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Socialist Republic of Vietnam

In less than half a century since the end of the Vietnam War and over 35 years since the political and economic reforms (Doi Moi), Vietnam has become a vibrant economy and a sought-after market to the outside world. With a rapid pace of growth continued in the 2000s, the country attained the lower-middle income category in 2010. GDP per capita grew from 481 USD in 1986 to 2 655 USD in 2020. Rapid economic growth was broadly inclusive, and livelihoods in Vietnam improved dramatically.

The growth rate in Vietnam was 5.3% a year on average over the past six years, driven by international trade and foreign investment. Protected by its high levels of exports, the country barely suffered during the COVID-19 pandemic and its prospects for growth are among the highest in Asia.

Vietnam is making good progress in the achieving the Sustainable Development Goals (SGDs) target. It is estimated that Vietnam will achieve five SDGs by 2030. Notably SDG 1 on no poverty, SDG 2 on zero hunger, SDG 4 on quality education, SDG 13 on climate action and SDG 17 on partnerships for the goals. However, Vietnam will struggle to achieve ten SDGs by 2030, among which are goals linked to social inequality, gender equality, affordable and clean energy, and the protection and sustainable development of forest and biodiversity conservation.

Over the last decade, poverty levels have declined impressively. Based on the World Bank’s lower-middle income country (LMIC) poverty line (3.20 USD/day 2011PPP), poverty declined from 16.8% in 2010 to 5% in 2020, with over 10 million people lifted out of poverty. The COVID-19 pandemic halted wage growth and improvements in job quality, with progress in poverty reduction set back.

Vietnam is among the countries most vulnerable to the effects of climate change. Indeed, the Global Climate Risk Index 2021 ranks Vietnam 13th on the list of the countries most affected by disasters and extreme weather events. About 71% of the population and 59% of the land area are vulnerable to natural hazards, with floods and storms causing the highest number of fatalities and economic damage.

In mid-2021, the Vietnamese government launched the five-year Socio-Economic Development Plan (2021-2025), highlighting a number of priorities:

  • improving productivity, quality, efficiency and competitiveness of the economy;
  • overcoming the impacts of the COVID-19 pandemic;
  • placing emphasis on environmental protection and climate change adaptation; and
  • striving to become a developing country with modern industry graduating from lower-middle income country status by 2025.

Vietnam’s agriculture and natural resource sector, an important pillar in the poverty reduction effort of the country, represents 16.3% of GDP. In 2021, Vietnam’s service sector contributed the largest percentage to the country’s gross domestic product, at 41.2%. The service sector consists of the production of intangible goods to businesses and final consumers. Approximately 37.48% of the Vietnamese population works in the service sector. 

The last Indicative Cooperation Programme ICP (2011-2015) between the Governments of Luxembourg and Vietnam phased out in 2015. Since then, individual agreements and protocols have been agreed for the implementation of bilateral projects. Currently, the main interventions of Luxembourg Cooperation in Vietnam are in the fields of climate change mitigation and adaption, as well as sustainable finance.

Evolution of activities in Vietnam (in thousand EUR)

Distribution of the 2022 disbursements by sector

All projects in Vietnam