Vietnam has launched a sweeping administrative and economic overhaul designed to remove bureaucratic barriers and accelerate its transition into a high-value technology economy.

The government – following the 14th National Party Congress this January and the re-election of general secretary To Lam – has moved decisively to implement what is being called Doi Moi 2.0.

This strategic pivot is a bold successor to the original Doi Moi, or “renovation”, policy of 1986 – the landmark series of reforms that successfully transitioned Vietnam from a centrally planned, subsidy-based command economy to a market-oriented system, opening the nation to international trade and lifting millions out of poverty.

While the first Doi Moi built the foundation for a manufacturing powerhouse, this new phase aims to modernize the state’s institutional framework and propel the Southeast Asian country into the global tech elite.

This shift towards enforceable, quantifiable targets for growth, productivity and carbon emissions is set to significantly enhance Vietnam’s institutional quality and bolster its sovereign credit profile. according to a February 23 report by Moody’s Ratings entitled Government Policy – Vietnam: Reform Agenda Will Boost Competitiveness and Enhance Credit Strength.

Stability, fiscal discipline

Vietnam’s current credit strength ( Ba2 stable ), the report notes, is increasingly supported by the government’s capacity to fund aggressive development policies while maintaining fiscal discipline.

At the heart of this transformation is a radical restructuring of the state apparatus to eliminate systemic inefficiencies. In a major move to streamline governance, the government has begun merging central ministries and has executed a massive consolidation of local administration, reducing the number of provinces from 63 to just 34.

Accordingly, Ba Ria-Vung Tau province, seen as Vietnam’s oil and gas hub, and the industrial province of Binh Duong have been incorporated into Ho Chi Minh City to form a “super metropolis” with around 15 million residents and a quarter of the nation’s GDP. The megalopolis continues to be the country’s growth locomotive.

Vietnam, by also abolishing district-level government layers, aims to drastically lower public expenditure and speed up the decision-making process. These structural changes are being reinforced by a landmark judicial overhaul that replaced decade-old frameworks with a streamlined three-tier court hierarchy and established specialized intellectual property courts in Hanoi and Ho Chi Minh City to protect international investors.

This administrative restructuring provides the necessary legal and structural foundation for Vietnam’s strategic move into the high-tech frontier. The country is intentionally pivoting away from a reliance on basic manufacturing to aggressively court the semiconductor and artificial intelligence industries.

Foreign investment, infrastructure

Despite global trade uncertainties, foreign direct investment disbursements grew by 9% in 2025, with global tech giants like Nvidia, Samsung, Foxconn, LG and Google expanding their Vietnamese footprints.

A major milestone in this journey was the recent ground-breaking of a semiconductor fabrication facility by domestic major Viettel, signalling Vietnam’s entry into advanced industrial production. To support this digital evolution, the government is integrating artificial intelligence-driven platforms into the civil service and has introduced a digital identification system for the real estate sector to ensure transparency and curb corruption.

To provide the physical foundation for these industries, Vietnam is executing one of the most ambitious infrastructure programmes in Southeast Asia.

In 2025 alone, 564 large-scale projects were launched, with total investments reaching approximately US$200 billion, nearly 40% of the national GDP. This drive to improve expressways, airports and renewable energy grids is paired with capital market reforms that have already secured Vietnam an upgrade to FTSE Russell Secondary Emerging Market status. These steps are part of a broader ambition to establish international financial centres in Ho Chi Minh City and Danang.

While this rapid development has increased the projected fiscal deficit to 4.2% of GDP for 2026, the Moody’s Ratings report highlights that the country’s overall financial position remains remarkably stable. Vietnam’s government debt burden, currently at 33% of GDP, is notably lower than many of its global peers and remains well within statutory limits.

Additionally, the banking sector is undergoing rigorous reforms to address capitalization gaps and mitigate risks in the real estate market through the adoption of international Basel III standards.

As Vietnam merges political stability with radical institutional reform, it is positioning itself as a premier destination for high-value industry and long-term international investment.