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Urban Development in Vietnam

Since Doi Moi (1986), along with policies to facilitate urban development, Vietnam's urbanisation process has made remarkable changes. Vietnam is one of the fastest urbanising countries in East Asia, each year, it is estimated that Vietnamese cities add between 1 and 1.3 million inhabitants.

source: the Internet
source: the Internet
The urbanisation since 2000

In the period 2000-2010, Vietnam began to accelerate the rate of urbanisation. In terms of space, urban areas in Vietnam increased by 2.8% annually, among the countries with the fastest growth rates in the region. area. In terms of urban population growth, the growth rate is more than 3%/year. By September 2022, the national urbanisation rate has reached about 41.5%, with 888 urban areas.


In the period 2011-2020 period, Vietnam has promoted strong economic development along with urbanisation, creating favourable conditions for socio-economic development, promoting the transformation of economic structure and labor structure towards industrialisation and modernisation. Urbanisation has created urban areas in Vietnam with expanded economic space, favourable business and investment environment, developed infrastructure, promising labour resources and a large market, thereby creating favourable conditions for developing industries and services, attracting FDI and promoting economic restructuring towards industrialisation, improving productivity and quality of economic growth.


The two large urban areas (Hanoi Capital and Ho Chi Minh City) were increasingly playing the role of key economic growth poles. Medium and small cities are interested in investment and development on the basis of fully exploiting the advantages and potentials of all regions, linking and supporting each other including rural areas, making all areas regions developed. The average urban economic growth was at 12 -15%/year, 1.2 to 1.5 times the growth of the economy.


In 2020, it was estimated that the urban economy will contribute about 70% of the country's GDP, in which, the 5 cities directly under the Central Government, although accounting for only 2.9% in area and about 22% in population, contributed to 46.8% of the country's GDP, attracting 30% of the total accumulated FDI, and 32.8% of the country's total import-export turnover. Furthermore, the budget revenue of the urban government increased sharply, significantly contributing to urban development investment activities and to the national budget (of which the revenue from land increased rapidly, reaching 192 trillion VND in 2019, nearly 2.5 times higher than in 2015). The number of localities with budget autonomy and regulation of the central budget were both increasing, with 11 localities in the 2007-2010 period, 13 localities in the 2011-2015 period, and 16 localities in the 2016-2020 period.

source: General Statistics Office
source: The Statistics Office

The success of urbanisation in Vietnam not only transforms urban space and economic space, but also contributes to improving the quality of life, creating an image of a green, clean and beautiful urban area, modern civilised urban lifestyle. The government succeeds in reducing poverty urban areas through digital and social infrastructure. The unemployment rate of the working-age labor force in urban areas tends to decrease gradually, from 4.3% in 2010 to 3.1% in 2019. In urban areas, the poverty rate 3 % is nearly three times lower than in rural areas. The average life expectancy of the whole country increases from 73.3 years old in 2015 to 73.7 years old in 2020, in which regions with a high degree of urbanisation have a higher average life expectancy than other regions.


According to the Ministry of Construction, in 2022, the national urbanisation rate is estimated at 41.7%, an increase of 1.2% compared to 2021. The rate of urban planning reached 100%, the rate of zoning planning for 22 urban centres of grade I and 2 is about 79%, and the national average rate of detailed planning is about 39% compared to the area of urban construction land.


The great challenges of urbanisation

However, the fast urban development in Vietnam reveals many problems that directly affect the lives of millions of people in Vietnam.


Firstly, due to the fast urban development and urban economy, if without strict supervision and management, there is an increase in waste and pollution from human and industrial activities. Many types of organic waste from industrial production contained in water sources are used for irrigation in agricultural production, hence polluting soil, the water sources and hence the health of human. In addition, the number of standard waste landfills in urban areas is not meeting the increasing waste of the new areas, especially in big cities, potentially causing environmental pollution. For example, the daily waste generated in Hanoi is about 6500-7000 tons, and 9000 - 11000 tons in Ho Chi Minh city, with the majority treated with low technology (about 85% of the waste generated is being buried without treatment in landfill sites).

source: the Internet
source: the Internet

Secondly, it is the gap between urban economic growth and urban spatial development. The inappropriate development of urban space could inhibit the economic development of the urban area, reducing the quality of life of the population. In addition, currently, many cities have not been yet linked together to form a synchronous system, as Vietnamese cities are often formed with a nuclear urban area surrounded by a large rural area with a heavy traditional cultural structure of villages and communes with a low level of population. There is an increasing contrast between the new urban areas with modern, luxurious high-rise apartment buildings and the slums and temporary housing of the poor and immigrants, leading to a more severe difference between the rich and the poor within the same area.


Thirdly, it is the financial source for urbanisation. While urban economic development in general and smart urban orientation in particular require large investment resources, the state budget is limited and must be allocated to many fields of socio-economic development. In addition, land fund for urban economic development is also a big challenge as the issue of land acquisition, compensation and site clearance for urban development could take a long time to be completed.


Finally, it is the state management of urban economy. Statistical institutions and activities for urban economic management are major barriers in building an economic database system for urban areas as Vietnam does not yet have a specific legal document regulating the collection of urban economic data in particular and urban areas in general, leading to missing data. Statistical indicators of urban economic development serve different purposes, therefore, data collection and calculation methods have not been standardised for implementation purposes. Moreover, the current system of classification, upgrading and urban planning is still unreasonable, stimulating local governments to pursue achievements (instead of sustainable economic development goals) to expand urban scale and over-investment, ignoring realistic indicators of population density and connectivity to stimulate growth.


Towards sustainable urbanisation

Resolution No. 06-NQ/TW dated January 24, 2022 pointed out 6 main groups of tasks and solutions for the Vietnamese urban system in the coming period, including:

i) Complete institutions and policies to create favorable conditions for the process of urbanisation, construction planning, management and sustainable urban development;

ii) Improve the quality of urban planning to meet the requirements of construction and management of sustainable urban development;

iii) Focus on building and developing a national urban system that is sustainable and synchronous in terms of network;

iv) Promote the development of housing, urban infrastructure system synchronous, modern, linked, adapt to climate change;

v) Build and perfect the urban government model, improve the effectiveness and efficiency of urban management and the quality of urban life, ensure security, social welfare, security, safety and order urban self;

vi) Develope the economy in urban areas, renovation of financial mechanisms and policies and urban development investment. Concretising this Resolution, the Government's Action Program has also assigned relevant agencies and organizations with specific tasks.


In addition, the government also set out the key challenges that could affect the future of urbanisation in Vietnam, including

  • promoting rapid urbanisation within control;

  • improving the quality of urban planning;

  • removing bottlenecks in regional connection infrastructure, urban infrastructure, and unleash urban development resources;

  • innovating urban development model towards green, smart, climate change adaptation;

  • promoting the local autonomous urban management model with the urban government model and enhancing the capacity for specialisation in urban development management;

  • building institutions and resources for the city.

Source: the Internet



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