A recent event organised by the British Business Group of Vietnam in Ho Chi Minh City gathered together a group of expats from various industries and careers, all of whom had one thing in common; they had all being living here for 20 years or more. These people have witnessed first-hand the enormous changes Vietnam has undergone since 1996; the rise of the automobile, the age of the internet, and most importantly, average local income which has risen almost 7% a year for a quarter of a century. Where is this all leading?
A new report published in February by the World Bank Group and the government of Vietnam tries to make sense of all this, and tries to create a road map for the country over the next 20 years. Entitled, Vietnam 2035, it recommends steps to help lift Vietnam to upper-middle-income status in two decades and suggests that Vietnam build a more competitive private sector, support smart urbanization, promote innovation and take advantage of increasing trade opportunities to enact broad structural reforms. In terms of benchmarks for achieving this status, GDP in Vietnam would need to grow at 7 percent per year, raising the average annual income level to US$7,000 (VND156 million) a year based on modern-day prices. At present the average annual income is US$2,052 (VND46 million).
Rising Traffic Congestion
Such foresight is vital, especially if it can be acted upon. You only have to look at Bangkok, Jakarta or Manila to see what a lack of long-term vision allied to rapid development can do to a city. Vietnam’s cities have all the ingredients for a similar descent; limited infrastructure capacity (such as the Old Quarter in Hanoi), plentiful construction projects, huge motorbike usage and ever-rising car ownership.
So, what can help Vietnam achieve its goal of upper middle-income status?
Certainly the upcoming metro systems in Hanoi and Ho Chi Minh City can help ease congestion if they are well planned. Yet even Singapore has found that they do not solve all problems — there are still status issues that cause many people to eschew public transport in favour of their own vehicles. Also, the near complete absence of multi-level car parks in Ho Chi Minh City, compared to Singapore and Bangkok, is indicative of a problem that will not go away any time soon.
If public transport is to be a success here, it will have to prove itself to be quicker and more efficient than private transport, as well as being affordable.
Introducing an Intelligent Transport System (ITS) might alleviate the problem. Already widely used in cities such as London and Stockholm, ITS collects and correlates traffic data from CCTV and heat sensors dotted around the city, sending drivers real-time updates about accidents, construction work, and traffic jams via their cell phones. As can be seen on a daily basis, all Vietnamese drivers carry cell phones.
A decline in air quality is an unfortunate by-product of rapid industrial development in any country, and Vietnam is no different. The report suggests several initiatives that might help Vietnam’s cities not end up with Beijing-style smog. These include a coordinated effort to decrease traffic volumes in the big cities, reduce industrial emissions, and switch to renewable energy. Ho Chi Minh City receives an average of 6.17 hours of intense sunlight a day, so there is an opportunity for the government to provide subsidies for citizens who install solar panels on their homes.
On the passive side, trees are known to improve urban air quality (the so-called ‘green lung’) and both Hanoi and Ho Chi Minh City have numerous beautiful trees which can be preserved. Many more could be planted.
The Powers That Be
Vietnam’s authorities are fully aware of the challenges the country faces — Prime Minister Nguyen Tan Dung was instrumental in jointly creating the initiative that led to the Vietnam 2035 report.
Minister of Planning and Investment Bui Quang Vinh summed matters up: “Our country is at a turning point of reform and development. We face significant opportunities, but also big challenges. To reach our goal of a becoming a prosperous, creative, equal and democratic Vietnam, our only choice is to implement the reforms recommended by the Vietnam 2035 report.
“Without these reforms it will be hard for us to avoid falling into the middle income trap and lagging behind. We see these reforms as a continuation of the historic Doi Moi reform process and we believe current and future generations of Vietnamese people have the will, determination, courage and capacity to successfully implement these changes.”
World Bank Group President Jim Yong Kim noted: “In the last 30 years, Vietnam has become one of the world’s great development success stories, rising from the ranks of the poorest countries. Improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth. The report recommends that Vietnam build modern and more transparent institutions — those steps will help the country meet its ambitious goals.”
Vietnam has made impressive strides over the last 20 years. Everyone who has been here that long will be able to tell you that. But now the world is watching. Will this rising powerhouse still be able to impress its spectators in 2036? Time will tell.