Tô Lâm Promises Massively Revamped Viet Economy
Leader claims 'new era of national rise'
By: Thiem Bui and David Brown
Just 10 days after taking the helm of Vietnam’s Communist Party (CPV) last summer, General Secretary Tô Lâm boldly promised a “new era of national rise.” So far, he seems to have had considerable success, generating both popular and elite support. His narrative aims to build emotional bonds that provide a foundation for the drastic actions the former police general may take.
The ‘new era’ that Lâm has promised his 100 million-plus fellow-citizens features ambitious economic goals that he claims will deliver phenomenal wealth to Vietnam. This is not far-fetched. Lâm evokes memories of the market-based reforms known as “đổi mới” of the late 1980s, when new Communist Party leadership abolished production quotas and allowed the market to set prices. Per capita income rose from a stagnant US$130 in 1990 to US$4,110 in 2023. That is only US$400 per capita short of “upper-middle-income status” by the World Bank’s current definition. It’s the foundation for the party’s confidence that by 2030, Vietnam will be an “upper middle-income economy,” and that it will join the ranks of the “high-income economies” by 2045.
It's said that Lâm aims to be remembered as a leader who succeeded in realizing two imperatives: an innovation-based, technology-driven national economy and a massively streamlined public sector. Meeting in January 2025, a plenum of the party’s Central Committee lifted the annual growth target from 6.5 percent to “at least 8 percent.” That is an ambitious near-term objective, to be sure, but only a launching pad for the double-digit annual growth targets set in a government resolution issued a month later and approved by the National Assembly in an extraordinary session.
It is entirely possible that Lâm and his close colleague, Prime Minister Phạm Minh Chính, can bring off what’s being called an “institutional revolution.” An aggressive agenda to streamline the party-state’s bureaucracy at all levels was adopted by a party plenum in November 2024. It is being implemented on a sweeping scale and with unusual speed. Both public and party agencies have been ordered to restructure by dissolving unnecessary units, regrouping others, redefining missions and cutting at least 20 percent of staff. Some 100,000 officials will be made redundant.
Meanwhile, a breakthrough resolution on science and technology was released late in December 2024 by the CPV Politburo assigning heavy emphasis and three percent of the national budget to innovation and digital transformation. Unsurprisingly, Lam now chairs a “central steering committee for science and technology initiatives.”
Public investment in megaprojects – infrastructure, construction and foreign direct investment – is at the core of Vietnam’s revitalized growth strategy. Multi-billion-dollar projects have been resuscitated, including a US$67 billion north-south high speed rail link, a US$8 billion rail link to China and two nuclear power plants priced at US$16 billion. Though stalled for years, these projects are now regarded as crucial to meeting national growth targets.
The “new era of national rise” will draw considerable strength from domestic sources, but conducive conditions abroad are also essential. For example, Vietnam’s goal of becoming a high-tech hub in global supply chains is heavily reliant on good party management of relations with Vietnam’s “comprehensive strategic partners,” particularly the US and China. Vietnam must manage a “China-centric” reconfiguration of its high-tech supply chains. It must also manage the Trump administration’s propensity to regard trade relationships as zero-sum while running a huge surplus in Vietnamese companies’ sales of electronic gear to the US high-tech sector.
There are risks and uncertainties, of course. The new lineup of party leaders, largely drawn from the Ministries of Public Security and National Defense, seems intent on consolidating its power base by energizing the nationalist and populist elements prominent in the 95 percent of the population who are not party members. The policy recipe is pro-business and light on regulation; as seen above, it also aims to streamline government.
During his 13 years as head of the CPV, Nguyen Phú Trọng, Tô Lâm’s predecessor, put unremitting emphasis on weeding corrupt and ideologically weak cadre from the party’s ranks. The emphasis now is distinctly more positive. Aiming to re-legitimize the party’s permanent rule, Lâm, Chính and their allies have instead emphasized a blend of right-leaning economic pragmatism, nationalism and populism.
In an extraordinary session and with apparent enthusiasm, the National Assembly has rubber-stamped the Politburo’s plans. Less than a year from now, when 1,500-odd senior cadre gather for the CPV’s 14th Congress, the “new era” will likely be well-launched. None of the delegates will question the Tô Lâm regime’s capability to turn his vision into reality. They may well be right. We ought to know by 2030, the 100th anniversary of the founding of the Communist Party of Vietnam.
Thiem Bui is affiliated with the Stockholm Centre for Global Asia. David Brown is a former US diplomat with extensive experience in Southeast Asia and is a regular contributor to Asia Sentinel