David Dapice and Nguyen Xuan Thanh, February 2009
Successful countries provide economy and society with infrastructure needed to maintain growth. Development experience suggests that investing 7 percent of GDP in infrastructure is the right order of magnitude for high and sustained growth. Over the last twelve years, the government of Vietnam was able to sustain infrastructure investment at 10 percent of GDP. This remarkably high level of investment has resulted in a rapid expansion of infrastructure stocks and improved access. Despite this achievement, Vietnam is experiencing more and more infrastructure weaknesses that negatively affect its ability to sustain high economic growth in the long term. Transport and electricity – the two most essential infrastructure activities – appear to be the weakest infrastructure sectors in Vietnam with blackouts and traffic jams occurring more and more frequently.