Many in Vietnam have begun to sense a clear shift in recent years: the country is entering a new phase of transformation-where development pressures are intensifying, public expectations are rising, and the limitations of the old system are becoming more visible.

After the pandemic, the economy had to recover amid a turbulent global context. Businesses are adapting to rising capital costs, volatile markets, complex legal frameworks, and increasing risks. Meanwhile, the state apparatus is under pressure to stimulate growth, ensure macroeconomic stability, accelerate public investment, resolve bottlenecks in projects, and uphold administrative discipline.

Over time, it has become evident that economic slowdowns aren’t always caused by a lack of capital, projects, or political will.

Often, it is the operating system itself that holds back progress-outdated institutional frameworks, overlapping legal regulations, cumbersome procedures, and a pervasive culture of risk aversion.

Institutional reform: The 'breakthrough of breakthroughs'

At this point, several leaders have candidly acknowledged that institutional obstacles have become the “bottleneck of all bottlenecks,” and that reforming institutions is the “breakthrough of breakthroughs.”

Recognizing this, General Secretary To Lam has outlined a very clear approach to institutional reform. He has not merely called for legal revisions, but emphasized the need to rethink how laws are made-and how the state governs.

His directives-such as “abandon the mindset of banning what cannot be controlled” or “shift from prior control to post-audit, and manage by results”-are more than suggestions. They signal a decisive break from the old way of governing.

By declaring that laws should not only regulate but also encourage innovation and expand space for development, Mr. To Lam is redefining the role of the state-placing citizens and businesses at the center of policy, and shifting from control to facilitation.

This approach establishes a series of new principles: businesses are allowed to do anything not prohibited by law; state agencies can only do what the law explicitly allows; and the bureaucracy must be accountable for end results, not just procedural compliance.

These principles directly affect how the government operates, how officials think, and how entrepreneurs, investors, and innovators engage with the economy.

Reforming the business environment

This reform mindset is deeply connected to a crucial policy shift: not criminalizing economic, civil, or commercial relationships-embodied in Resolution 68.

The goal here is not to tolerate violations, but to draw a clear line between legitimate business risks and exploitative, fraudulent, or corrupt practices.

When this boundary is well-defined, regulators gain confidence to act, and businesses gain trust to invest, innovate, and take healthy risks.

In this way, institutional reform moves beyond legal texts and enters the real-world decision-making spaces where growth truly happens.

Yet, the principles of Resolution 68 have not fully taken root in daily governance.

One area of concern is the overlapping legal framework for investment, land, construction, planning, and public-private partnerships (PPP).

For years, contradictions among these laws have created procedural spirals that are hard to escape: a single project may require multiple layers of approval, feedback from various agencies, and even small regulatory inconsistencies can pose legal risks.

When amendments merely patch over gaps instead of resolving core conflicts, they often generate new bottlenecks.

This is why the reform mindset of “not trying to fix a broken structure but being ready to dismantle and rebuild it if necessary” represents a profound shift-away from excessive regulation and toward simplification and market-driven frameworks.

Another reform area concerns business licensing conditions.

When too many requirements are imposed arbitrarily, vaguely, or without a clear link to risk management, they become market entry barriers.

The most affected are small and medium enterprises-those with limited resources but significant presence in the economy.

Reviewing and eliminating unreasonable conditions, while standardizing essential regulations to be clear and easy to comply with, will not only reduce compliance costs but also foster a fairer competitive environment.

Decentralization and local empowerment

Alongside legal reform, decentralization has been elevated, guided by the principle of “local decisions, local actions, local accountability.” Arguably, this principle should be expanded to include “local knowledge” for full and effective decentralization.

This is not just about lightening the load for central authorities, but about empowering localities to explore development models tailored to their own contexts.

When decentralization is accompanied by transparency and accountability, local governments are not only granted more power but also must bear the outcomes-both successes and failures-of their policy choices.

Within this policy architecture, four major resolutions from the Politburo-on science and innovation, deep international integration, private sector development, and legal reform-are not isolated but interconnected, forming a comprehensive development framework.

Institutions should not merely follow to regulate, but must lead to pave the way for new growth.

Record legislative productivity

Some may see this as theoretical. But data from the 15th National Assembly illustrates the scale of action: during the 10th session alone, the legislature passed 51 laws and 39 resolutions, including 8 legal resolutions-nearly 30% of all such documents passed during the entire term.

From 2021 to 2025, the National Assembly enacted 150 laws and 49 legal resolutions, and convened 19 sessions-more than any previous term.

This increased legislative frequency was not just about handling volume, but about enhancing responsiveness to socio-economic issues.

These numbers show that institutional reform is no longer just a stated goal-it is now a deliberate strategic choice.

Challenges lie ahead. Stronger decentralization requires higher implementation capacity and stricter discipline. Post-audit systems need transparent data and effective oversight. Market principles demand policies that ensure social equity, protect the vulnerable, and reallocate wasted resources. But the risks of reform are smaller than the risks of inertia.

Perhaps the clearest outcome of 2024–2025 is not the number of laws passed, but the shift in mindset-from incremental improvement to institutional redesign as a driver of development.

General Secretary To Lam’s consistent directives on enabling statecraft, business freedom, responsibility-based decentralization, market principles, and decriminalizing economic behavior have laid the foundation for a bold, practical reform vision.

On that foundation, “institutional breakthrough” is not only a hallmark of the current term, but a vital launchpad for Vietnam’s long-term development trajectory.

Tu Giang & Lan Anh