Vietnam is a lower-middle income economy according to the World Bank. Its 2023 GDP of $430 billion accounts for 11.3% of the regional GDP of Southeast Asia. With a population of 100 million, Vietnam’s GDP per capita is $4,282, the sixth-highest in the region.
From 2015 to 2023, 22,538 aid and development projects were implemented in Vietnam by 80 development partners, totalling $49.6 billion in official development finance (ODF).
Key trends
ODF disbursements including grants, loans, and other forms of assistance to Vietnam have decreased over time. A 2015 peak in spending of over $9.3 billion has dropped by more than two-thirds to a 2023 low of $2.9 billion.
ODF has decreased relative to Vietnam’s economy, down to 0.7% in 2023 from 3.9% in 2015. Vietnam’s 2023 ODF to GDP ratio is the fourth-lowest in the region. ODF to Vietnam is most commonly delivered through concessional loans, accounting for 46% of total ODF received, while 38% is delivered as non-concessional loans and the remainder as grants.
Looking ahead, new commitments to Vietnam have been steadily decreasing, but 2023 saw a minor uptick from a record low in 2022.
- Spent
- Committed
Development partners
Japan is Vietnam’s primary development partner, accounting for almost one-fifth of its total ODF received since 2015. The World Bank and South Korea comprise Vietnam’s second tier of partners, followed by the Asian Development Bank (ADB) and China.
Japan’s assistance is delivered largely through concessional loans (90% of its total ODF to Vietnam) and has decreased over time from a 2016 peak of close to $2 billion to a post-Covid (2021–23) annual average of $540 million. In earlier years, the transport and storage sector attracted the most financing from Japan, especially for urban railway projects. More recently, Japan’s attention has turned to the government and civil society sector. In 2023, this was bolstered by a large disbursement for a budget support program.
The World Bank’s support to Vietnam has also diminished, from almost $1.5 billion in 2015 to $400 million in 2023. The World Bank has devoted considerable assistance to the infrastructure sectors of transport and storage, water and sanitation, and energy, often through concessional loans (79% of its total ODF to Vietnam).
South Korea’s ODF to Vietnam has experienced extreme volatility, dropping by 79% in one year (2019) and decreasing further since then, primarily due to a dramatic reduction in non-concessional loans. South Korea’s support is targeted to the industry, mining, and construction and energy sectors.
The ADB’s assistance is focused on energy as well as transport and storage, especially highway connectivity projects. More recently, the health sector has also attracted ADB support. The composition of the ADB’s ODF to Vietnam has evolved over time, from a relatively even split between concessional and non-concessional loans in 2015 to higher levels of non-concessional loans in 2021 and 2022, but this trend reversed in 2023.
Sectors
The top sector in Vietnam by spending is energy, which accounts for close to a quarter of Vietnam’s total ODF over 2015–23, well above the regional average of 17%. Vietnam also exceeds its peers in terms of ODF spending in water and sanitation, transport and storage, industry, mining, and construction, general environment protection, and education.
Worryingly, the most prominent sub-sector in Vietnam’s energy sector is coal-fired electric power plants, still attracting disbursements in 2023. The next most prominent sub-sectors by spending are power transmission and unspecified non-renewable energy generation, underscoring the challenge Vietnam faces in decarbonising its economy. However, in 2023, renewable energy generation was second only to power transmission, and wind energy also attracted high levels of ODF.
Vietnam’s second-largest ODF sector is transport and storage, dominated by road and rail transport and marginally higher than the regional average (20% compared with 18%).
Vietnam’s ODF spending is far below the regional average for government and civil society (6% compared with 17%) and health (6% compared with 9%).
- Vietnam
- Regional average
Policy goals
The Southeast Asia Aid Map tracks ODF with integrated policy goals across three policy domains or cross-cutting themes (as distinct from sectors): climate action, gender equality, and disability inclusion.
Over 2015–23, Vietnam received less than the regional average for ODF targeting climate action (26%), disability inclusion (4%), and gender equality (16%). Despite Vietnam’s position as the second-highest recipient over 2015–23, the volume of ODF clearly does not necessarily equate with high levels of policy goal incorporation.
Provision of intra-regional ODF
Vietnam has provided an annual average of $17 million in intra-regional ODF since 2015. Its support has mostly been extended to its neighbour Laos, with other disbursements to Cambodia, Indonesia, and the Philippines as well as contributions to regional efforts. Vietnam’s intra-regional ODF most often focuses on the industry, mining, and construction and energy sectors.
Vietnam is the fourth-largest recipient of intra-regional ODF, mostly from Thailand.