Vietnam launches $49bn in projects to boost growth amid US tariff pain
Government aims to spur domestic-led economy by investing 10% of GDP
HANOI -- The Vietnamese government announced Thursday a massive infrastructure development plan equivalent to 10% of the country's gross domestic product.
The government will launch 250 infrastructure and housing projects worth a total of 1.28 quadrillion dong ($49 billion) on Tuesday as part of a nationwide effort to raise economic growth to more than 8% this year and achieve double-digit growth in subsequent years.
Up to now, the Southeast Asian nation's economy has relied heavily on exports and foreign direct investment, making it vulnerable to external shocks, such as the recently imposed U.S. "reciprocal" tariffs. It aims to reduce this vulnerability by stimulating domestic demand through infrastructure development.
Of the 250 projects, 161 will begin construction and 89 will be completed, a government news website reported. The report does not clarify the level of investment for the new projects starting construction next week will be. There will be 59 projects in transportation infrastructure (airports, railways, roads, and the like), 57 industrial projects, 36 technical infrastructure projects, 22 social housing projects and 44 civil and urban projects, among others, the report said. The state will provide 37% of the total funding, or around 470 trillion dong, while 63% will come from other sources, it said.
Notable projects include a research and development center operated by military-run telecom company Viettel that will conduct research on high-tech equipment, especially in semiconductors, artificial intelligence and data. The project's is worth around 10 trillion dong.
Other projects include conglomerate Vingroup's new Vietnam Exposition Center, where events, shows and exhibitions are held.
The Rach Mieu 2 bridge will also be opened to traffic. The 6.8 trillion dong project was pushed forward by four months. Other projects include a cancer hospital in central Nghe An province with 1,000 beds, a 1.57-trillion dong wind power project and a 79.8-trillion dong commercial and amusement park project in Danang.
Both domestic and foreign companies will be involved in the projects. For example, Japanese trading company Sumitomo Corp. has a $4.2 billion construction contract as part of the North Hanoi Smart City project. Sumitomo is working with Vietnamese conglomerate BRG. The long-delayed experimental smart city project, will incorporate elements such as energy, transport and living.
In addition to these projects, Vietnam is expected to begin operating the country's biggest airport, Long Thanh, in southern Dong Nai province in December. The new airport is designed to alleviate congestion at Ho Chi Minh City's Tan Son Nhat Airport. The project was also brought forward by a year.
The government also plans to open 3,000 kilometers of new highway by the end of this year.
Vietnam is going through its biggest reform in nearly four decades, led by Communist Party General Secretary To Lam, with the government expediting construction of large infrastructure projects such as airports, railways and highways.
One of the key pillars of reforms includes Resolution 68, which aims to boost the Vietnamese private sector, previously overshadowed by state-owned enterprises, by providing these private firms with more incentives and support to develop and unlock economic growth.