August 19, 2025
BANGKOK – Vietnam has unveiled an ambitious national development plan to invest the equivalent of 10% of GDP — around 1.5 trillion baht — in infrastructure projects. The programme, comprising 250 infrastructure and housing developments nationwide worth 1.28 quadrillion dong (1.5 trillion baht), aims to achieve 8% GDP growth in 2025 and sustain double-digit growth in subsequent years. The ultimate target is to transform Vietnam into Asia’s next “tiger economy” and reach high-income status by 2045.
Vietnam’s economy has long relied on exports and foreign direct investment (FDI), leaving it vulnerable to external shocks such as the recently imposed retaliatory tariffs by US President Donald Trump. To reduce this risk, Hanoi is now stimulating domestic demand through massive infrastructure spending.
At the end of 2024, new Communist Party Secretary-General To Lam announced the start of a “new era of development”, signalling Vietnam’s most sweeping economic reform in decades. The government’s strategic vision is to emulate South Korea and Taiwan by lifting millions out of poverty and joining the ranks of Asia’s most advanced economies.
Vietnam’s rapid rise is underscored by its income growth: per capita annual income in Hanoi has jumped from US$1,200 in 1990 to US$16,385 today, fuelled by the country’s transformation into a global manufacturing hub.
However, challenges remain. Vietnam’s traditional low-cost, export-driven growth model is slowing, forcing a shift towards high-tech industries, green energy, and private sector expansion.
TDRI warns of negative implications for Thailand
Nonarit Bisonyabut, Senior Research Fellow at the Thailand Development Research Institute (TDRI), warned that Vietnam’s progress should concern Thailand. Thailand once had its own national strategy to achieve high-income status by 2036 under Prime Minister Gen Prayut Chan-o-cha, but this ambition has faded amid COVID-19 and other crises.
He explained that prior to COVID-19, Thailand’s potential growth rate was 3.6% annually. Post-pandemic, this has slowed to 2.7–3.0%, delaying high-income status until 2088–2093, around 7–12 years later than previously planned.
“Thailand had once tried to keep pace with rapidly developing countries such as China and Malaysia, which are on track to achieve high-income status by 2025 and 2030 respectively. Now, Thailand risks achieving the milestone only around the same time as Vietnam — in 2088–2093 — despite having set the target decades earlier,” Nonarit said.
He argued that Vietnam is implementing evidence-based reforms, such as bureaucratic restructuring to improve efficiency, enabling rapid economic advancement. In contrast, Thailand is slow to act despite being aware of its problems. Most of Thailand’s current projects focus on short-term populist measures or unsustainable ventures, such as cannabis liberalisation, casinos, and alcohol deregulation, as well as the Land Bridge project, which several studies have deemed unviable.
“Looking ahead, China and South Korea are prioritising Vietnam over Thailand. Both nations are winners in the digital age — with China rising alongside the US as an AI leader. If Thailand fails to reform seriously, it risks losing competitiveness and may eventually fall behind Vietnam,” Nonarit concluded.
FTI urges Thailand to act before being overtaken on all fronts
Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), told Krungthep Turakij that Vietnam is undergoing a major adjustment, taking advantage of changes in US tariffs and global trade rules. Vietnam is far more dependent on the US export market than Thailand, with over 30% of its exports going to the US compared to Thailand’s 18%. At the same time, Vietnam has had to contend with transshipment tariffs rising as high as 40%.
“Vietnam knows the world has changed, so it must rely more on itself and push through structural reforms,” Kriengkrai said. “They’ve started with bureaucratic reforms, cutting ministries and expenses to reduce redundancy. They know if they don’t restructure, they’ll lose out in global competition. This is a good example Thailand should follow.”
He warned that if Vietnam succeeds first, Thailand will inevitably be affected. “Vietnam already has stronger competitiveness, better skills, higher GDP growth and export figures. That’s why they’re moving urgently. If we only talk but don’t act, or move too slowly, Thailand will lose ground and find it harder to compete.”
Still, Kriengkrai stressed it is not too late for Thailand, provided it learns from Vietnam and acts decisively. “This crisis could be a turning point, an opportunity to reform ourselves, just as Vietnam has. Thailand still has strengths and advantages, but if we fail to act, we will keep falling behind. We must cut obstructive laws and all sectors must cooperate, with the government leading reforms for sustainable progress.”
Thai Chamber of Commerce calls for urgent infrastructure drive
Poj Aramwattananont, Chairman of the Thai Chamber of Commerce, noted Vietnam’s heavy investment in infrastructure as a strategy to sustain growth and counter Trump-era tariffs. “It’s a significant move. The Thai government must also act quickly on economic restructuring and infrastructure projects, like high-speed rail, which has been delayed and still lacks airport connections. Economic stimulus measures must also be accelerated.”
He acknowledged Vietnam’s effort to attract investment through infrastructure, but maintained Thailand still holds appeal, with strengths such as its location at the centre of CLMV, its role as a link between two oceans, robust manufacturing and exports with strong upstream, midstream and downstream industries, as well as its push into new sectors.
“But investors are hesitant because they don’t see clear government policies. The private sector is ready to cooperate with the government, but we need stability and confidence,” Poj said.
He cautioned that Thailand’s GDP has slowed after years of strong growth, much like China, which once grew at double digits but is now decelerating. “Vietnam is growing from exports and rolling out major infrastructure projects. We are too slow. We need faster execution, clear policies, and political stability.”
NESDC: Thailand’s infrastructure is more advanced than Vietnam’s
Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC), said Thailand already has a long-term infrastructure plan in place, covering transport, water management and energy, with investments steadily rolled out for decades.
“This makes Thailand better prepared compared to Vietnam, which is rushing to catch up now because many of its infrastructure systems were still problematic,” Danucha explained.
Thailand’s infrastructure remains a strength, though investors are increasingly demanding expansion in clean energy (RE100). Investors, especially in the Eastern Economic Corridor (EEC), are seeking more renewable energy options. “Thailand has sufficient overall power reserves, but the private sector’s demand for clean electricity is still growing.”
He stressed that Thailand’s infrastructure investment plans are already established, but must be implemented in line with budget availability, the public debt-to-GDP ratio, and remaining fiscal space.