Thematic discussions
What do you see as the vision for Vietnamese cities, 20 years from now?

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From February 2 to 14, Vietnamese and World Bank’s experts will host a discussion on urbanization and spatial transformation for Vietnam’s development toward 2035.

Vietnam is well on its way on the journey into urbanization and economic development. Urban areas are home to 33% of Vietnam’s population and contribute 51% of national GDP, and urban population is growing at just over 3% per year implying a doubling of urban population in less than 25 years.

Vietnam’s institutions for provision of services are also evolving to support such rapid pace of urbanization.

Vietnam’s transformation into a modern industrialized nation cannot take place in the absence of well-planned urbanization.

Vibrant Vietnamese cities will be essential for the emergence of knowledge-intensive production of goods and services. While Vietnam has done reasonably well in reaping the benefits of urbanization in the past couple of decades, evidence suggests that there is need to reassess and bolster the underlying institutional structures that govern factor markets (land, labor, and capita), public finance, urban regulations, and service delivery so that they are compatible with the needs of a modern market economy.

In the VN 2035, one of the key areas of analysis that team on urbanization and spatial transformation is looking at how can the existing institutions plan better for urbanization, what should be some of the key aspects that policy makers should reflect in laws/regulations and should the existing policy of spatially balanced development be pursued? What do you see as the vision for Vietnamese cities,20 years from now?

Our experts will be responding to your comments and opinions. They include Mr. Huynh The Du, Director of Public Policy Program, Fulbright Economics Teaching Program, Mr. Nguyen Do Anh Tuan, Institute of Policy and Strategy for Agriculture and Rural Development, Mr. Somik Lall, Lead Economist for Urban Development in the World Bank’s Social, Urban, and Resilience Global Practice, Mr. Gabriel Demombynes, World Bank Senior Economist and Ms. Madhu Raghunath, World Bank Senior Urban Specialist based in Hanoi, Vietnam.

Scott Muller


What a great forum! and insightful comments. One key aspect, on a short-mid term timeline, the role of cities and provinces in achieving the ambitious 2020 national targets in the Green Growth Action Plan 2014-2020. This will require rapid integration into local 5yr and annual SEDPs. Perhaps networking between cities, sharing approaches/tools/experiences could be helpful ? is this already happening? Here''s a case study producedJuly 2014, on the "Subnational Integration of the VGGS" http://en.openei.org/wiki/LEDSGP/planning/NationalSubnationalLEDS/documents

 


Trần Thị Hồng Nhiên - Address: 45 Đinh Tiên Hoàng, Bến Nghé, Q.1, TP.HCM


I think urban managers need to brainstorm and integrate their action plan. An urban citizen need to be educated on the dos and don’t’s in public places, such as no litering, no peeing, follow the lanes, and walk on the pavements. I hope that all projects need to supervise these simple things. Thank you.

 


Xứ Huế


Migration to big cities is increasing. Instead of moving to Hanoi and Ho Chi Minh cities, urban areas level 1 and 2 also attract new citizens. For 20 years planning, we need to form the style for young people, aiming at those who are now at primary or even kindergarten. Planning for the new lifestyle, new living space ideology, and financial resource for the cost of living in new urban areas. But Hanoi and Ho Chi Minh City has to deconcentrate.

 


Đào Cường


For the coming 20 years, we can do 5 rounds of projects, and 5 rounds of projects cannot solve the issues of Vietnam’s urban, with areas such as social infrastructure, technical infrastructure, environment and landscaping. To speed up and raise the quality of urban living environment, there need to be heightened supervision of quality of public investment (I mean to avoid waste of investment, not in construction). This is a major waste for the society that we need to consider.

 

Expert answers:

Ms. Madhu Raghunath replies:


Thank you. I fully agree with your suggestion that a project based approach is not the solution to urban planning. Urban planning needs to be embedded within a master planning process which needs to be strictly followed. What we observe in Vietnam is  the multiplicity of plans and weak enforcement of master plans, that keeps changing.
Let me tell you the example of the city Takoma Park in the state of Maryland in USA, where I am still the resident. The  city approved its master plan in 2000 which is still applicable today.

What is interesting to observe is that the plan is readily available on-line for anyone to view, citizens have a clear idea of development that will occur in the community and the spatial footprint of the city tends to remain the same. In Takoma Park, the master plan serves a vision document that states what kind of uses of land keeping in line with the characteristics of the community and natural attributes of the place. What we do not see are overlapping plans like transport plans, water and sanitation plans etc.. 
When a project is identified within the city, it goes through a rigorous process of consultation with the community on its proposed benefits and externalities. Such consultations result in a lot of discussion on the scope of the project including costs but also makes the intervention close to the community needs. In this way, the costs are actually close to the scope of the design and the communities play an active part in implementation. Thank you.

Trần Ngọc Lân


Migration from urban areas to city is the key factor of urbanization, and this pressure has to be recognized as a basis for labor mobility and economic restructure. For a certain period of time, we may need to accept the difference between urban and rural areas, and the pressure on urban infrastructure. Without such pressure, there will be 

 

Expert answers:

Mr. Gabriel Demombynes replies:


I largely agree with this perceptive comment. We know from experiences around the world that migration is an integral part of the development process. We should certainly expect that the locus of production and employment will shift from rural to urban areas. However, remittances from urban to rural areas will temper the growth in the urban-rural income gap. How should recognition of the importance of migration affect our policy thinking?

First, policy should seek to remove barriers to migration. Reforms of the ho khau system could reduce the extent to which it is a brake on migration. Second, investment in the human capital of children regardless of where they live now should be seen as a top priority, so that they are equipped for productive and prosperous lives wherever they may end up in their adult lives. A child born today will be in the workforce through at least 2075. Even if the child is born in an area where current out-migration rates are low (like the Northern Mountains), there is a substantial chance that at some point she will migrate to an urban area

Trần Ngọc Lân


Urbanization in Vietnam is considered as rapid, but I think it has not met demand if we compare it to other countries of similar status. Its support to economic and labor shift has not been maximized. We have been providing subsidies to the rural area for too long, our social safety net policies have let to drainage of resource, and have not created a strong pressure for economic and labor restructure. It is time to reduce subsidies for the agriculture and rural areas, social resources should be regulated under demand and supply and market mechanism. It is time to promote the shift from agriculture labor to industrial labor, from rural to urban area to increase the productivity of the economy (thanks to reduction of labor force in agriculture) and creating labor force for urban area and reducing the production cost.

 

Expert answers:

Mr. Nguyen Do Anh Tuan replies:


There are 3 assumptions that you’ve raised are not really persuadable so that proposals of fostering a massive migration from rural area to urban area, accepting the gap between rural and urban area and overloaded pressure on urban infrastructure in the transformation period are not convincing as well. Here are these assumptions:  

1. Vietnam is now protecting and supporting rural people too much so that they don’t have any motivations to migrate to urban: in fact, agriculture is the sector that receives least support in comparision with other economic sectors in Vietnam. Comparing to other countries, the protection of agriculture is also low. The government support to rural area has been mainly through poverty alleviation programs, development of some infrastructure and basic services. However, up to now, policies to support agriculture, rural areal only bring poverty reduction but not yet created any incentives to get rich from agriculture, rural area. 

Hence, farmers still expect to migrate to find job in urban. Today the major problem of Vietnam is: (i) industry-urban area do not create enough jobs to withdraw surplus labour out of agriculture and rural area; (ii) vocational training is still not appropriate so that people get difficulty in finding the job that meets their qualification/ expertise to get proper salary level; (iii) Migrations from rural area to urban mostly participate in informal sector, there is no labour contract, lacking of insurance and social security. Therefore, farmers are not ready to migrate their whole family and to cede land to other farmers. 

2. The productivity of labour in agriculture is low so that it is necessary to shift them to higher productivity area: There are 2 issues with this assumption: (i) productivity is a tool but not our last goal to get. The more important thing is people need to have higher income and living standard. Increasing productivity does not mean that income of workers can increase if most of value added are put into the pocket of employee or labour is exploited excessively; (ii) Currently, income from agriculture accounts for only about 30-40% working time in agriculture sector. If we calculate agriculture activity only by taking GDP in agriculture divided by the total labour in agriculure, we make labour productivity in agriculture lower than reality. Similarly, we also increase labour productivy in non-agriculture sector higher than reality because we don’t calculate the labours who migrate to urban in informal sector and the time that rural workers participate in non-agriculture in rural area. 

3. Migration from rural to urban is the main factor of urbanization, we need to accept this pressure to create a background for labour shift and economic structure. Even in a certain period, we have to accept the difference between urban and rural, overloaded pressure on urban infrastructure….: Country experiences show that we can’t get urbanization at all costs. Urbanization is only successful if it contributes to growth without causing congestions in urban, increasing inequality, utilizes the best comparative advantages of each region by urban scale with appropriate functions, creating spillover effects from urban. 
Therefore, instead of massive urbanization, Vietnam needs to consider spillover, balanced, harmonized development and strenth connection between urban and rural area, industry and agriculture to utilize the best comparative advantages of each region, industry by right function. The last goal is to increase income, to ensure employment and social security, to create opportunities to promote the capacity of each individual in choosing appropriate job. 


Đoàn Nghiệp


I support the construction of streets, and development or urban transport. However, as a citizen, I have never seen a long term plan (10 – 20 years), so there is always “surprise” when there is a new street built, a new construction upgraded, or green areas erased. Of course, these constructions are aimed to benefit the citizen and urban development. But citizens need to know these plan, so that they can arrange their own settlement plan, or investment in land and housing, as well as businesses. Please can you help explain this fact? Thank you.

 

Expert answers:

Mr. Huynh The Du replies:


There are indeed plans. They all have been announced publicly in accordance with regulations. There are three types of comprehensive plans for ten years or longer timespans including: socioeconomic comprehensive plans, spatial plans and sectorial plans (transportation for example). All master plans are approved by the prime minister and they must be announced publicly within 30 days. There is indeed mechanisms and regulation for public participation. However, the problem is that the formality of the process is obvious. It is really hard for ordinary citizens to know about plans. Another issue is that the feasibility of plans is low. Numerous infrastructures have been planned to be built, but only a portion of them actually built. For example, the total capital requirement for urban transportation projects until 2020 in the 2007 transportation plan of Ho Chi Minh City is USD43 billion (VND886 trillion). The actual investment for five years (2007-2012) was only USD2.1 billion (45 trillion dong) and accounts for 5.08 percent of the total required capital. The demand of capital in the adjusted transportation plan approved in 2013 is even higher (over 120 billion dollars) or three time higher than the 2007 plan. Or in the case of Quang Ngai, the planned investment capital for 2011-2015 was 159 trillion dong, but after for years (2011-2014), the actual investment is only a third of the planned one. In short, there are many problems with urban planning in Vietnam and a lot of things need to be done to improve it.

Võ Niệm Tường


My teacher, you should conduct a survey to know that how many urban areas have proper water treatment systems that meet standards. How many have such system in place and in operation? This is a minus point for urbanization in Vietnam and can be the problem in the coming 10-20 years if there is no good supervision. Currently, only industrial waste water treatment receive attention so almost 100% of all urban areas are causing water pollution. This is one small point for your to add to your discussion. I wish you activeness and further contributions to the country. Your student.

 

Expert answers:

Mr. Huynh The Du replies:


Thank you. We absolutely agree with issues you raised. The wastewater issue has been assessed in "Vietnam Urban Wastewater Review” by the World Bank and the Australian Aid. Only 4 percent of wastewater is treated while the rest is released directly to the natural system. Moreover, the estimated economic losses resulting from poor sanitation of USD 780 million per year or 1.3 percent of GDP.
 
Financing needs for wastewater treatment are very high. It is estimated that the demand to 2025 í about USD 8.3 billion. The demand to 2035 is obviously much higher. In short, wastewater treatment is a serious issue in Vietnam and it needs to be sort out. It is, of course, a focus in our 2035 report.

Nguyễn Hồng Hạnh


Vietnam’s urban expansion in the past 20 years has mostly been spatial expansion, with much bigger size due to upgrade of urban area, without the accompanying upgrade in quality of urban area. The role of urban area to economic development is indeniable, but many social and environmental issues have been arising together with the urbanization process. Urban planning and implementation of planning, as well as law enforcement are the challenges to the urbanization in the coming 20 years.

 

Expert answers:

Mr. Nguyen Do Anh Tuan replies:


In my opinion, there are a huge capacity gap of urban planning in Vietnam. We will need more qualified staff with better paid in urban planning. This will be an excellent job opportunities in the next 10 years. 

Ms. Madhu Raghunath replies:


I fully agreed. Enforcement of urban plans will be critical to reap the benefits of rapid urbanization. 

Đức Mạnh


The urban expansion often go together with population expansion (including immigrants), and immigration also create pressure on the urban spatial expansion. So the city become overloaded, and infrastructure is stretched. Beijing has been experiencing this process 20 years ahead of VN, but the situation has been worse. How can Vietnam avoid such trap.

 

Expert answers:

Mr. Nguyen Do Anh Tuan replies:


In my opinion, the critical questions is how to change incentives to avoid  the overloaded concentration and jams in the cities. There are 2 strategic options: 1) Deconcentrating industrialization and urbanization by utilizing comparative advantages of Vietnam in terms of agriculture, IT and tourism, and 2) Re-functioning urban development by utilizing comparative advantages of locations, which include:
i. Central  urban cities: administration, financial and banking services and trade. 
ii.Satellite urban area: advanced technologies, healthcare, education, manufacturing, defense, entertainment.
iii.Peri-urban areas: (i) high-quality and high-tech agriculture products, ornamental flower, ornamental fish (other goods should be taken from other locations); (ii) green spaces: forest,  water surface, pasture; (iii)environmental services: waste dumping; (iv) culture: entertainment, parks, temples, cemeteries; (v) residential areas; (vi) services.
iv.Rural townships attached to agricultural production zones: (i) clusters of agro industry and services; (i) rural social services; (iii) technical services for agricultural production and agribusiness; (iv) resorts for old people; ...

Ms. Madhu Raghunath replies:


It is important that Vietnamese cities start focusing on efficient land-use management and transit oriented planning which focuses more on creating cities that can accommodate people in lesser land which is what countries like Korea and Singapore have done to date. According to recent World Bank study on East Asia’s changing landscape,  cities like Seoul have an  urban population density is close to 10,500 people per square kilometer. Seoul has also ensured that public transportation becomes a key form of urban mobility which discourages urban sprawl and allows citizens to live and play close to their work.

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