VietNamNet would like to introduce an analysis about Vietnam’s urbanization by Victoria Kwakwa, Country Director of the World Bank in Vietnam.



Hanoi has a unique charm. The historic old quarter, quaint French architecture. Lovely lakes and historic pagodas are major attractions. Hanoi is also still very livable with residents from young to old still able to enjoy parks as hang outs, for quiet walks, for aerobics, tai chi and other exercises.  

Several residents are able to bike to work or to school. But Hanoi like other cities in Asia is changing and urbanizing rapidly, evidenced for example in the rapid development of the My Dinh area, and the numerous sky scrapers that are transforming the skyline. This rapid change comes with challenges; managing noise, heavy traffic, air and water pollution.

I live in a quiet neighborhood and still enjoy the pleasure of being woken up by the chirping of birds but such neighborhoods are increasingly rare: the city is much noisier, and no matter where you live, it’s impossible to avoid noise from construction at some point, starting early in the morning.

In the three years I’ve had the pleasure of living in Hanoi I’ve seen a rapid growth in the number of motor bikes and cars on the street and my commute to and from work at rush hour, though still short by Asian standards, now takes about thirty minutes, almost twice as long as it did when I arrived. Air quality is declining and is now ranked among the world’s worst.   

These challenges are not unique to Hanoi, but they can be managed and with the right policies and actions allowing Hanoi to retain its unique charm and livability while enjoying the benefits that urbanization brings.    

According to the Vietnam Urbanization Review which the World Bank is releasing today, Vietnam is urbanizing at a rate of 3.4% per year. Most of that growth is in and around Ho Chi Minh City and Hanoi. This is a good thing.

Urbanization, especially in the two large economic centers, has had and will continue to have a central role to play in Vietnam’s economic growth and poverty reduction story.  No country has achieved high income status and strong economic growth without first urbanizing and nearly all countries become at least 50% urbanized before fully reaching middle income status.  

Vietnam expects to reach that point by 2025. Can Vietnam harness the economic and social opportunities of urbanization and successfully mitigate the challenges it poses? So far Vietnam has been successful as growth in GDP and remarkable reductions in poverty have occurred in tandem with increasing urbanization. But policy makers must do much more to ensure these gains continue and urbanization provides benefits to all segments of society.
 

While Vietnam has done a relatively good job in providing basic services and the lack of large scale slums suggests most people have access to housing, there are definitely signs that this is changing.  

Land prices in Ho Chi Minh City and especially in Hanoi are increasing beyond the reach of the average resident.  Our analysis suggests that the typical housing provided today by formal land developers is affordable to only the top 5% of the income distribution in these cities.  

Vietnam’s two tiered land pricing system and lack of transparency in land markets needs to be addressed as does the extensive use of land sales and leases to finance local budgets – a practice which induces urban sprawl.

A healthy debate on the Land Law, as is planned for this session of the National Assembly, could provide a good opportunity to address many of the inequities and inefficiencies in Vietnam’s urban land markets and practices.
 
Planners must also address the on-coming problem of urban mobility to improve the livability of cities and provide transport options for all citizens, including the urban poor, children, the elderly and disabled.  

The extensive use of the motorbike has led to a dispersion of jobs and housing and urban sprawl.  But while the motorbike has actually helped keep commuting times low even in Vietnam’s largest cities by international comparisons, the transition to automobiles without significantly more investment in roads and public transport systems will lead to gridlock.  

Under current conditions, if automobile ownership in Hanoi reaches the level of Malaysia – a middle income country- there will be complete gridlock in the city.  There is simply not sufficient road space for that many cars.  

Addressing these problems also means modernizing and reforming Vietnam’s planning systems, strengthening urban management and ensuring better coordination between levels of government and between city departments.  Vietnam’s planning institutions – a legacy of central planning - are simply not capable of planning within Vietnam’s emerging market framework.   

The recently approved Urban Master Plan for Hanoi is an example of why the planning system needs to change.  The Master Plan proposes a system of satellite cities consuming large amounts of land and reducing urban densities which will cost tens of billions of dollars to develop.

It risks locking-in public investments where there is no demand.  By comparison, the proposed Hanoi Master Plan would consume nearly twice as much land for a projected population of 6.5 million by 2030 compared to Seoul, South Korea which has a population of 10.5 million. In today’s world where climate change is a concern for everyone, Vietnam should be focusing on developing high density, compact cities that are energy efficient and provide suitable housing and employment opportunities for everyone.

“Vietnam will have one chance to get urbanization right.  If we fail at urbanization, we will fail at industrialization and modernization,” then Deputy Prime Minister Nguyen Sinh Hung said at the Vietnam National Urban Conference in November 2009.   

These are profound words and demonstrate that Vietnam’s policy makers understand the importance that urbanization will play in moving Vietnam from to middle income and beyond.  

Getting urbanization right will mean greater economic and social opportunities for an increasing number of Vietnamese.  Getting it wrong would be a lost opportunity.

Victoria Kwakwa
 
(The Vietnamese version of this op-ed was posted on VietNamNet and another English version was published on Vietnam News.)