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Minh Tran

Ahead of next year’s Apec summit, Vietnam has a grand plan to transform Phu Quoc, its largest island, into Southeast Asia’s leading conference and exhibition hub.
The 137 trillion dong (US$5.2 billion) blueprint includes an airport overhaul, a light-rail line, clusters of luxury hotels and a brand-new sewerage system – much of it paid for by one of the country’s largest conglomerates, in return for tracts of land, operating concessions and the cachet of building national landmarks.
But problems are stacking up 18 months before world leaders are set to descend on Phu Quoc for the November 2027 summit.
Construction sites are short of workers, building materials and diesel. The 18km boulevard meant to connect the airport to the summit complex is unfinished. And not a single new hotel room has been built.
Phu Quoc’s problems are partly the result of the region-wide energy crisis resulting from the Strait of Hormuz’s closure amid the Iran war.

But they are also symptoms of a development model that Vietnam’s leader To Lam is staking the country’s future on: one dependent on private conglomerates to finance megaprojects, in return for land and credit, as the secret sauce for a “new era” of growth.
Last year alone, Vietnam inaugurated or broke ground on some 564 key infrastructure projects with total investment exceeding US$195.5 billion.
The government has also approved a pipeline of privately funded megaprojects, including a US$35.2 billion VinGroup development south of Hanoi, centred on a golden 135,000-seat stadium set to be the world’s largest, and a US$67 billion north-south high-speed railway.
That rail project drew competing bids from two Vietnamese conglomerates, VinGroup and Thaco, each seeking operating rights and favourable land near railway stations in exchange for building it. VinGroup ultimately withdrew. An investor has yet to be announced.

Cloning chaebol
Under Lam, who serves as both Communist Party general secretary and the country’s president, Vietnam is pinning its growth ambitions on building fast and high, propelled by private enterprise.
Last May, the party’s Politburo issued Resolution 68, declaring the private sector “the most important force” of the Vietnamese economy and outlining plans to create 20 globally competitive “national champions” by 2030.
The inspiration is South Korea’s chaebol – Hyundai, Samsung, Lotte and the like – the sprawling industrial conglomerates that powered the East Asian nation’s economic miracle, turning a war-ravaged peninsula into one of the world’s most technologically sophisticated economies. Vietnam wants some of its own.
In Phu Quoc, the envisaged vehicle is Sun Group, a conglomerate best known for its luxury resorts and cable cars. It is bankrolling the new airport terminal and runway, the country’s first light-rail line and the Apec convention centre itself: a structure whose centrepiece is an 11,050 square metres (119,000 sq ft) column-free ballroom, billed as the largest in the world.
Alongside it, two hotel clusters are set to rise boasting more than 12,000 rooms in total. Of the US$5.2 billion committed to the island, Sun Group and the private sector account for US$4.4 billion. The state is contributing just US$760 million for 10 “core projects” such as roads and freshwater reservoirs – 21 projects have been approved in total.
Leveraging the private sector for infrastructure development can be a double-edged sword,
Nguyen Khac Giang, ISEAS-Yusof Ishak Institute
“Leveraging the private sector for infrastructure development can be a double-edged sword,” said Vietnamese researcher Nguyen Khac Giang, a visiting fellow with the ISEAS-Yusof Ishak Institute’s Vietnam studies programme.
“It can accelerate delivery while reducing the immediate burden on the state budget. But without a strong and transparent regulatory mechanism, Vietnam risks trading a rapid infrastructure boom for weaker social equity and accountability.”
Grit, gravel and grievances
Vietnam aims to transform itself into a developed, high-income nation by 2045, opening sectors long dominated by state-owned enterprises.
But the competition for blue-collar workers is fierce, according to Marco Foerster, executive director for Asean at management consultancy Ascentium, with developments on the Vietnamese mainland often offering workers attractive wages and the advantage of staying closer to home.
“The challenges visible in Phu Quoc are very much consistent with what we see across Vietnam’s construction sector more broadly,” he said.
A recruiter for the convention centre who requested anonymity confirmed the shortage, telling This Week in Asia that the construction boom on the mainland meant many workers only stayed for a month before going back home.
Government infrastructure spending in Vietnam rose nearly 40 per cent last year, but construction activity grew only 9 per cent, according to investment management firm VinaCapital.
This “partly reflecting the industry’s inability to absorb that spending surge,” said Michael Kokalari, the firm’s chief economist.

Materials are another issue. Gravel and crushed stone supplies meet only a third of what the Phu Quoc project requires. The US-Israel war on Iran and subsequent closure of the Strait of Hormuz has driven diesel prices to multi-year highs and left reserves at record lows, forcing machinery to sit idle.
Land is a third issue – and in Vietnam, perpetually one of the most contentious. Compensation disputes between developers and displaced residents have been a thorn in the side of infrastructure projects across the country, and Phu Quoc is no different.
At the US$2.6 billion flagship hotel complex, only 42 of the required 88 hectares had been cleared by April. A full 4km of the main boulevard to the airport remain unfinished for the same reason.
Then there is the US$830 million convention centre, which Sun Group is contracted to construct under a build-transfer arrangement.
The problem is that build-transfer contracts were effectively banned in Vietnam in 2020, after anti-corruption investigators found that hundreds of millions of US dollars’ worth of prime real estate had been improperly funnelled to developers under precisely such structures.
Hanoi revived build-transfer schemes last year to fuel the country’s growth ambitions. But in Phu Quoc, authorities are pushing it to its limits – proposing to hand over land reclaimed from the sea specifically as payment for the convention centre.

‘Catch 22’ credit
Vietnam’s leaders say they want the economy to grow at 10 per cent per year for the next five years: an ambition that ratings agency Fitch has warned may push borrowing to dangerous levels.
The country’s ratio of credit to gross domestic product already stands at 145 per cent, nearly triple the median level for other Fitch BB-rated economies. In 2025, then central bank governor Nguyen Thi Hong used stark language to describe the risk, warning publicly of the “systemic” dangers of credit-fuelled growth.
But others such as VinaCapital’s Kokalari argue that the headline ratio is misleading – a function of underdeveloped capital markets that force financing through the banking system rather than bond or equity markets.
“If the capital markets were developed, the banking number would be lower,” he said, noting there existed a “Catch-22 situation” whereby ratings agencies were concerned by the borrowing pressure on Vietnam’s banks, which in turn needed a strong sovereign rating to borrow cheaply offshore.
Kokalari said he was bullish on the conglomerate-driven growth model, viewing it as the fastest mechanism for cutting through the bureaucratic inertia that has long hobbled Vietnamese infrastructure development.
Get the big players building, he said, and the work would cascade outwards: “farmed out to a broader part of the economy”.
Vietnam last hosted an Apec summit in 2017, with US President Donald Trump headlining, and .the infrastructure built in Da Nang for that summit ultimately became a long-term economic asset, Foerster said.
“We need to ask ourselves whether Vietnam can learn to construct megaprojects at Chinese speed,” he said. “Only then will Vietnam be able to sustain its manufacturing expansion and GDP growth ambitions. Phu Quoc is one test of that.”


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Vietnam

Vietnam’s US$5 billion Apec island is running out of time

A staff member sweeps the grounds of a resort on Phu Quoc island, which is set to host world leaders for the November 2027 Apec summit. Photo: AFP

Vietnam’s President To Lam at the National Stock Exchange in Mumbai, India, this month. Photo: EPA

The government has approved a slew of privately funded megaprojects in Hanoi, including a 135,000-seat stadium set to be the world’s largest, and a US$67 billion north-south high-speed railway. Photo: AP

A construction site in Hanoi, Vietnam, last month. Photo: EPA

Swimming in the sea off Phu Quoc. Authorities are proposing handing over land specifically reclaimed from the sea as payment for the Apec convention centre. Photo: Sen Nguyen

Beyond bamboo: Vietnam’s To Lam mounts a diplomacy offensive

Vietnam’s To Lam waves after shaking hands with Indian Prime Minister Narendra Modi before their meeting at Hyderabad House in New Delhi on May 6. Photo: EPA

Vietnam’s top leader To Lam (left) receives a bouquet from Chairman of National Assembly Tran Thanh Man after swearing in as the country’s president in Hanoi last month. Photo: via AP

Workers at a garment factory in Vietnam’s Thai Nguyen Province. President To Lam wants Vietnam to be formally recognised as a high-income nation by 2045. Photo: AFP

Vietnam’s President To Lam (left) and India’s Prime minister Narendra Modi attend a joint press statement after their meeting at Hyderabad House in New Delhi, India on May 6. Photo: EPA

An electric car in Hanoi. Vietnam’s economy is forecast to grow at more than 7 per cent this year. Photo: AFP

Chinese President Xi Jinping (left) holds a welcome ceremony for Vietnamese President To Lam outside the Great Hall of the People in Beijing last month. Photo: AP

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

Vietnam joins rush for India’s battle-tested BrahMos missiles

A man waves India’s national flag in front of a replica of the BrahMos missile system in Ahmedabad last year. Photo: AFP

Residents sift through the debris of a building destroyed in an Indian missile strike in Muridke, Pakistan, on May 7, 2025. Photo: Xinhua

A US guided-missile destroyer fires a Tomahawk land-attack missile as part of “Operation Epic Fury” on February 28. Photo: US Navy 

India’s Prime Minister Narendra Modi (left) shakes hand with Vietnam’s President To Lam before their meeting in New Delhi on Wednesday. Photo: AP

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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Phu Quoc is a test case for Vietnam’s build-fast model. But with 18 months to go, the island is short of workers, diesel and hotel rooms


Phu Quoc is a test case for Vietnam’s build-fast model. But with 18 months to go, the island is short of workers, diesel and hotel rooms.


Vietnam’s US$5 billion Apec island is running out of time

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Phu Quoc is a test case for Vietnam’s build-fast model. But with 18 months to go, the island is short of workers, diesel and hotel rooms

Phu Quoc is a test case for Vietnam’s build-fast model. But with 18 months to go, the island is short of workers, diesel and hotel rooms