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Aidan Jones

A bonfire of red tape to unleash investment and complete stalled projects across Vietnam may drive economic expansion but is unlikely to offset the damage caused by US tariffs and the fuel crisis which have threatened the country’s growth ambitions.
Vietnam’s Communist Party General-Secretary and President To Lam, the most powerful leader in a generation, has set an annual growth target of 10 per cent until 2030 to galvanise a nation whose ponderous bureaucracy has snarled private investment and slowed development of infrastructure projects.
Last month, the government issued eight resolutions to cut 680 administrative procedures and simplify hundreds more to speed up approvals for new businesses in sectors ranging from casinos to importing cars.
To Lam, who is currently in India signing deals ranging from rare earths to payments systems and fruit, wields decisive power in Vietnam, which should speed up decision-making as the country strives to become a high-income nation by 2045.
A blizzard of draft decrees aimed at slashing red tape is queuing up for approval by a government that has already reduced the number of ministries by a quarter and slimmed down the civil service.

“Vietnam’s government has recently issued a slew of resolutions and directives to cut administrative procedures and simplify business conditions,” said Heng Jian Xin, senior country risk analyst at BMI, a unit of Fitch Solutions.
“This will contribute towards Hanoi’s goal of having 3 million enterprises in the country by 2045.”
Vietnam’s economy grew by 8 per cent in 2025, but analysts warn that To Lam’s drive to boost growth may take time to materialise.
“For example, the original Doi Moi reforms began in 1986 but were implemented over multiple years,” Heng said, referring to the market liberalisation that transformed post-war Vietnam from a poverty-afflicted nation to one of Asia’s fastest-growing economies.
“As a result, Vietnam only experienced brisk growth during the 1990s. We are thus sceptical of Vietnam’s economy hitting the government’s 10 per cent growth target for 2026-30.”
Part of the risk stems from heavy government borrowing to fund hundreds of billions of dollars in promised megaprojects, including a new town and a massive stadium in the Hanoi suburbs, high-speed train lines, upgraded ports and airports.
It is a debt burden only likely to mushroom as the fuel crisis raises oil prices and increases the need for state subsidies to keep industry moving, or if the US economy tips into recession in the event of an AI bubble bursting.

Vietnam’s prognosis in a sputtering global economy is also uncertain. Supply chains that once fled China to divert through the Southeast Asian hub are now under pressure as the Donald Trump White House seeks to reimpose tariffs through other means, after the Supreme Court blocked previous attempts.
The country’s gross domestic product grew 7.83 per cent year on year in the first quarter of 2026, a decline from the 8.46 per cent growth rate in the fourth quarter of 2025, as rising oil imports boosted inflation, authorities said.
“The administration will start investigating Vietnam and other economies for exploiting ‘forced labour’ and ‘excess capacity’ when exporting to the US,” said a BMI research note from February.
“We believe sustained diversion of US imports from China to Vietnam could motivate the present and future presidential administrations to impose new trade barriers on imports from Vietnam,” it added.
But the near to medium term is bright, Vietnam watchers say, with thousands of stalled projects across the country likely to be unlocked by a draft decree to break legal and administrative deadlock on agreed development deals across the country worth around US$130 billion.
“Government expenditure in Vietnam has tended to undershoot expectations, partially from administrative challenges,” said Adam Ahmad Samdin, an economist with the Asia Macro team at Oxford Economics.
“Broadly, while investment commitments in the private sector, especially foreign investments, have been forthcoming, licensing and regulatory bottlenecks have slowed disbursement. Recent changes reflect a desire to change this.”


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Vietnam burns red tape but growth may be harder to rekindle

A labourer works at a construction site in Hanoi in April. Vietnam’s President To Lam has set an annual growth target of 10 per cent until 2030. Photo: EPA

Vietnam’s President To Lam arrives at the National Stock Exchange in Mumbai, India, on Thursday. Photo: EPA

An employee pumps petrol into a customer’s motorbike at a petrol station in Hanoi, Vietnam, on Monday. Photo: EPA

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Indian Prime Minister Narendra Modi meets Vietnamese President To Lam before their talks at Hyderabad House in New Delhi on Wednesday. Photo: EPA

India’s President Droupadi Murmu, alongside Prime Minister Narendra Modi, poses for a photograph with her Vietnamese counterpart To Lam at the presidential palace in New Delhi on Wednesday. Photo: AFP

Indian Army’s BrahMos missile system (left) takes part in the country’s 2025 Republic Day parade in New Delhi. Photo: AFP

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Men use their phones at a cafe in Hanoi, Vietnam, in January. Photo: AFP

An artificial intelligence exhibit is seen at the Zhongguancun Exhibition Centre in Beijing on Wednesday. Photo: Xinhua

A shopkeeper uses her phone while waiting for customers at a store in Hanoi on February 27. Photo: AFP

The IBM logo is seen at the World Economic Forum meeting in Davos, Switzerland, in January. Photo: Reuters

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Drivers wait to pump petrol into their vehicles in Hanoi on March 9. The cost of fuel in Vietnam has soared since the Iran war broke out late last month. Photo: AFP

Vietnamese Prime Minister Pham Minh Chinh (left) and his Russian counterpart Mikhail Mishustin in Moscow on Monday, during which they agreed to expand cooperation in various areas. Photo: EPA

An employee pumps petrol into a customer’s motorbike at a petrol station in Hanoi on March 17. Vietnam has implemented a series of measures to tackle the fuel shortage. Photo: EPA

To Lam’s blueprint for a rising Vietnam: build fast, grow rich

Illustration: Huy Truong

An artist’s impression of the golden, drum-shaped Trong Dong Stadium in Hanoi. Photo: Handout 

A worker installs an advert for 14th congress of Vietnam’s Communist Party in Hanoi on January 9. Photo: AFP

Labourers work at a construction site in Hanoi, Vietnam, in January. Photo: EPA

To Lam (second from right) looks on as a member of Vietnam’s armed forces carries a portrait of Nguyen Phu Trong during the former party chief’s funeral in Hanoi, Vietnam, in July 2024. Photo: AP 

Eric Trump, the US president’s son, speaks at the groundbreaking ceremony for Trump International Hung Yen, a tourism and golf complex in To Lam’s home province, in May 2025. Photo: VNA/AP

Customers drink at a East West Brewing Company bar in Vietnam. Photo: Handout 

Tourists take photos as a train passes along the track on the popular Train Street in Hanoi on February 13. Photo: AFP

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Vietnam’s drive to energise its economy may take time to materialise in the face of rising fuel costs and trade barriers, analysts say


Vietnam’s drive to energise its economy may take time to materialise in the face of rising fuel costs and trade barriers, analysts say.


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Vietnam burns red tape but growth may be harder to rekindle

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Vietnam’s drive to energise its economy may take time to materialise in the face of rising fuel costs and trade barriers, analysts say

Vietnam’s drive to energise its economy may take time to materialise in the face of rising fuel costs and trade barriers, analysts say