Phuong Uyen Tran
In 2025, the World Bank quietly moved Vietnam into a new category: upper-middle-income economy, with gross national income per capita reaching $4,970, up from $3,590 just four years earlier. Crossing that line, as it turns out, is the easy part.
Economists have a name for what tends to happen next: the middle-income trap. Countries reach this threshold on the strength of cheap labour and inbound capital, then stall before institutions and productivity catch up to carry them further. Malaysia has sat below the World Bank’s high-income line of $14,375 for 22 years — a far more demanding phase of development than the one that got it here. Vietnam would need roughly 8 to 10 percent growth sustained for two decades to cross that line by 2045, inside a demographic window that begins closing around 2036. The number that got Vietnam here will not be the number that gets it further.
What is different this time is the pace of the institutional response. Since 2024, Vietnam’s leadership has issued a run of resolutions on science and innovation, on institutional reform, and on the private sector, reframing how the state relates to the businesses operating inside it. The results are becoming visible in the numbers. Registered FDI reached $34.65 billion in the first half of 2026, up 61 percent year-on-year, with disbursement at $13.03 billion, the highest first-half figure in five years. In May, the Vietnam Chamber of Commerce and Industry launched PCI 2.0 and a new Business Performance Index, replacing simple provincial rankings with a sharper measure of how policy actually translates into enterprise performance.
Tan Hiep Phat Group recognizes this pattern because we have lived inside it for three decades. We began as a small beverage plant in Bình Dương, built in the year Vietnam passed its first Private Enterprise Law. Today we operate four industrial clusters and twelve aseptic filling lines, exporting to France, the Netherlands, Australia, and Canada. None of that scale existed until the institutions around us opened enough room for it to. It is also why, when USAID’s funding for the Provincial Competitiveness Index ended in 2025, THP chose to become the index’s sponsor rather than simply one of its beneficiaries. The businesses that gain the most from a fair operating environment carry the deepest obligation to keep building it.
Institutions can open a door. They cannot walk anyone through it. Vietnam’s new resolve — its willingness to rewrite the rules governing capital, land, and enterprise inside two years rather than two decades — is a genuine opening for the private sector, not a guarantee for it. The businesses that treat this moment as an invitation, to invest, to train, to build past the next reporting cycle, are the ones still standing when the next threshold arrives. That is the work in front of all of us now.
“Institutions can open a door. They cannot walk anyone through it.”
— Phuong Uyen Tran
