Vietnam’s Urbanization at a Crossroads : Embarking on an Efficient, Inclusive, and Resilient Pathway
Since the launch of the Đổi Mới (economic renovation) reforms in 1986, Vietnam has successfully transformed its economy. Real GDP per capita growth has averaged 5.5 percent a year since 1990, with the result that real GDP per capita has more than q...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/856201604684234125/Main-Report http://hdl.handle.net/10986/34761 |
| Summary: | Since the launch of the Đổi Mới
(economic renovation) reforms in 1986, Vietnam has
successfully transformed its economy. Real GDP per capita
growth has averaged 5.5 percent a year since 1990, with the
result that real GDP per capita has more than quadrupled. In
addition to being rapid, Vietnam’s growth has been
stable—the volatility in annual GDP growth per capita over
1991–2014 was among the lowest in the world. The impact on
poverty reduction in Vietnam has been even more pronounced.
Per capita income of the bottom 40 percent has grown by 9
percent a year since the early 1990s. Based on the global
poverty line of 1.90 Dollars a day, the poverty rate
declined steeply, from 50 percent in the early 1990s to just
3 percent in 2012. The decades of rapid economic growth in
Vietnam have been accompanied by urbanization and spatial
transformation. In 1986 fewer than 13 million residents, or
20 percent of Vietnam’s population, lived in areas
officially classified as urban. By 2017 that number had
grown to 30 million, or 35 percent of the population, with
urban areas contributing over half of national GDP. From
2009 to 2014, the average annual population growth rate in
urban areas was a brisk 3.3 percent (General Statistics
Office of Vietnam, 2016). The urbanization process has been
associated with the movement of workers and their households
from rural areas to urban areas and workers in the
agriculture sector to the industrial and service sectors in
urban centers. It has also been associated with natural
population growth in urban areas. In dealing with
urbanization, the country has mounted an impressive record
of keeping rural–urban and regional disparities in check
through the promotion of rural industrialization and central
transfers aimed at poorer areas. These transfers have
allowed the expansion of basic services and infrastructure.
The recommendations in this report have three layers: two
policy principles, two overarching strategies, and three
areas of policy actions. The two policy principles are (1)
fostering positive agglomeration economies and better
managing the negative congestion forces in leading urban
centers and (2) promoting regional integration to boost
labor mobility and, more generally, factor mobility, thereby
fostering agglomeration in the right places (both overall
and within each tier). These two policy principles should be
supported by two overarching strategies: (1) ensuring
universal access to quality education, health, and other
basic services and (2) adopting a spatially differentiated
strategy. In the long run, regional integration connects
people and firms in poorer areas with those in richer ones
through enhanced migration flows and better connectivity,
counteracting regional divergence. |
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