Viet Nam 2045

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report outlines pathways for Viet Nam to achieve high-income status by 2045 through leveraging global and regional integration, transitioning from low value-added exports to higher value-added manufacturing and services, and addressing emerging risks and opportunities in the global trade landscape [33][34][59] Summary by Sections Summary - Viet Nam's current growth model, based on labor-intensive exports, is insufficient for achieving high-income status. The country must transition to higher value-added activities through technology, skills, and innovation while navigating changing global dynamics [33][34] Global Trade and Investment - Global trade has significantly contributed to Viet Nam's economic development, but the country faces constraints in its current export model, including limited domestic firm participation in global value chains (GVCs) and a shortage of high-skilled labor [25][29][34] Emerging Constraints - Viet Nam's dual economy limits linkages between foreign direct investment (FDI) and domestic firms, with only 18% of firms having GVC linkages, a decline from previous years. This indicates a need for stronger integration of domestic firms into global supply chains [32][41] Global Trade Shifts - The report highlights that global trade shifts present both risks and opportunities for Viet Nam, particularly as demand shifts towards Asia. Viet Nam can diversify its export markets and enhance its participation in digital service trade and automation [44][47] Policy Recommendations - Five policy packages are recommended to facilitate Viet Nam's transition: 1. From tariffs reduction to deep regional trade integration, focusing on reducing non-tariff barriers and enhancing regional connectivity [34][62] 2. From a dual economy to integrated domestic value chains, strengthening linkages between export firms and the domestic economy [41][62] 3. From labor-intensive assembly to skill- and technology-intensive activities, promoting higher value-added services in exports [46][62] 4. From basic education to a high-skilled workforce, enhancing the supply of skilled labor through targeted education reforms [50][62] 5. From carbon-intensive manufacturing to low-carbon exports, focusing on cleaner production methods and resilience against climate risks [55][62] Conclusion - Viet Nam's successful transition to a high-income economy by 2045 will depend on proactive reforms and strategic investments in human capital and infrastructure, alongside a comprehensive approach to policy implementation [59][60]