From demographic dividend to high-income nation aspirations

Power from golden population

Vietnam today is a young country. More than 24 million people of school age – nearly a quarter of the population – are a valuable asset. More than 65% of the population is of working age, providing a “golden window” for development that will be open for just over a decade.

But the golden population does not translate into growth by itself. The question is: what do we do to transform that potential into momentum? The responsibility lies with policy, with education , with a business environment open enough for the young generation of Vietnam to be confident in this land and step out into the world, creating new productivity, new value, instead of just providing cheap labor.

Vietnam today is a young country. Photo: Thach Thao

Just four decades ago, Vietnam was one of the poorest countries in the world . In 1986, GDP per capita was less than $700, and the poverty rate was nearly 60%. Today, that figure is nearly $5,000, and the poverty rate has dropped below 1%.

The region’s fastest-growing middle class: around 13% of the population, adding 1.5 million people each year. This is a new driver of consumption, a pressure for policy change, and the foundation for a more modern society.

Vietnam's economy has maintained an average growth rate of 6.4% for decades – a remarkable achievement in retrospect.

Education has long been a source of pride. In the PISA rankings, Vietnamese students have repeatedly ranked among the top in the world. The primary school enrollment rate is over 98%, secondary school 95%, and high school 80%. The quality-adjusted school years are 10.2 – second only to Singapore in ASEAN.

Resolution 71 on breakthroughs in education and training development of the Politburo sets the goal of Vietnam having a modern, equitable and high-quality national education system, ranking among the top 20 countries in the world by 2045.

By 2030, the country will complete universal preschool education for children aged 3 to 5 and compulsory education through secondary school. At least 85% of people of the right age will complete high school or equivalent, achieving initial results in improving technological capacity, artificial intelligence and English proficiency.

In health, average life expectancy increased from 70.5 (1993) to 74.5 years (2023); infant mortality rate decreased sharply; 93% of the population participated in health insurance. If in 1993 only 14% of the population had electricity, now almost 100%; the proportion of rural people with access to clean water increased from 17% to 51%.

Behind those numbers is a clear message: development is not just about GDP growth, but about improving the quality of life and expanding opportunities for all people.

Goal 2045 – high-income country

Vietnam aims to become a high-income country by 2045. To achieve this, GDP per capita must increase by double digits on average over the next two decades. This is a comprehensive development path: from green economy, inclusive development, to digital transformation and carbon emission reduction.

International commitments also clearly demonstrate that determination: reduce methane emissions by 30%, end deforestation by 2030, achieve Netzero by 2050. According to UNDP, Vietnam's HDI in 2023 will reach 0.766 - in the high development group, with the plus points of low inequality and progress in gender equality.

But challenges lie ahead. A rapidly aging population, shifting global trade, automation and climate change are all present pressures. Vietnam’s productivity growth has been just 0.9% per year over the past decade – lower than most comparable countries. Vietnamese workers remain largely employed at the lowest rungs of the value chain.

Why do many “tech eagles” choose Thailand, Malaysia, Indonesia instead of Vietnam? Why are many private enterprises that started up 30 years ago still unable to compare in scale and international reputation with Chinese and Korean technology corporations?

The reason lies not only in capital or technology, but more deeply in institutions - legal environment, procedures, investment policies and enforcement capacity.

Professor Tran Van Tho (Waseda University, Tokyo) commented: Vietnam has never had a period of growth of over 10% lasting a decade – something that has made Japan, South Korea, and China a miracle. Therefore, Vietnam is still stuck at the low middle income level.

The new World Bank report further emphasizes that the 2045 target is very ambitious. To achieve it, Vietnam must maintain productivity growth of 1.8% per year and an investment ratio of 36% of GDP until 2030. If it were based on investment alone, the ratio would have to reach 49% of GDP – an unrealistic level. If it were based on productivity alone, it would need to break through the current 2%.

Under the current scenario, potential growth is only 5%/year, and Vietnam will have difficulty reaching the high-income threshold by 2045.

For many years, Vietnam has chosen the motto “stability for development” and has succeeded. But when the old motivation is exhausted, it is time to switch to a new approach: “development for stability”. Stability cannot be achieved without new motivations, without productivity growth, without institutional reform.

This is a turning point in thinking, requiring changes both inside and outside the economy: reforming the administrative apparatus, improving the efficiency of public investment, encouraging innovation, promoting the digital economy, building green infrastructure, and developing the private sector into a key driving force.

Over the past eighty years, Vietnam has demonstrated the strength of national will: gaining independence, unifying the country, successfully implementing Renovation, and bringing the country from poverty to the middle-income group.

Nowadays, the “Party’s will” is linked to the “people’s heart” in the aspiration for strong development. The issue is no longer “can we do it?”, but “how do we act to do it?”

The recent 80th National Day celebration is not only an occasion for pride, but also a starting point for a new era – an era in which Vietnam breaks through its institutions, liberates resources, takes advantage of the golden population opportunity, overcomes the challenge of an aging population, and affirms its position among the leading developed countries in Asia.

Vietnamnet.vn

Source: https://vietnamnet.vn/tu-dan-so-vang-den-khat-vong-quoc-gia-thu-nhap-cao-2439332.html