a density that can be as low as 100 people per square kilometer leading to urban
sprawl.

Vietnams cities and provinces are like independent oases rather than parts of an integrated
marketplace. For example, it takes nearly two hours to travel from Ho Chi Minh Citys central
business district to the center of Binh Duong New City at off-peak hours, a distance of only 40
km. Weak regional connections weigh heavily on economic efficiency and make cities less
attractive places to live and conduct business.

Meanwhile, rural residents increasingly lag behind their urban counterparts in income and access
to services, leading many to migrate to cities. Migration presents challenges for urban
management but also opportunities to enhance labor mobility. Vietnams current household
registration system, means that migrants are not effectively integrated into cities and could
overtime fuel rising urban poverty and inequality.

Fortunately, these trends can be reversed.

City managers can improve the economic efficiency of their cities by better integrating migrants,
through changes in the resident registration system (ho khau). Urban renewal and upgrading
programs can be initiated to enhance livelihoods and living conditions in low income
neighborhoods.

For example, four years ago, Alley 76 in Ho Chi Minh City was only narrow enough for one
motorbike to get through. Store owner Bui Thi Mai knows firsthand how a clean and efficient
city can make or break a business. When it rained, the alley was often flooded with floating
garbage and mosquitoes. Crime was rampant. Today, after undergoing major upgrading under an
urban renewal project, the street is cleaner, safer and trucks carry goods to her door. Her family
income has soared and her life has been completely changed.

Cities can also play a greater role in nurturing a domestic private sector, supporting the growth of
firm clusters that can integrate into global value chains, and providing the logistics support to
enhance productivity and accelerate growth. These would lead to higher productivity, greater
innovation and the development of a consumer class all characteristics synonymous with
vibrant cities in high-income economies.

To allow urbanization to continue to be an even stronger a propeller of Vietnams development

over the next 20 years, Vietnam would need to recalibrate the roles of the state and the market in
managing how the country urbanizes. Here are some suggestions for consideration:

Refocus the role of the state and improve its capabilities in areas that only the
government can manage. These include strengthening the capacities and coordination for
urban planning (including information and land use), public finances, and social services,
as well as increasing investment in infrastructure to support urban plans.
Redistribute responsibilities, with powers and resources, among national, local, and
metropolitan governments to ensure that issues to be addressed at the regional scale are
not undermined by local interests.
Relax the states control and involvement in activities that are managed more efficiently
by markets, particularly in the factor marketsthose for landwhere regulation has
produced costly distortions. Here the solution is not new regulations but fewer
restrictions.
Over the next two decades, the focus needs to be placed on building and strengthening a vibrant
portfolio of cities and towns, which perform mutually complementary functions and reach their
potential to become modern, smart and livable and enhance the pace of national economic
development.

Vietnams cities can indeed deliver on the promise to help Vietnam achieve efficient, inclusive
and sustainable growth.

Publication does not imply endorsement of views by the World Economic Forum.

To keep up with the Agenda subscribe to our weekly newsletter.

Author: Axel van Trotsenburg is the World Bank East Asia and Pacific Regional Vice President.

Evidence suggests that mutual decision making is, indeed, much higher among households with joint-
title LTCs (90%) compared with single-title LTCs (64%).

Vietnam is not the only country that has given women the right to include their name in property titles;
in fact, most national legislations do provide for joint titles. What is unique about Vietnam is the
governments concerted effort to implement the measure as widely as possible, as well as an
understanding within society that joint titles can play a major role in improving womens economic
status. In that respect, the success story of joint titles in Vietnam can serve as an inspiring example for
other countries that are serious about promoting womens rights, and are looking for ways to move
from equality on paper to equality in practice.

https://www.weforum.org/agenda/2016/01/how-owning-land-is-empowering-women-in-vietnam