Can Vietnam’s powerful new leadership deliver its development goals?

The election of Communist Party of Vietnam (CPV) General Secretary To Lam to the presidency on 8 April marks the first time since Vietnam embarked on its reforms four decades ago that a General Secretary has been elected to concurrently serve as President from the very beginning of a term.

The unification of the two posts had only taken place briefly twice, in 2018 and in 2024, to fill vacancies. While concurrently serving as the General Secretary and President for the entire 2026-2031 term, To Lam also holds several key positions in military command and civil administration. In addition, he has secured an extensive support network among leaders in local governments and central agencies.

This makes him the most powerful leader of Vietnam since Ho Chi Minh. And he has equally ambitious goals: rapid modernisation, double-digit economic growth, and high-income status for Vietnam by 2045. Can he do it?

To Lam’s centrality of power was further reflected in the election of the Head of the Party's Commission for Organisation (PCO) Le Minh Hung as Prime Minister. In an  inauguration speech on 7 April, Hung pledged that the government would be united under the party leadership with To Lam “as its core". Defining To Lam as the "leadership core" in the National Assembly forum is a signal of To Lam’s absolute authority and suggests the likelihood that the CPV will enshrine this either in its next Charter amendment or in a resolution, in order to formally legitimise the role. This is entirely plausible given that the person replacing Hung as head of the PCO is Nguyen Duy Ngọc, Lam’s close ally.

To Lam’s leadership authority also is bolstered by political and administrative reforms pursued since late 2024 to consolidate provinces, abolish districts and streamline bureaucracy. Sixty-three provinces and municipalities were reduced to 34 and ministries were merged. The reforms are portrayed as improving efficiency, reducing corruption and giving some agency to local authorities, but they also centralise power in Hanoi.

Hung is the perfect choice—from Lam’s point of view—to lead a new government charged with realising the two centennial development goals set for 2030 and 2045. Hung has nearly 30 years of working experience in economics and banking. He was trained in Japan and speaks both French and English. Before transitioning fully into party politics, Hung served as Governor of the State Bank for more than four years.

Hung oversees a technocratic cabinet—two of the six Deputy Prime Ministers have backgrounds in either economics, banking, trade or investment; a further seven out of the 17 ministers and heads of government agencies have economics backgrounds. In addition, six ministers have specialisations in science and technology. 

However, the new government faces immediate challenges. The first is a shortfall in manpower. Nearly 150,000 people have been laid off as a consequence of the streamlining and restructuring campaign that was undertaken under Hung’s watch at the Commission for Organisation.

The second is weakness in the implementation capacity of the bureaucracy. No independent study has critically assessed the operational effectiveness of the new two-tier local government structure, which consists of authorities at the provincial/municipal and commune level after removing the middle district level in last year’s administrative reforms. Administrative procedures remain cumbersome. The restructure of administrative processes has so far produced little improvement, and the delivery of public services remains poor.

The third is the viability of growth targets. Vietnam's economy has grown from $US346 billion in 2020 to $US510 billion in 2025. Per capita GDP in 2025 stood at around $US5,000, ranking Vietnam as upper-middle-income. Last year, Vietnam's economy grew more than 8%, placing it among the world's fastest-growing. This record has made Vietnamese leaders optimistic and confident enough to set a double-digit economic growth target for 2026 and the next two decades. However, considerable skepticism surrounds the feasibility of this target.

The World Bank forecasts Vietnam's growth rate in 2026 at 6.3%. Notably, this was made before the outbreak of conflict between the US-Israel and Iran sent energy prices surging globally. Should the conflict continue, the World Bank considers Vietnam to be among the five Southeast Asian nations most severely affected. Meanwhile, the ADB and IMF forecast Vietnam’s growth of 7.2% and 5.6% respectively. Two commercial banks with operations in Vietnam — Standard Chartered and HSBC — have also issued forecasts of 7.2% and 6.7% respectively. The ASEAN+3 Macroeconomic Research Office (AMRO) has offered the most optimistic projection, forecasting Vietnam's economic growth at 7.4%.

These forecasts from international financial institutions, banks, and research organisations are grounded in the reality that the global economic picture is increasingly overcast, with slowing growth interwoven with mounting trade and geopolitical risks. Meanwhile, although Vietnam's labour productivity is improving, it still lacks the kind of breakthrough stimulus strong enough to generate double-digit growth; and the structure of the economy remains deeply dependent on exports and the FDI sector.

To address these challenges, in addition to political reforms at home, Vietnam will strengthen diplomacy, with particular emphasis on economic, science-and-technology diplomacy under To Lam. Facing the turbulence in world politics, Vietnam’s foreign policy emphasis on multilaterialism and diversification matters. While the US will remain its largest export market, Vietnam will deepen connectivity with the North, including China, Russia, Japan and South Korea. It will also prioritise and strengthen ASEAN, East Asian and South Asian diplomacy. Vietnam's West-ward diplomacy will focus on leveraging the Comprehensive Strategic Partnership with the European Union (EU), newly established in January of this year. The EU is both a major export market for Vietnam and a key source of capital and technology.

Vietnam's new governing apparatus is now complete. As To Lam has emphasised, the task now is to "act — and act correctly, decisively, and effectively". Whether Vietnam can achieve double-digit growth in 2026 and the years that follow remains to be seen. It will depend on how Prime Minister Le Minh Hung's technocratic government navigates the challenges of human resources, institutions, science and technology foundations, and the turbulence of global geopolitics.

Hai Hong Nguyen is Adjunct Associate Professor at the University of Sunshine Coast, Australia.