B. Expectations
3. Implementation System and Direction
The Ministry of Strategy and Finance is the competent authority of this KSP project, and the Export-Import Bank of Korea is in charge of the overall project management to ensure effective project execution. Korea Research Institute for Human Settlements (KRIHS), mainly its National Territorial Planning and Regional Research Headquarters with its experience in establishing comprehensive national territorial plans, is collaborating with Global Development Partnership Center (GDPC) who has rich experience in KSP projects, as well as internal and external experts. Also, KRIHS has a project execution system that guarantees successful, quality outcome by forming a close cooperative relationship with the research institutes in Vietnam and relevant departments.
Since its establishment in 1978, the KRIHS has continued to play a key role in establishing comprehensive national territorial plans. In addition to urban planning, the institute
establishes a comprehensive plan that comprises an array of areas from land, to housing, environment, and construction. Based on the achievements of the comprehensive national territorial plan, KRIHS plays a major role in promoting Korea's comprehensive national territorial plan to the outside world along with its GDPC. In addition to the comprehensive national territorial plan, the Korea Research Institute for Human Settlements has contributed significantly to drafting important national policies such as building new towns (new town construction project), 2 Million Housing Unit Construction Project, Happy Cities, and Innovative Cities.
Figure 2 Project Execution System
B. Project Promotion Direction
KRIHS provides policy recommendations for Vietnam based on its experience in national land-related spatial planning, such as comprehensive national territorial plans and plans for each sector. To this end, KRIHS assesses Vietnam's spatial development issues through basic research such as studies the current state and problems of Vietnam's national land and comprehensive analysis on major land development-related plans. In addition, the institute provides guidelines and tools for effective spatial development planning and shares its experiences in resolving conflicts that may arise during the planning process. KRIHS also suggests ways to improve Vietnam's national land development system to establish
the country's Comprehensive National Master Plan (CNMP), suiting Vietnam's situations while sharing Korea's experience in establishing the national territorial plans (1st to 5th) and the contents of its well-organized development experience. Lastly, due to the prolonged COVID-19 situation, the training program for policy practitioners will be conducted online.
Yet, the program will proceed based on close cooperation with the Vietnamese central and local governments and the policy practitioners of related institutions.
Ⅱ Current Status of Vietnam and Sectoral Issues
The country has a land narrowly stretched from north to south, bordering China to the north and Laos and Cambodia to the west. The country's major cities are the capital city of Hanoi in the north, Ho Chi Minh in the south, and Da Nang in the center; It has a population of over 96 million, which is expected to continue to grow in the future with a pyramid-shaped population structure. The country has a high proportion of tourism-oriented service industries, followed by manufacturing and agriculture.
Table 1 Vietnam Overview Classification
Capital Hanoi (population 8.05 million, as of 2019) Territory size 330,341㎢ (1.5 times the Korean Peninsula)
Climate Subtropical in the North, Tropical monsoon in the South, and the average annual temperature is 24.1℃.
Population 96.48 million (2019, Statistics Vietnam) Race Viet (86%) and 53 minorities
Administrative
division 5 municipalities and 58 provinces
Major cities Hanoi, Ho Chi Minh City, Hai Phong, Da
structure Services (41%)> Manufacturing (33%)>
Agriculture (16%) (2016) Major imports
and exports
(Export) Clothing, footwear, electronic and electrical products, seafood, rice, coffee, etc.
(Import) Machinery and equipment, petroleum products, steel, raw materials, automobiles, etc.
2) Current Status of Economic and Social Development
At the 6th National Congress in 1986, the Communist Party of Vietnam adopted the policy of Doi Moi, who advocated economic liberalization, and converted to a market economy.
Due to its land structure stretching from south to north and historical background, the regional gap — between northern, central, and southern Vietnam — remains large, and thus regional integration emerged as an important national policy task. A perfect pyramid shape in the demographic structure with a growing younger population suggests that the country has the human capital to fuel its economic growth over the next 30 years.
Figure 3 Vietnam’s Economic Growth Trend after the Doi Moi Policy
Vietnam has established and is operating growth poles throughout the country as special economic zones to promote economic development. Vietnam established socio-economic zones in the Red River Delta region, the northern inland and mountainous regions, the central north and central coastal regions, the central highlands region, the southeastern region, and the Mekong River Delta region. The country has also set the northern KER, the central KER, the southern KER, and the Mekong Delta River KER as Key Economy Regions (KER). The country's national infrastructure includes 312,464km of roads, 3,146km of railroads, and 22 airports (10 International Airport Corporations), but further infrastructure expansion is needed.
Figure 4 Vietnam’s Regional Division and Economic Regions
3) 2019 Major Issues and Future Prospects
Of the main issues, the first is interest in sustainable and inclusive economic growth.
The gap between rich and poor is primarily due to urban development, and in particular, ethnic minorities in mountainous areas account for 72% of the total poor population. In rural areas, 'New Rural Development,' modeled after Korea’s Saemaul Undong, was introduced and is being promoted as a national project for balanced urban-rural development and improvement of residents' quality of life. Thus, the social policy agenda is shifting its focus from reducing absolute poverty to improving the quality of life and co-prosperity.
Second, strengthening and reforming government capacity and securing new growth engines. Vietnam focuses on achieving qualitative growth by establishing a socialist market economy, enhancing corporate governance, and responding to the 4th industrial revolution.
Third, sustainable land development through the expansion of infrastructure. The country is prioritizing the establishment of infrastructure, especially transportation network infrastructure, while making efforts to solve transportation and environmental problems through smart city and continuous and inclusive land development.
Fourth, fostering high-quality human resources for capacity building to become an advanced country. The country needs to actively promote university competency reinforcement, science and technology development centered on agriculture, tourism and IT, and nurturing of start-ups, which are the three main areas of focus in the face of the 4th industrial revolution.
4) Vietnam's Spatial Planning System
Vietnam's land development policy is mainly promoted through the system of space planning and social and economic development planning, but there is no national comprehensive planning system that spatially integrates them.
Figure 5 Vietnam Spatial Planning System
The Ministry of Planning and Investment establishes "socio-economic development plans"
for the country and its regions, and the Ministry of Construction establishes '"spatial plans"
such as regional plans, master plans, and other detailed plans.
Table 2 National Plan Outlines of Vietnam
2. Major Sectoral Issues Regarding National Territory in Vietnam A. National territorial and Urban System
1) Summary
Vietnam has a national spatial policy comprised of two major programs: social development plan, and spatial plan. The administrative structure of Vietnam consists of three regions — North, Central, and South — and six socio-economic sub-regions.
The master plan, which presents the territorial spatial strategy, classifies key economic regions and metropolitan areas as a high priority since 2015 and assigns comprehensive economic districts to play the role of a dominant growth pole at the national level. The primary direction for urban development in Vietnam is presented in the Vietnam Urban Development Master Plan (~ 2025) and the Vision to 2050 (Decision No. 445/QD-TG dated April 7, 2009). The Vision (Decision No. 445) presented the role of state management to organize national land space and urban networks in Vietnam's 10-year industrialization
and modernization process. Cities have become powerful pillars of national development, their economic growth rate is twice the national average, and cities account for more than half of the country's gross domestic product (GDP).
In terms of timing, the primary urbanization zones will be prioritized for development from 2015 to 2025 to reduce scattered, regional development, and the general urban network will be implemented from 2026 to 2050.
Figure 6 Vietnam Administrative Structure and Master Plan
< Country map divided by regions > < Master plan orientation for Vietnam urban system development >
2) Urban network system
As of April 2019, the number of cities nationwide is 830 (Table 3).
The country has reached 83% of its 2025 target for the number of cities (the number of cities expected reach 1,000 by 2025); It has 19 I-class cities (the number expected to be 17 by 2025), 29 II-class cities (expected to be 20 by 2025), and 83% of the target number for III-class cities. There are 45 urban areas (81 by 2025), 80 IV-class city downtowns (79 by 2025), and 655 V-class city downtowns (803 by 2025).
Table 3 City Networks in Vietnam as of April 2019
Grade Actual Target set by the Government - 2025
Special 2
I 19 17
II 29 20
III 45 81
IV 80 122
V 655 760
Total 830 1000
Data Source: Vietnam Ministry of Planning and Investment (2020)
3) Characteristics of Urbanization in Vietnam
The first characteristic of Vietnam’s urbanization is its rapid and robust nature. During 2011-2020, Vietnam has continued to promote strong and effective economic development and urbanization.
By the end of 2018, the national urbanization rate had reached 38.4%, basically meeting the target under the resolution of the 12th National Party Congress (38-40% by 2020). The annual urban population growth rate is over 3%. Urbanization is most concentrated in the Southeast/Ho Chi Minh City area (64.15%) and least potent in the north-central and mountainous areas (21.72%).
Second, the problem of territorial imbalance due to urbanization in Hanoi and Ho Chi Minh City is being pronounced. After the reform in 1986, the urbanization process centered on the two urban poles of North (Hanoi) and South (Ho Chi Minh) resulted in unbalanced territorial development. Growth rates of the two cities and neighboring cities were much higher than the overall national urban growth rate, resulting in gaps in access to basic services and adequate infrastructure, as well as hightened climate-related risks.
Figure 7 Vietnam‘s Urban Structure
4) Issues
a) Deterioration in the quality of life of urban residents due to a lack of urban infrastructure and rapid urban concentration
It is predicted that Vietnam's six largest cities will grow significantly by 2030, and the population of Ho Chi Minh will increase by nearly 4 million over the next ten years, reaching 11.1 million. The population of Hanoi, the capital and second-largest city, is projected to increase by 2.7 million to 6.4 million. As a result, solutions are needed to improve the quality of life of city dwellers by addressing the problems of a lack of housing and living infrastructure, traffic congestion, and environmental degradation.
First, there is an issue of poor technological foundation. Urban development is progressing rapidly, but the country is still lacking in a strong technological base. The connection between city downtowns and suburbs are weak, urban underground space is still underdeveloped. In general, urban infrastructure is outdated, undermining urban residents and economic activities, transportation in particular, waste collection and treatment, drainage, and wastewater treatment.
Second, insufficient financial resource and underperformance is another issue. Local governments are unable to invest the necessary amount of financial resources in maintaining the urban infrastructure, and investment in infrastructure building to respond to climate change has only seen minimal results.
Third, inadequate urban transportation system. While cargo and passenger traffic is heavily reliant on road transport, the proportion of land designated for roads and transportation facilities is low at around 10-20%, which is only 16-20% of what has been
legally mandated under the Road Traffic Act. Naturally, the connection between cities and regional areas is limited.
Fourth, with regard to urban traffic, there are no bicycle lanes in high-density downtown areas and insufficient pedestrian sidewalks. Most downtown areas do not have their network of urban arterial roads completed; Many important intersections and transportation hubs have yet to be built. In large cities, public transportation systems are not yet effectively operating. Public transportation is not yet meeting the demand, and the proportion of public transportation is relatively low (around 12% in Hanoi, 5% in Ho Chi Minh City, 3%
in Da Nang and Haiphong), well below the 2020 target of 25-35%. The city railway system is also on track to be completed and start operating later than originally planned.
Fifth, while there has been a progress, unstable water supply is still a problem. Water shortages mainly stem from the depletion of surface water and groundwater resources.
Although the water loss rate has decreased, ineffcient water management aggravates water scarcity. The quality of the water supplied to homes is not guaranteed.
Sixth, water drainage (stromwater management) is gradually improving, there is an issue of insufficient investment. The density of drainage systems in urban areas is still low with many disconnected sections, and the stormwater and waste water drainage systems are not properly separated in many places. Major flood prevention projects are currently concentrated in major cities such as Hanoi, Ho Chi Minh City, and Can Tho City. So far, 43% of drainage facilities, 12% of canals, and 10% of water storage tanks have been installed.
Seventh, wastewater treatment is inadequate, the target has not been met, and investment resources are insufficient. Vietnam's urban wastewater drainage and treatment is a type of the infrastructure that is not meeting the target and a solution is needed to draw large-scale investment. The service coverage of the urban drainage system is about 60%, which is lower than the 70% target. Most untreated wastewater is still discharged directly into the surface water drainage system, causing environmental pollution.
Eighth, insufficient urban green space. The green area ratio per capita in Vietnamese cities is 2-3 square meters, which is lower than the UN's minimum green space per capita of 10 square meters.
b) Mismatch in the spatial patterns of industrialization and urbanization
Vietnam has spatial problems1) that typically arise from rapid urbanization: Urbanization and industrialization not spatially aligned with each other; and insufficient urban infrastructure that does not ensure the mobility and housing of rapidly increasing urban population, causing problems such as a lack of connectivity between industries, labor mobility constraints, and disorderly urban expansion.
1) “The demographic/spatial/physical growth trend of cities reflects the slowing growth of the workforce, limited labor mobility, and dispersed industrialization. […] (World Bank, 2020:73)
Table 4 Spatial Patterns of Rapid Urbanization transportation infrastructure (World Bank, 2020:46) Spatial Patterns of population growth and the accelerating urban physical expansion (including the conversion of agricultural land to non-agricultural land) (World Bank, 2020:70-71).
c) Low level of urban development and widening disparity between urban and rural areas
Although Vietnam's urban system is rapidly developing quantitatively, cities are not sufficiently playing their role as a growth pole. Nearly 90% of the more than 830 cities are small towns (Class V and IV) with a population of about 7,000. This means that most Vietnamese cities are properly serving their role as a growth engine for the province/region.
On the other hand, there is a disproportionate distribution of the population by city class (Figure 3). The majority of city dwellers live in Hanoi and Ho Chi Minh (the only two cities classified as special cities) and Class I cities, while most cities belong in Class V (small size).
Figure 8 Urban Population Distribution and Number of Cities by City Type (2019)
data source: Ho Chi Minh City Department for Construction (2020); calculated from Table 1
Such an imbalance is also demonstrated by the contribution of cities to the national economy. Currently, Vietnam's four key economic regions include 24 provinces, accounting for about 27% of the population and 89% of the total national GDP. VND accounts for 45.42% of the country's GDP and 50.9% of the GRDP of the four economic regions.
d) Inhibition of the agglomeration economy due to low density, congestion, and fragmented urban development
Between 2000 and 2015, Vietnam’s urban population increased by 10.2 million, and the size of urban land increased by 652,144 hectares. However, urban density remained almost unchanged at an average of 18.7 people per hectare.
Table 5 Urbanization of Population and Land, 1995-2015
Year Total no. of
The urban land of Ho Chi Minh City, the economic center of Vietnam, is rapidly growing in size at an annual rate of about 4%. The population density in the downtown is 44,000 people/㎢, but it decreases to 26,000 people/㎢ an hour away from the downtown by car from and to 15,000 people/㎢ two hours away from the suburbs. However, the population density of downtown Singapore, a world-class city, is 1 million people/km², downtown Hong Kong 6 million people/km², and Manhattan 3.7 million people/km². This is because most of urban development in Hanoi and Ho Chi Minh City takes place on the outskirts of town surrounding the downtown.
Low and stagnant urban density undermines the benefits an agglomerated urban economy can offer. Increasing urban density is associated with benefits such as knowledge spillovers, reduced economic costs by sharing infrastructure and workforce pools, and improved productivity. However, these dynamics are difficult to apply to Vietnamese cities. Figure 9 shows the fragmented urban expansion of Ho Chi Minh City.
Decentralized and fragmented urban development demonstrated in the Figure places great pressure on infrastructure and potentially undermines the efficiency of public transport systems in Hanoi and Ho Chi Minh City.
Figure 9 Comparison of Urban Density between Ho Chi Minh City and Hanoi City
data source: Salat (2013), from The World Bank & MPI (2016)
Figure 10 Fragmented Urban Expansion in Ho Chi Minh City
data source: The World Bank & MPI (2016)
e) Industrial concentration in specific regions
Vietnam's spatial urban development is concentrated in only two growth centers: Hanoi and Ho Chi Minh City, or, more broadly, the Red River Delta and the southeast (partially including areas around the Mekong Delta). Over the past decade, population growth rates were highest in Hanoi and Ho Chi Minh City, with a significant population decline in the southern part of the Red River Delta and most of the Mekong Delta area. The two major economic regions around Hanoi and Ho Chi Minh City have the highest industrial output per unit, accounting for 84% of the national total in 2013 (Figure 10), and are seeing siginificant progress2) in attracting investment and industrial productivity. Between 2005 and 2013, the ratio of industrial output to national output in the two core cities decreased, while that of the neighboring regions increased significantly. This is a common pattern found in the process of industrial development as a spatial shift occurs from high-cost to low-cost regions. Even so, small-to medium-sized towns far from the two cities have limited chances of attracting investment, especially FDI. Although the planned industrial districts and urban areas are vast in size, many towns rarely receive external investment.
2) In the north, Foxconn's satellite phone, router and modem assembly plant and a large Samsung mobile phone assembly plant are located. In addition, close to 100 Vietnamese partners have invested in Samsung manufacturing complexes in Bac Ninh (northeast of Hanoi) and Thai Nguyen (north of Hanoi) provinces. In the south, Dong Nai Province (North Ho Chi Minh City) issued 1,479 investment certificates worth a total of USD 27.03 billion. In Binh Duong, northeast of Ho Chi Minh City, domestic companies invested USD 550 million, while foreign companies invested more than USD 20 billion.
Figure 11 Industrial Production Value Per Square KM
data source: Vietnam General Statistics Office, The World Bank and MPI (2016)
f) Problem in Vietnam’s urban classification system
f) Problem in Vietnam’s urban classification system