How Vietnam is restructuring provinces, reducing beurocracy and cutting down govt jobs by 30% to increase productivity and efficiency in a changing world

Vietnam is undergoing one of the most ambitious overhauls of the administrative structure of the country. This is the first time since the Doi Moi reforms of 1986 that the country’s leadership has greenlit a sweeping plan to reduce bureaucracy, cut public sector jobs and improve administrative efficiency. The aim of such a significant overhaul is to meet the demands of the fast-evolving global economy.

Halving provinces and dissolving districts

The Communist Party General Secretary and President of Vietnam, To Lam, has signed a new resolution which aims to reduce the number of provinces and cities from 63 to 34. The government of Vietnam wants to eliminate overlaps in governance and align the administrative boundaries in more effective ways with economic potential. Interestingly, Vietnam has decided to let go of districts altogether, which are currently serving as an intermediate layer.

There is a four-tier administrative system in Vietnam that includes central, provincial, district and commune levels. After the proposed changes come into effect, a three-tier structure will be in place with central, provincial or municipal, and commune or ward-level administration. It is similar to the model followed by over 80% of countries worldwide. The government has also planned to clarify roles across levels. For example, if the central government is handling a function, provinces will not duplicate it. Similarly, if a province has undertaken a task, communes will not replicate or mirror it. Such a system will ensure timely completion of projects or tasks with reduced bureaucracy.

Reports suggest that around 5,000 commune and ward-level units will be formed through mergers, which will reinforce the grassroots level of governance. At the moment, 44% of the provinces and cities have access to the sea. The government has aimed at increasing the access to 60%, which will improve opportunities for coastal development, port access, and sea-based industries such as tourism and seafood farming.

Reducing civil servants and merging ministries

Vietnam is aiming to cut its civil servant workforce by at least 20% by 2030. Ministries and agencies will be merged to reduce internal divisions by up to 40%. The government is hoping that downsizing the number of civil servants and merging ministries and agencies will help increase efficiency, enable a better pay scale and reduce corruption.

The decree signed to implement the changes came into effect in January 2025. It outlines provisions for early retirement, resignation, reskilling and training to facilitate the reorganisation of cadres, public employees and civil servants.

The number of ministries will soon be reduced to 17, from the current 22. Furthermore, government-affiliated agencies are expected to go down to 5 from 8. The Ministry of Finance will absorb the Ministry of Planning and Investment. The Ministry of Construction will be merged with the Ministry of Transport. A new Ministry of Agriculture and Environment will be formed, which will oversee both departments. The Ministry of Ethnic and Religious Affairs will be created. The Ministry of Science and Technology will absorb select functions of the Ministry of Information and Communications. The government has decided not to touch several ministries such as National Defence, Public Security, Justice, Foreign Affairs, and Health.

Streamlining administrative procedures and cutting red tape

One of the major issues that developing countries, including Vietnam, face is the long list of administrative procedures and red tape. Vietnam has aimed to bring a thrust of reforms to reduce existing administrative procedures by 30%. It will help businesses and investors gain easier access to government agencies and get their approvals done in reduced time with much less paperwork.

Vietnam is known for its red tape. In fact, a European businessman once reportedly described the paperwork needed to import a single container as difficult, reaching the height of a speaker’s podium. By removing barriers that are in place in the form of red tape, Vietnam is aiming to increase the country’s exports and meet foreign direct investment targets.

The government is seeing 2030 as a key milestone to redefine the country’s place in a shifting global order. Vietnam is hopeful of becoming a high-income nation in the coming years. Party chief To Lam, in a statement on national television, said, “If we do not innovate, we will lose.”

Economic context and targets

Notably, Vietnam’s economy has expanded rapidly. If its 2023 GDP is compared with that of 1986, there has been an increase of 96 times. In dollar terms, the economy has grown 3.3 times compared to 2010. Regional peers including the Philippines, Malaysia, and Thailand are not even close to such rapid development. The International Monetary Fund (IMF) has projected that the country’s GDP may surpass that of Thailand and Malaysia by 2028.

The government of Vietnam has aimed for an 8% growth rate in 2025. Furthermore, it is aiming at a 10% growth rate in the coming years. Thirty percent of the exports from Vietnam are to the US and despite US President Donald Trump’s trade war on several countries, Vietnam is hopeful of seeing an increase in exports.

Civil service reform and pay restructuring

Government jobs in Vietnam are considered to be secure despite the fact that they are low-income jobs compared to the private sector. With such a low-income scale, chances of corruption increase. The Ministry of Home Affairs has proposed aligning the salaries of civil servants with average private sector rates. However, whether the government will be able to implement the proposal is uncertain.

To Lam has called for “proactive resignation” in case government employees feel they cannot meet the new standards. Terming it as an “act of bravery”, he noted that it will give way to better-suited individuals.

Legislative push and public sentiment

The National Assembly will sit through May and June to pass key laws to enable the restructuring. The reform process has caused short-term delays in some administrative procedures. However, the country’s top leadership is determined to bring the changes, which reportedly has raised hopes among the citizens and businesses.

Conclusion

Vietnam is not only aiming to enhance operational efficiency but also to reposition the country on the global economic map. If the proposal is implemented successfully, it will help Vietnam achieve its goal of becoming a high-income, export-driven country by 2045.

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