Viet Nam

Situation and cooperation

Two gardeners in front of the Ho Chi Minh Mausoleum in Hanoi, Viet Nam

Viet Nam is a socialist republic in which the Communist Party claims for itself the leadership of state and society under a one-party system. There is no organised opposition and no separation of powers such as is typical of a state founded on the rule of law. The people of Viet Nam cannot freely exercise political or civil rights such as freedom of opinion or freedom of assembly.

Since the mid-1980s, the Vietnamese economy has gradually changed from a planned to a market economy. Over two and a half decades, this South Asian coun­try has experienced rapid economic growth. However, in recent years, the pace of growth has slowed somewhat.

Skyline of Ho Chi Minh City

But not all sectors of the popu­la­tion are benefiting equally from the eco­no­mic upswing. Although the few urban areas that Viet Nam has are prospering, the many rural areas are facing severe structural problems.

The Ho Chi Minh City metropolitan area alone, with its estimated popu­la­tion of 10 million, generates a quarter of Viet Nam’s economic output. Growing urbanisation, the emergence of an urban underclass and the disintegration of traditional family structures are posing major challenges for Vietnamese society. The gov­ern­ment has therefore begun establishing social protection systems. At present, however, the ability of these systems to perform is still limited.

The education system cannot keep up with the rapid pace of economic de­vel­op­ment either. There is a lack of vocational training opportunities that reflect the needs of the labour market. As a result, there is considerable shortage of skilled workers. The ministry of education has launched a vocational education campaign to address these problems. The German system of vocational education and universities of applied sciences is being used as a model.

Dynamic de­vel­op­ment of the economy

Shopping street in Hanoi by night

For years economic growth in Viet Nam was consistently above seven per cent. Even after a brief nose dive as a result of the worldwide economic and financial crisis in 2008, the country's economy recovered quickly. Various gov­ern­ment programmes to stimulate the economy contributed to this.

The government's declared goal is to turn Viet Nam into an industrialised coun­try by 2020. However, to achieve this goal, it must first promote private-sector activity more strongly, modernise state institutions and invest more heavily in the education sector. In order to make the coun­try more attractive for foreign investors, it will have to strengthen the rule of law and related structures, and also combat corruption and nepotism more vigorously.

Weak infrastructure

Traffic in the old town of Hanoi

Viet Nam's strong economic growth has led to bottlenecks in the country's power supply. Its power supply networks are obsolete, which leads to considerable amounts of energy being wasted. Nearly forty per cent of electricity comes from hydropower. As a result, during the dry season from January to May in particular there are power outages. The gov­ern­ment is seeking to overcome these bottlenecks by building new coal-fired power stations, and it wants the first nuclear power station to go on stream in 2020.

Another problem is the lack of adequate transport routes. In order to improve the transport infrastructure, the Vietnamese gov­ern­ment intends to push ahead with building new sea ports and airports, and de­vel­op­ing and expanding the road and rail networks, all with donor support.


In Viet Nam, the exploitation of natural resources, along with air, water and soil pollution and the uncontrolled disposal of solid wastes, are gradually reaching alarming levels. In particular in conurbations, the problem has reached a critical level.

It is likely that Viet Nam will be par­tic­u­lar­ly badly affected by climate change. The gov­ern­ment has therefore developed a range of programmes and action plans designed to counter the consequences of global warming. The Green Growth Strategy adopted by Viet Nam's gov­ern­ment in Sep­tem­ber 2012 specifically mentions for the first time that the gov­ern­ment aims to minimise emissions of greenhouse gases.

The German Initiative for Climate and Environmental Protection is supporting efforts to promote more efficient energy use and the use of renewable energies. Furthermore, as part of the In­ter­national Climate Initiative, the German Environment Ministry is helping to fund climate change adaptation measures for coastal residents and forest protection measures to aid carbon storage.

Priority areas of German co­op­er­a­tion with Viet Nam

Viet Nam is one of Germany’s most im­por­tant de­vel­op­ment policy partners. At the German-Vietnamese gov­ern­ment negotiations which took place in July 2013, the two coun­tries decided to focus their co­op­er­a­tion on three priority areas in future, namely:

  • vocational education and training,
  • environmental and resource protection
  • and energy.

To continue its bilateral development cooperation with Viet Nam, Germany committed 63.2 million euros in new funding (for 2013/2014). Of this, 25.5 million euros was allocated to Financial cooperation and 37.7 million to Technical Cooperation. In addition, Germany will make available for Viet Nam eight million euros in funds from its Energy and Climate Fund for the protection of the country's forests and biodiversity.

Vocational education and training

Apprentices in the welding workshop of a vocational training college in Ho Chi Minh City (Saigon )

To date, only about 15 per cent of the working popu­la­tion has any formal qualifications. Around 1.5 million school leavers pour onto the job market every year.

This is why Germany, through a technical co­op­er­a­tion measure, is advising Viet Nam's Ministry for Education and Social Affairs on how to develop a national vocational education and training strategy and establish a de­cen­tral­­ised network of vocational training schools. As part of this measure, particular attention is being paid to providing the training people need to work in sectors with an especially high potential for growth, such as in­dus­­trial mechanics, metalworking, mechatronics and electronics. The Vietnamese gov­ern­ment also wants to promote jobs in en­vi­ron­ment-related fields.

An im­por­tant aspect of these activities is collaboration with the private sector. In particular the involvement of German companies could make it easier for Viet Nam to establish a dual system of vocational education and training modelled on the German one.

Environmental and resource protection

Planting mangroves to protect coastal erosion

In the future, Viet Nam will have to contend with the effects of climate change, in particular in its coastal regions. Coastal protection and the conservation and rehabilitation of the mangrove forests in the Mekong Delta are therefore a priority area of German-Vietnamese co­op­er­a­tion. At the same time, efforts are underway to develop strategies with the people living there to help them make use of the local eco-systems in a sus­tain­able manner.

Other areas in which considerable action is needed in Viet Nam are natural forest management, reforestation and the protection of biological diversity. Germany is supporting efforts aimed at allocating forest land to the local popu­la­tion; establishing commercial, sustainably managed forest en­terprises; and protecting and managing national parks.

State-run forest enterprises are being supported in their efforts to use forest resources responsibly. The aim of these efforts is to help them comply with the standards set by internationally recognised certifications such as the FSC label. In addition, use is being made of financing mechanisms such as REDD+ (Reducing Emissions from Deforestation and Degradation) to help fund climate action measures.

Germany is also involved in supporting measures to improve municipal and industrial sanitation and solid waste management in Viet Nam. However, implementation of some of these projects is very slow; therefore, Germany is cutting back its involvement in this area.


Viet Nam's growing economy means that the demand for electricity is also growing at an enormous rate. Germany is supporting Viet Nam in its efforts to boost power generation from renewable energy sources, such as wind power. Furthermore, Germany is also helping Viet Nam to modernise und expand its transmission line and grid system. At the gov­ern­ment negotiations in 2013, the two coun­tries agreed a new project that is to support small and medium-sized enterprises (SMUs) in their efforts to increase their use of renewable energies and their energy efficiency.

Germany is also advising the Vietnamese gov­ern­ment, the biggest electricity supplier, Viet Nam Electricity, and the country's energy regulator on how to develop a cost-covering system of tariffs.

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