Viet Nam’s Blue Economy: Unlocking Marine Potential Through Smarter Investments

The World Bank’s Boosting Vietnam’s Sustainable Marine Economy: A Public Expenditure & Investment Review (PEIR) is the first national-level Blue PEIR of its kind. Developed in collaboration with Vietnam’s Ministry of Planning and Investment and with research contributions from institutions like the Institute of Strategy, Policy on Natural Resources and Environment (ISPONRE) and The University of New South Wales (UNSW)’s Center for Sustainable Development Reform, the report presents a comprehensive analysis of the country’s investment trends, institutional gaps, and environmental risks tied to its ocean economy. With more than 3,260 kilometers of coastline and a marine territory that triples its landmass, Vietnam holds extraordinary potential to harness its marine resources. But with just 5.83 percent of gross value added (GVA) coming from marine sectors and employment dependent on increasingly fragile ecosystems, the country is now at a critical juncture.

Investment Concentration in Infrastructure Leaves Emerging Sectors Behind

Between 2016 and 2022, the bulk of public investment, close to 80 percent, was directed towards physical infrastructure like roads, bridges, and ports. While these are essential for enabling trade and access, the lopsided focus has left strategic, high-potential sectors such as offshore renewable energy, marine aquaculture, and ecotourism underfunded. The report underscores that only a sliver of public funds has gone into renewable energy development, despite the country’s abundant wind and solar potential. Similarly, sustainable aquaculture and tourism projects received less than 3 percent of total marine-related public investments. Coastal provinces in the Red River Delta and central regions attracted the most infrastructure funding, but investment strategies often failed to reflect regional strengths or local ecological needs, leading to inefficiencies and missed opportunities.

Institutional Misalignment and Data Gaps Hinder Planning

A core issue highlighted in the PEIR is the misalignment between Vietnam’s marine sector classifications and international frameworks such as the UN’s System of Environmental-Economic Accounting (SEEA). This disconnect hinders effective data collection and makes it difficult to track the performance and impact of the marine sector. The country’s Marine Spatial Planning (MSP), a key tool to manage competing coastal uses, remains in early stages and is fragmented across agencies and jurisdictions. As a result, overlapping development, such as aquaculture ventures situated in areas designated for tourism or conservation, is common. Local governments, heavily reliant on central budget allocations, face limitations in adapting investments to regional contexts. This centralization also stifles innovation and reduces flexibility to address fast-evolving environmental and economic risks in coastal zones.

Ecological Degradation Undermines Economic Potential

Rapid industrial expansion has taken a visible toll on Vietnam’s coastal ecosystems. The report recounts several major environmental incidents, including the 2016 Formosa Ha Tinh disaster, which discharged toxic chemicals into marine waters, destroying fish stocks and decimating local incomes. In 2022, a diesel oil spill in Thai Binh wiped out clam farms and displaced nearly 100 households. Mangrove forests, vital for storm protection and carbon sequestration, have declined by over 70 percent since 1950, with annual economic losses from degraded mangroves estimated at more than US$20 million in the Mekong Delta alone. Vietnam is also one of the top five global contributors to marine plastic pollution, discharging an estimated 0.28–0.73 million metric tons of debris into the ocean annually. Despite new regulations and local initiatives, such as Danang’s Blue Ocean Festival and Circular No.52 on pollution control, enforcement remains weak, and wastewater treatment infrastructure in industrial zones remains insufficient.

Aquaculture and Tourism: Sectors of Promise and Challenge

Aquaculture and marine tourism together support millions of jobs and are integral to Vietnam’s blue economy. However, the report warns that both sectors are now at a tipping point. Overfishing, habitat degradation, and illegal, unreported, and unregulated (IUU) fishing practices led the European Union to issue a yellow card warning in 2017, signaling poor sustainability standards. Offshore aquaculture offers a potential solution to reduce nearshore pressure but faces steep entry costs, regulatory burdens, and high operational risks that deter private investment. In tourism, the prevailing model of high-volume, low-quality resort development has caused environmental damage while delivering minimal local benefit. The PEIR advocates for a pivot towards community-based tourism that blends cultural preservation with environmental stewardship, ensuring more equitable distribution of benefits and long-term sustainability.

Pathways Forward: Reform, Reclassification, and Resilience

The PEIR offers a detailed roadmap to reform Vietnam’s marine economy. In the short term, it urges the government to revise sector classifications, introduce co-management models for local conservation, and integrate sustainability criteria into public procurement. In the medium term, the report proposes piloting new public-private partnerships in aquaculture and offshore wind, establishing a blended finance facility for marine sectors, and implementing comprehensive Marine Spatial Planning across all coastal provinces. Long-term strategies include building centralized marine data systems, scaling up offshore renewable energy and mariculture, and integrating ocean accounting into national planning. The report envisions Vietnam as a global model of sustainable marine development, showcasing innovation in ecological-fiscal transfers and leveraging its natural capital to attract responsible investment.

Through its rigorous analysis and actionable insights, the PEIR equips policymakers with the tools to transition from an extractive and fragmented marine economy toward one that is resilient, inclusive, and climate-smart. By bridging investment gaps, aligning institutional structures, and embedding sustainability into policy, Vietnam has the opportunity to unlock the full promise of its marine wealth for current and future generations.