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 and a one-party state in which the Communist Party controls state and society. There is no organised opposition and no separation of powers as would be required by the rule of law. The government, parliament and the administration of justice are controlled by the party leadership. The people of Viet Nam cannot freely exercise political or civil rights such as freedom of opinion or freedom of assembly. Freedom of the press is subject to far-reaching restrictions.

Since the mid-1980s, Viet Nam's economy has been experiencing stable growth. In the past few years, the country has also been successful in curbing inflation. However, not all sectors of the population are benefiting equally from the economic upswing. While urban regions are prospering, there are many rural areas with severe structural problems. Many people are therefore moving to the cities, hoping that their standard of living will be better there.

Skyline of Ho Chi Minh City

Increasing 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 country's illiteracy rate is about 5 per cent for over-15-year-olds, which is relatively low. However, the education system cannot keep up with the rapid pace of economic development. The lack of skilled workers with qualifications that meet the demand of the labour market is a great challenge. One reason is that many vocational education programmes are not geared to the needs of the labour market. The reform of the vocational education sector is therefore of vital importance with a view to continued economic development and increased productivity. Cooperation with the private sector is an important focus of Vietnamese-German programmes in this field. The Vietnamese government is thus taking guidance from a key element of Germany's "dual" (school-based and company-based) vocational training system.

Dynamic economic de­vel­op­ment

Shopping street in Hanoi by night

For many 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.

The government's ambitious goal is to turn Viet Nam into an industrialised country by 2020. To that end, it will have to increase its efforts to promote private-sector activity, modernise government institutions and invest even more in education. And in order to make the country more attractive for investors, the government will have to strengthen the rule of law and related institutions and take stronger action against corruption and nepotism.

In September 2015, the Vietnamese government announced that it would focus its policies on the goal of sustainability, with a view to implementing the 2030 Agenda. To that end, the government adopted a Socio-Economic Development Plan (SEDP) in April 2016 for the period of 2016 to 2020.

Viet Nam has a wealth of mineral resources, including oil, natural gas, bauxite, coal and iron ore. Its main exports are electronics, textiles, shoes, furniture, timber products, fish and seafood. Viet Nam also exports agricultural products such as rice, soya beans, coffee, tea, pepper and cashew nuts.


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. At present, more than 40 per cent of electricity still comes from hydropower. This is resulting in power outages, especially during the dry season from January to May, impacting industrial production and people's daily lives. The government wants to close the gap through coal, natural gas and renewable energy sources. The country is also undertaking great efforts to expand its energy infrastructure. For instance, it is working on the expansion of transmission capacity and on expanding and modernising its transmission grids.

Another challenge is the inadequate transport infrastructure. Many roads are still unpaved, so that many communities are difficult to reach by car. In order to improve the transport infrastructure, the government has stepped up its efforts to find private investors for larger road construction projects and for the expansion of public transport.


Viet Nam suffered decades of war and destruction. Deforestation, land contamination and reduced biodiversity are a legacy of that time. Moreover, the rapid economic development of the past few decades has resulted in serious environmental degradation. As a result of the growing rural exodus, the situation is particularly problematic in metropolitan areas.

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 effectively. The Green Growth Strategy adopted by Viet Nam's government in 2014 contains the country's first-ever measurable targets for the reduction of greenhouse gas emissions.

Among other things, the German Climate Technology Initiative is providing support to the Vietnamese government with a view to enhancing energy efficiency and expanding the use of renewable energy.

Priority areas of German co­op­er­a­tion with Viet Nam

Viet Nam is one of Germany's most important partners for development cooperation. The following three priority areas for development cooperation were agreed with the Vietnamese government:

  • Technical and vocational education and training (TVET)
  • Environment
  • Energy

The most recent commitment made by Germany for the continuation of bilateral development cooperation was in 2017, for an amount of up to 161.45 million euros. Of this, 28.2 million euros was allocated to Technical Cooperation. The remaining amount will go towards to Financial cooperation, mostly in the form of reduced-interest loans.

Technical and vocational education and training (TVET)

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

There is an urgent need for skilled labour in Viet Nam. However, so far only a small proportion of all workers have completed formal vocational training. Every year, another 1.4 million school leavers pour into the job market.

This is why Germany, through a Technical Cooperation programme, is providing advice to Viet Nam's Ministry of Labour and Social Affairs. Among other things, it is advising the Ministry with regard to the review of the national vocational education and training strategy. Germany is also supporting a number of vocational training institutes in introducing upskilling programmes that are in line with needs, and in developing vocational training programmes based on occupational standards similar to those in Germany. There is a special focus on training skilled workers for industries with high growth potential, in areas such as industrial mechanics, metalworking, mechatronics and electrical engineering. Support is also being provided for training in environment-related occupations.


Planting mangroves to protect coastal erosion

In the future, Viet Nam will have to contend with the effects of climate change, especially in its coastal regions – for example floods and damage from storms. In the densely populated Mekong Delta, such natural events will have a severe impact on people's living conditions.

Coastal protection and the conservation and rehabilitation of the mangrove forests in the Mekong Delta are therefore a focus of German-Vietnamese cooperation. In parallel, efforts are under way to develop strategies with the people living there to help them use local ecosystems in a sustainable manner.

Other areas in which considerable action is needed in Viet Nam are sustainable forest management, reforestation and the protection of biodiversity. The forest cover in Viet Nam has already shrunk considerably. This has been caused not only by the deforestation and soil contamination resulting from past wars, but also by illegal logging and slash-and-burn land clearance. 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. In order to also address climate action aspects, use is being made of financing mechanisms such as REDD+ (Reducing Emissions from Deforestation and Forest Degradation).


Viet Nam's growing economy means that the demand for electricity is also growing at an enormous rate. The Vietnamese government expects that power consumption will rise by more than 10 per cent a year between 2016 and 2020. Germany is assisting Viet Nam in its efforts to expand the use of renewable energy and to enhance the efficiency of power generation, transmission and distribution.

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