Landmark Institutional Reforms Launched, Bolstering Vietnam’s Economic Growth 

The Plans 

In December 2024, Vietnamese leaders unveiled a comprehensive and bold plan to restructure and streamline the government’s organizational apparatus across all levels of the public sector. The plan is based on the Plan for the Restructuring and Streamlining of the Government’s Organizational Apparatus outlined in the CPV’s Resolution 18, released in 2017.

Several administrative reforms have been implemented since the adoption of Resolution 18, primarily at the provincial and commune levels. However, no changes have been observed at the central level in the past seven years. Surpassing all expectations, in less than six months since assuming the role of Party Chief, General Secretary To Lam has taken decisive actions to drive significant institutional reforms, executing them at a rapid pace and within a tight timeframe to complete all government restructuring by March 2025.

As announced by the top leaders, the reforms will involve dissolving and merging political and government agencies at both the central and local levels. This further consolidates local media agencies and downsizes the civil service workforce. By eliminating redundant structures, the organizational changes are designed to significantly cut administrative costs, streamline decision-making processes, and enhance the delivery of public services. The restructuring is expected to help reduce the burden on the state budget by cutting government expenditures to less than 50% of the budget, down from the current high rate of 70%.

However, the underlying motivation for this extraordinary reform reportedly stems from the leaders’ determination to redirect resources toward Vietnam’s economic development. The country has set specific targets for 2030, including achieving industrialization and modernization, raising its GDP per capita from the current USD 4,700 to approximately USD 7,500, and becoming one of the top three ASEAN countries regarding industrial competitiveness.

Key Structural Changes

Under the announced plans, all ministries and ministerial-level agencies will undergo internal organizational reforms or be restructured and merged. The restructuring goes beyond consolidating ministries, aiming to reduce the number of subordinate units within ministerial agencies by 15–20%. Extensive restructuring will also be implemented for the Party and the National Assembly operations. At the same time, agencies under the Vietnam Fatherland Front and socio-political organizations will also undergo mergers or be disbanded.

Notably, the CVP will introduce the following key changes in its operations:

• Streamlining Party operations by dissolving the Designated Representation model within the administrative system at all levels and replacing it with the new structure of the Party Committee at the central and local level.
• Merging the Commission for Publicity and Education Commission, responsible for managing the local media, and the Commission for Mass Mobilization, responsible for grassroots communication.
• Disbanding the Commission for External Relations. 

Timeline

First announced in early December 2024, the leaders set an extremely tight deadline for the restructuring, requiring the new structure to be in place within three months. Specific milestones include:

• December 2024:  All ministries and relevant government agencies submitted their restructuring plans to the Ministry of Home Affairs (MOHA) and the Government Office for review by the Central Steering Committee headed by Prime Minister Pham Minh Chinh.
• January 20, 2025:Restructuring Plan Summary Draft will be finalized following consultation with leaders, party organizations, experts, and academics.
• January 25, 2025: The Central Steering Committee will submit the final Report Draft to the Politburo for review.
• February 10, 2025: The National Assembly will hold an extraordinary ad-hoc session to approve the restructuring as well as to amend the Law on the Organization of the National Assembly, the Law on the Organization of the Government, and the Law on the Organization of Local Governments.
• Late February 2025:Develop systems that ensure appropriate disposal and recycling for used solar panels. Addressing the increasing volume of discarded solar panels expected after the 2030s, consider establishing a mandatory recycling system to ensure proper reuse, recycling, and disposal. 

The Plans 

• Vietnam remains a one-party state, with decisions driven by collective political consensus. However, due to reforms in the executive and legislative branches and within the Party’s operations, the dual “parallel leadership” system between the Party and the government will gradually phase out. A unified hierarchical structure will make policy implementation and personnel decisions more efficient.
• The restructuring, aimed at creating a more efficient public sector and the country’s digital transformation efforts, is expected to foster a more conducive environment for businesses and investors. In parallel, Vietnam will continue to enhance its legal framework and regulations to address bottlenecks in economic development and make the country more attractive for higher positions in the value chain.
• Personnel changes at both the central and provincial levels are likely to temporarily disrupt decision-making. Still, businesses and investors can expect a more streamlined process once the restructuring is complete, particularly with the elimination of middle-management layers.
• Invsetors are advised to remain patient. Red tape continues to be a significant challenge across all areas of the public sector, and this issue will not be resolved overnight. With less than a year until the 14th National Congress of the Party (early 2026), this round of downsizing is being implemented as a “filter” for the upcoming Party and National Assembly elections. Early retirements and the dismissal of redundant officials are already in progress.
• Businesses should proactively monitor regulatory agency restructuring and develop an engagement strategy with the new stakeholders identified as part of the process. Scenario planning is recommended to anticipate potential outcomes and prepare for any disruptions or new opportunities that may arise. While bureaucracy is expected to be reduced following the restructuring, effective stakeholder management can help businesses navigate potential challenges during the transition period and ensure smooth operations in the evolving regulatory environment.

Ministries to Be Maintained

Ministries to Be Merged

Ministries to be Founded

Materials presented by Edelman's public & government affairs experts. For additional information, reach out to Ha.Bui@Edelman.com  or Richard.Andrew@Edelman.com