Forty years ago, Doi Moi (renovation) changed the course of Vietnam’s development. A multi-sector economy and market-based principles became the foundation that helped the country emerge from crisis, open up to the world and sustain growth for nearly four decades.

Today, as Vietnam has entered the ranks of upper-middle-income countries, a new question arises: Why does the country need to rethink its development model once again?

The answer is that the model that lifted Vietnam from a poor economy into the upper-middle-income group is gradually approaching its limits. To reach the next level of development, Vietnam cannot simply move faster along the same path.

It was against this backdrop that Resolution 19 on renewing the national development model was introduced. Presenting the proposal on July 29, Politburo member, Party Central Committee Secretary and Chairman of the Central Commission for Policies and Strategies Nguyen Thanh Nghi stressed the need to transform how the country is organized, governed and operated in order to create new development capacity.

After nearly four decades, Vietnam has risen from one of the world’s poorest economies to the upper-middle-income group. Its GDP now ranks among the world’s 30 largest economies, while its merchandise trade places it among the top 15 countries globally. These achievements show that the Doi Moi model has fulfilled its historic mission.

According to the World Bank, Vietnam’s GDP per capita reached around $5,000 in 2025, slightly above the Philippines at $4,100 and close to Indonesia at $5,200. Yet a considerable gap remains. Thailand has reached around $7,500 per capita, while Malaysia stands at approximately $13,000, more than 2.5 times Vietnam’s level.

Compared with the global average of around $14,000 per capita, Vietnamese income is still only slightly more than one-third of that level, leaving a gap of roughly $9,000.

These figures show just how far Vietnam has come compared with its own past. Yet in relation to the region and the wider world, the country’s position remains relatively modest.

They are also a reminder that the journey toward becoming a prosperous nation is still a long one.

The closer a country moves toward the ranks of developed economies, the harder each additional step becomes. If growth speed was the decisive factor in the previous stage, the quality of the new development model will make the difference in the next.

That is also why Resolution 19 goes beyond renewing the growth model and raises a broader challenge: renewing the national development model itself.

The shift reflects an important recognition: the growth model built on low-cost labor, investment capital, natural-resource exploitation and foreign direct investment has fulfilled its historic role.

Rather than continuing to expand the economy primarily through capital, labor and natural resources, Resolution 19 places science, technology, innovation, digital transformation, data, talent and the private sector at the center of development. These are the resources that generate productivity, competitiveness and added value in a knowledge-based economy.

More importantly, Resolution 19 seeks not only to change the resources that drive development, but also the way those resources are organized.

Nguyen Thanh Nghi has repeatedly emphasized the need to transform how the country is organized, governed and operated. This lies at the heart of the new development model. As the economy becomes increasingly dependent on knowledge, technology and innovation, the quality of governance will determine how effectively resources can be translated into growth.

Resolution 19 therefore extends well beyond economic policy. It places significant emphasis on institution-building, better governance, human-resource development, science and technology, education, culture, the environment and people’s quality of life.

GDP growth remains a necessary condition, but the development objective has broadened to encompass the building of a modern, innovative, self-reliant, green, humane and sustainable nation, where people are both the goal and the driving force of development.

If Doi Moi in 1986 marked the turning point that moved Vietnam from a centrally planned economy toward a multi-sector commodity economy, Resolution 19 lays the foundation for the next stage: a transition from a development model driven primarily by capital, labor and natural resources to one built on knowledge, technology, innovation and modern governance.

The road ahead will undoubtedly be much more difficult. Building a strong scientific base, an innovation ecosystem, a highly skilled workforce and a modern system of governance will all require decades of sustained effort.

The greatest significance of Resolution 19 does not lie in setting another growth target. More importantly, it sends a message that Vietnam is entering a different stage of development, one in which national competitiveness will be determined by the quality of its institutions, its scientific and technological capabilities, its capacity for innovation and the effectiveness of its governance.

Tu Giang