Vietnam Development Report 2019 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Connecting Vietnam for Growth and Shared Prosperity Public Disclosure Authorized Final Report December 2019 Vietnam Development Report 2019 Connecting Vietnam for Growth and Shared Prosperity Final Report December 2019 © 2020 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington DC 20433, USA; fax: 202-522-2625; email: pubrights@ worldbank.org. Cover photo: Nguyen Quang Ngoc Tonkin/Shutterstock.com. Cover concept: David Arts/ Shutterstock. com. Photos in the report: Spectral-Design, Nguyen Quang Ngoc Tonkin, Nguyen Quoc Thang and Hien Phung Thu/ Shutterstock.com; Ngoc Minh Nguyen and Sanh Vy/pixabay.com. Design and layout: hoanghaivuong. Contents Figures and Tables .................................................................................................................................................................................................................................................................................................................................................................................................................................... v Foreword ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... ix Acknowledgments .................................................................................................................................................................................................................................................................................................................................................................................................................................. xi About the Authors .................................................................................................................................................................................................................................................................................................................................................................................................................................... xiii Abbreviations ............................................................................................................................................................................................................................................................................................................................................................................................................................................................. xv Executive Summary ..................................................................................................................................................................................................................................................................................................................................................................................................................... 1 Chapter 1: Vietnam The State of Connectivity ........................................................................................................................................................................................................................................................ 10 Vietnam’s International and Regional Trade .................................................................................................................................................................................................................... 11 Vietnam’s Transport Network ................................................................................................................................................................................................................................................................................................. 17 Connectivity for Integration, Inclusion, and Resilience .............................................................................................................................................................. 22 Report Outline ................................................................................................................................................................................................................................................................................................................................................................................. 25 Chapter 2: Integrating with Global Markets ...................................................................................................................................................................................................................................................................... 28 Vietnam and the Global Value Chain ............................................................................................................................................................................................................................................................ 29 Value Chain Critical Transport Corridors .......................................................................................................................................................................................................................................... 33 Performance and Efficiency of International Gateways............................................................................................................................... ............................ 38 Economic Clusters and Corridor Development ..................................................................................................................................................................................................... 43 Chapter Summary .............................................................................................................................................................................................................................................................................................................................................................. 49 Chapter 3: Integrating Domestic Markets .................................................................................................................................................................................................................................................................................. 52 Rising Urban Middle-Class Consumers of Vietnam ................................................................................................................................................................................... 53 Challenges and Opportunities around Perishable Foods for the Cities ......................................................................... 55 Emergence of E-Commerce in Vietnam ............................................................................................................................................................................................................................................. 61 Challenges and Opportunities for Logistics Services ......................................................................................................................................................................... 66 Emerging Challenges and Opportunities for LSP ........................................................................................................................................................................................... 68 Chapter Summary .............................................................................................................................................................................................................................................................................................................................................................. 73 Chapter 4: Delivering on “Last-Mile” Inclusion ....................................................................................................................................................................................................................................................