1. Vietnam’s transportation infrastructure overview
Vietnam’s transportation infrastructure has undergone a dramatic transformation in recent years, with the government making substantial investments to improve the country’s transportation network. This investment has been a vital part of the government’s strategy to boost the country’s economic growth, with a significant portion of the budget being allocated to infrastructure spending.
The numbers speak for themselves: as of 2022, Vietnam’s infrastructure spending stands at an impressive 6% of its GDP. This represents a significant increase from the 2.6% of GDP that was spent on infrastructure back in 2016. These investments have yielded significant benefits for the economy, enabling businesses to transport goods and people more efficiently, reducing costs, and increasing competitiveness.
To achieve this progress, Vietnam has invested heavily in transportation, especially in roads, airports, and seaports. The country’s public and private investment in infrastructure has reached 5.7% of GDP in recent years, the highest in Southeast Asia and the second highest in Asia after China (6.8% of GDP). This investment in infrastructure development is beneficial on two fronts: firstly, it satisfies the requirements for investment projects, and secondly, it creates higher economic growth and more employment.
Based on the World Economic Forum Global Competitiveness Report 2019, Vietnam’s overall quality of infrastructure ranks at 77th out of 141 countries, with 66th in transport infrastructure and 87th in utility infrastructure.
Rapid urbanization in Vietnam is a significant factor in driving the development of the transport and utilities sector. With approximately 50% of the population now living in major cities, the rising population has exceeded the capacity of the existing connectivity networks and utility systems. As a result, improving transportation infrastructure has become an even more critical priority for Vietnam’s government to ensure sustained economic growth and development.