Public-Private Partnership in developing countries: a case study of Vietnam

Abstract

Vietnam has effectively moved from a closed, centrally planned economic model to a dynamic, market-oriented, integrated economy worldwide. However, to fulfill its infrastructure objectives by 2040, Vietnam will need to mobilize more capital because state debt is approaching the threshold set by the National Assembly. Furthermore, borrowing funds from international development banks is restricted. As a result, the Vietnamese Government will need to attract novel investment. Private sector investment through Public-Private Partnerships (PPP) has been a global trend during the last decade. It is a strategy for investing in and sustaining economic infrastructures, such as transportation, public utilities, social infrastructure, and other specialized services. Because of the disparity between Vietnam's investment demands and financial capabilities, the Government has prioritized mobilizing private resources for public development goals, including public-private partnerships (PPPs). However, until 2014, Vietnam's PPP sector was still considered a developing market. This article analyzes the successes and challenges of PPP implementation in Vietnam, including literature review, legal framework, achievements and prospects, implementation challenges, and some solutions to promote PPP implementation in Vietnam based on domestic analysis and international experience.