Việt Nam Faces Challenge to Sustain Growth

Why this is here: Việt Nam’s labor force to population ratio peaked around 2015 and has been in decline ever since, signaling a shift in the country’s demographic advantages.

Trần Quang Thanh, a researcher at the Development and Policies Research Center in Hà Nội, presented concerns about Việt Nam’s future economic growth at a conference in Singapore. He warned that the demographic advantages driving past growth are diminishing, creating a risk of falling into the middle-income trap. Việt Nam expects to reach upper-middle-income status soon, but increasing per capita income from $4,500 to $14,000 will prove difficult.

Thanh noted Việt Nam’s aging population and declining labor force. Roughly 40 percent of the country’s manufactured exports rely on imported parts, signaling weak domestic supply chains. Additionally, a high percentage—around 80 percent—of Vietnamese International Mathematical Olympiad medalists study abroad and do not return.

Jayant Menon of the ISEAS–Yusof Ishak Institute added that simply reaching a higher income level does not guarantee overall success. He emphasized the importance of sustainable development, citing Indonesia’s environmental issues and Sri Lanka’s debt crisis as cautionary tales. Further research is needed to address internal efficiency and economic diversification.