Vietnam's Ambition to become 'Tiger Economy' Compared to Pakistan

Vietnam's national flag.

Vietnam is embarking on its most ambitious economic transformation in decades with the bold goal of becoming Asia’s next “tiger economy” by 2045—a milestone that would mark its rise as a prosperous, dynamic force akin to South Korea or Taiwan during their rapid growth phases.

This economic overhaul was symbolically announced late last year by Communist Party chief To Lam at Hanoi’s central party school, heralding “a new era of development.” Vietnam’s rapid ascent has already been remarkable: from an average annual income barely $1,200 in 1990, adjusted for local prices, to over $16,000 today.

Vietnam’s economy has performed significantly better than Pakistan’s in recent years, especially when comparing key indicators like GDP growth, GDP per capita, trade balances, and overall economic resilience.

Its transformation into a global manufacturing hub has lifted millions from poverty, driven by a booming middle class, export-led growth, and modern infrastructure developments like highways and high-rises, closely mirroring China’s rise.

Yet, the challenges ahead are steep. Vietnam must navigate an aging population, intensified climate risks, and institutional hurdles while moving past its reliance on low-cost labor and export surpluses. The latter has drawn pressure from the U.S., which imposed tariffs amid concerns over Vietnam’s $123.5 billion trade surplus in 2024. Negotiations settled on a 20% levy on Vietnamese imports, reflecting tensions in global trade dynamics.

To sustain long-term growth and avoid the “middle-income trap,” Vietnam aims to diversify beyond its traditional manufacturing base. Emulating successful “tiger economies,” it is making “multiple big bets” on high-tech sectors like semiconductors, artificial intelligence, and renewable energy. The government is investing heavily in infrastructure projects, including a $67 billion high-speed railway connecting Hanoi to Ho Chi Minh City and new civilian nuclear plants.

A pivotal part of the reform is institutional restructuring—merging ministries, reducing bureaucracies, and consolidating provinces to build stronger regional talent hubs. The government also plans to establish two special financial centers with simplified regulations and incentives to attract foreign investment and foster financial technology innovation.

A major shift is underway in the role of private enterprise. Under Resolution 68, the Communist Party declared private businesses as “the most important force” in the economy, signaling a break from the historical dominance of state-owned and foreign firms. The strategy aims to foster “national champions” driven by market forces to innovate and compete globally, supported by easier access to loans, government contracts, and overseas expansion.

However, the push for reform faces internal resistance from conservative elements and interests vested in state-owned firms. Moreover, climate change poses an urgent and growing threat. Businesses have been forced to rethink flood resilience and sustainability after costly typhoons and flooding caused billions in damages and GDP losses. Without swift action, Vietnam risks losing up to 14.5% of its GDP annually by 2050, with millions potentially falling into extreme poverty.

Demographically, Vietnam is confronting a shrinking workforce as its “golden population” window closes by 2039, creating pressures on productivity and social services. To counter this, the government is expanding preventive healthcare, encouraging longer workforce participation including by women, and addressing social care demands to promote healthy aging.

Vietnam’s path to becoming Asia’s next tiger economy is a complex balancing act of embracing innovation and private enterprise while managing demographic transitions, environmental risks, and geopolitical pressures. The success of this grand economic overhaul could redefine the nation’s role on the global stage in the coming decades.

GDP Growth: Vietnam’s economy grew by about 7.1% in 2024 and maintained a strong growth pace of approximately 7.5% in the first half of 2025, despite global uncertainties and trade tensions. Growth forecasts for Vietnam in 2025 range between 6.3% to around 7.5%, depending on sources. 

In contrast, Pakistan’s GDP growth has been much slower, with about 2.5% growth in 2024 and a projected 2.7% in fiscal year 2025. Pakistan’s target growth is around 4.2% for the next fiscal year, but it has struggled to meet its targets in recent years.

GDP Per Capita: Vietnam’s GDP per capita stands around $2,600 (nominal) or higher when adjusted, which is significantly above Pakistan’s approximately $1,800 nominal GDP per capita. Vietnam’s per capita income has grown exponentially since the 2000s, while Pakistan’s growth has been more modest.

Trade Balance: Vietnam enjoys a substantial trade surplus (around $27-44 billion), driven by exports in manufacturing, technology, and services. Pakistan, conversely, faces a large trade deficit (about $19-35 billion). Vietnam is a major global manufacturing hub with strong foreign direct investment (FDI) inflows, while Pakistan’s trade deficits and reliance on imports present ongoing challenges.

Structure & Investment 

Vietnam has diversified its economy, expanded high-tech sectors, and implemented significant reforms promoting private sector growth and infrastructure development. It also attracts substantial FDI (around $25 billion annually). 

Pakistan’s economy is less diversified and faces structural issues, but has recently improved macroeconomic stability and seen increased remittances, with ongoing fiscal consolidation efforts.

Fiscal Health 

Vietnam maintains relatively stable inflation rates and a positive current account balance, whereas Pakistan has undergone cycles of high inflation but has seen recent improvements with inflation dropping to multi-decade lows and a current account surplus in early 2025.

Vietnam is projected to sustain above 6% GDP growth in 2025 and beyond, supported by reforms, exports, and investment in technology and infrastructure, positioning itself as one of Southeast Asia’s fastest-growing economies. Pakistan’s growth outlook remains more modest with challenges in meeting ambitious targets, but it is stabilizing and attempting reforms to boost growth.

Vietnam has clearly outpaced Pakistan economically, with higher and more stable GDP growth rates, higher per capita income levels, a strong trade surplus, and more robust FDI inflows. Its successful transition toward a more diversified and technology-driven economy contrasts with Pakistan’s slower growth, trade deficits, and emerging fiscal improvements. Vietnam’s reforms and strategic economic planning have positioned it for continued strong growth, while Pakistan’s economy, though improving, remains more constrained and growing at roughly one-third its size and pace.