From national reunification to aspiration for an integrated development space

In 1975, Vietnam united the country through determination and a shared aspiration for independence. Today, in a very different context, the country faces a new challenge: unifying its market through institutional reform, writes Dr. Nguyen Sy Dung, former deputy head of the Office of the National Assembly - the country's legislature.

April 30, 1975 marked the end of a period of division and the beginning of an era of political and territorial reunification in Vietnam. It laid the foundation for the country to launch its Doi moi (reform) in 1986, opening the economy and gradually integrating into the global system.

Forty years of reforms have delivered significant achievements: the economy has expanded by dozens of times, millions have been lifted out of poverty, and Vietnam has become an important link in global supply chains. Yet behind these gains, a growing reality has emerged: the country’s development space remains far from seamless.

A logistics company can easily see this in Vietnam’s high logistics cost, which is equivalent to about 16-20% of GDP - well above the 10-12% seen in developed economies. Part of the reason lies not only in infrastructure gaps, but also in fragmentation in governance, regulations and implementation across localities.

Investors face a similar challenge. The same project can be treated differently depending on the locality, with varying interpretations and enforcement of regulations. Some places “roll out the red carpet”, while others lay out “a carpet of procedures”. This reflects a broader truth: while the country is unified in form, its development space is not yet fully unified.

“Invisible bottlenecks” fragmenting the market

Unlike the visible divisions of wartime, today’s fragmentation is largely “invisible” but no less restrictive. It does not lie in geographic boundaries, but in institutional ones.

First, there is institutional fragmentation at the local level. Amid increasing decentralization, many local authorities have introduced their own rules and conditions to attract investment or manage markets.

Without a unified framework and effective oversight, however, such autonomy can lead to “different rules in different places”. A business may find favorable conditions in one province but face barriers in another - despite operating under the same national legal framework.

Second, the legal system remains inconsistent and uneven in enforcement. It is not uncommon for central regulations to be interpreted differently across localities, or even among agencies within the same locality. This creates a “hidden compliance cost” for businesses - not only in financial terms, but also in time and lost opportunities.

Third, high transaction costs continue to be a major constraint. Surveys of the business environment show that companies still devote significant resources to administrative procedures, licensing and handling issues beyond formal regulations. These costs not only reduce efficiency but also distort competition.

At a deeper level, the common thread is clear: market fragmentation stems not from geography, but from institutions. As such, market integration cannot rely solely on physical infrastructure - it must begin with institutional reform.

Market integration as a strategic reform agenda

If national reunification was a historic event, market integration is a reform process - one that requires vision, determination and strong execution.

The first pillar is to unify the “rules of the game” nationwide. This goes beyond issuing common regulations; it requires consistency in interpretation and enforcement. A sound legal system is not only well-written, but also applied uniformly everywhere. Only then can businesses operate with the same expectations, whether in Hanoi, Ho Chi Minh City or elsewhere.

The second pillar is to ensure the free flow of resources. A unified market requires the smooth movement of goods, capital, labor and data, with low costs and minimal barriers. This is particularly important in the digital economy, where data has become a key production factor. If data is fragmented across sectors or localities, the economy itself becomes fragmented.

The third pillar is to build a connected, data-driven state. When government agencies are interoperable and data is shared under common standards, many barriers will naturally disappear. Citizens and businesses will no longer need to navigate multiple agencies to complete procedures; instead, systems can process, verify and handle tasks automatically.

The fourth pillar is decentralization accompanied by effective checks and balances. A unified market does not mean centralization. On the contrary, decentralization is essential to foster local initiative and innovation. But it must be paired with robust safeguards, including clear laws, transparent oversight and digital tools for real-time monitoring and evaluation. This allows localities to remain flexible without deviating from standards, and innovative without undermining market unity.

In 1975, Vietnam united the country through determination and a shared aspiration for independence. Today, in a very different context, the country faces a new challenge: unifying its market through institutional reform.

This is not merely a slogan, but a decisive requirement for future development. In an increasingly competitive world - where capital, technology and talent move rapidly - a fragmented market will struggle to seize opportunities. By contrast, a unified, transparent and efficient market can become a powerful source of national competitiveness.