Hanoi, May 22, 2025-To achieve its ambitious goal of high-income status by 2045, Viet Nam will need to deepen the sweeping institutional reforms that are underway and promote greener development, according to two new World Bank reports.
The first report, Viet Nam 2045-Breaking Through: Institutions for a High-Income Future argues that Viet Nam needs to strengthen the legal and regulatory environment and streamline public investment to sustain the rapid growth required to meet its target. It notes that countries that have escaped the middle-income trap and reached high-income status have done so by continuously improving the quality of their institutions.
"Viet Nam's ambition to become a high-income country by 2045 has brought renewed focus on institutions as enablers of sustained growth," said Mariam J. Sherman, World Bank Director for Viet Nam, Cambodia, and Lao PDR. "Recent efforts show commitment, but achieving this goal will require even bolder reforms-an 'institutional big push' -to unlock the private sector's potential to drive growth and create quality jobs for its people."
The second report, Viet Nam 2045-Growing Greener: Pathways to a Resilient and Sustainable Future, highlights how investments in adaptation can help limit the impact of climate shocks on Vietnamese farms, businesses, and factories. Projections suggest that a sea level rise of 75-100 centimeters could inundate nearly half the Mekong Delta by midcentury. A 2024 World Bank survey found that about three-quarters of manufacturers in apparel and electronics-two of Viet Nam's leading export sectors-operate in areas facing significant heat stress, putting more than 1.3 million workers at risk. In the absence of adaptive actions, climate impacts could reduce Viet Nam's economic output by as much as 12.5 percent by 2050 compared with baseline projections, potentially undermining the country's ambition to reach high-income status by 2045.
"The good news is that there are actions that can be taken today to protect land, communities, and infrastructure from climate shocks," said Ms. Sherman. "What matters now is putting in place the right mechanisms and incentives to encourage more adaptation by firms and households, and to integrate climate risk management into all aspects of the economy."
The report estimates that such investments could significantly mitigate the damage, reducing the projected climate-induced GDP loss from 12.5 percent to 6.7 percent by 2050.
The report also identifies opportunities for Viet Nam to reduce the carbon intensity of its economy and move toward the government's goal of achieving net-zero emissions by 2050. Underscoring the central role of the private sector, the report suggests steps to advance the energy transition, taking advantage of increasingly cost-effective renewable energy technologies to improve industrial energy efficiency. A well-managed transition could unlock new drivers of innovation, growth, and job creation.
The report makes the case for leveraging Viet Nam's marine economy to drive a greener, more resilient future. About 30 percent of the population lives along the 3,260-km coastline, and nearly half of Viet Nam's 100 million people depend directly on its rich marine ecosystems for their livelihoods. The marine economy is particularly vulnerable to climate risks, making adaptation both urgent and highly beneficial. At the same time, the sector holds significant potential to support Viet Nam's climate mitigation efforts. Expanding renewable energy-especially offshore wind, which the World Bank estimates could reach 475 gigawatts, and wave energy-offers a major opportunity to reduce reliance on fossil fuels. Restoring mangroves and protecting seagrass beds and coral reefs are equally important, as these ecosystems increase coastal resilience while acting as natural carbon sinks.
These two reports were prepared with financial support from the Australian government through the Australia-World Bank Strategic Partnership Phase 2 (ABP2). Together, the reports form part of the Viet Nam 2045 series, which examines key policy choices and investments needed for the country to reach its long-term development goals.
