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Vietnam is Merging Provinces for Greater Growth and Efficiency
Here are two pictures of the Bien Hoa – Vung Tau highway, recently posted on Tuoi Tre Online. The project, with a total investment of $700 million, connects Dong Nai and Ba Ria Vung Tau (BRVT) provinces. Yet, these images tell two very different stories.
On the BRVT side, progress has been swift. Meanwhile, just across the provincial border in Dong Nai, the project has faced setbacks due to land clearance issues and a lack of resources. This contrast highlights the challenge of coordinating infrastructure projects that span multiple provinces, often leading to inefficiencies, and resource misallocation.
To address this, Vietnam is embarking on an ambitious plan to merge provinces and local administrative units, aiming to cut provincial-level units by around 50% and commune-level units by 60-70%. The goal is to reduce administrative steps, resource optimization and foster economic growth.
Implementation Timeline:
• Commune-Level Restructuring: Complete by June 30, 2025, with operations starting July 1, 2025.
• Provincial Mergers: Finalized by August 30, 2025, with new provinces active from September 1, 2025.
Short-Term Impact:
The transition will come with challenges, such as adapting to new mechanisms, integrating personnel, and managing increased expenses. These are typical issues for large-scale transformations and are expected to be temporary.
Long-Term Outlook:
The merger aims to streamline governance, improve economic development through better resource allocation, and save government budget by reducing administrative costs. This initiative aligns with the vision of “Streamlining the government for growth” as discussed in Doi Moi 2.0.
Despite short-term challenges, the long-term outlook remains positive, promising improved efficiency, economic growth, and optimized government spending.
