Vietnam’s gross domestic product (GDP) is only US$100 billion a year. To produce that $100 billion, the economy has over 100 banks and foreign bank branches. On average, each bank serves to make less than $1 billion in GDP. In addition, there are hundreds of financial and stock companies.

Vietnam has also 100 seaports (depending on classification methods, the figure may rise to 260 or fall to 70 ports). If we temporarily take the number 100, each seaport also serves the production of $1 billion only.

There are 18 coastal economic zones, nearly 30 border-gate economic zones, 260 industrial zones and around 650 industrial groups. In the balance with the GDP, Vietnam’s industrial organization is tattered, in which each economic and industrial zone produces a small amount of GDP. Under any standard, that distribution of industry shows the spread, dispersion and waste of resources. The state budget is feeding economic and industrial zones rather than these zones are assisting the economy’s development. It is a big paradox, reflecting the seriousness of the disease of Vietnam’s economic structure and resource distribution.

Attracting investment in steel production in a country that is in shortage of energy, fresh water resources and in abundance of low-quality human resources, shows wrong signs in economic structure. The controversy between the steel and electricity sectors is still fierce and does not finish yet, meaning that the way to solve the problem is not correct.

In the 2001-2010 period, Vietnam had an additional 233 new colleges and universities. On average, it has two new universities a month. This is a record for the compliance in building a development structure of the highest level.

In this period, in the name of serving modernization, Vietnam had one new residential area per month, which lack basic structural factors like roads, water drainage systems, schools, clinics and the green space.

Looking at that ambitious growth approach, we can question how much capital that we need to spend to achieve planned targets within a fixed period of time and what consequences for the spread of investment while the governance ability is limited?

When the question is answered, the answers for other fundamental questions, such as in the Vietnamese economy, who produce GDP and how much GDP they produce, will appear. These questions are similar to the questions that the economy, the state and provincial budgets are breeding economic and industrial zones or vice versa?

The national economy is divided into over 60 smaller economies (meaning 63 provinces and cities), while Vietnam is striving for becoming a recognized market economy which satisfies international standards.

The contradiction is the more the economy develops, the more investment in infrastructure, the more the economy is separated, the more competition among provinces.

The growth model with main pillars of natural resources, cheap labor, big and easy investment, powerful but ineffective state-owned sector will cause serious consequences. The lack of supportive industries and enterprises which are capable to join the world and regional production chains is also a big problem for Vietnam’s competition and development.

Trade deficit is getting serious resulting in the abnormal dependence on the outside markets, and it is the indispensable aftermath of the above growth model and economic structure.

Source: VietnamNet