Major administrative reform to boost growth and efficiency

With an overwhelming 96.4 per cent of delegates voting in favour, the NA approved the resolution on reorganising provincial-level administrative units on June 12.

This transformative decision is expected to unlock new avenues for national development and enhance the leadership role of key growth drivers.

The NA session on June 12

In light of the resolution, the number of provinces and centrally governed cities has been reduced to 34, comprising six centrally governed cities; Hanoi, Ho Chi Minh City, Haiphong, Hue, Danang, and Can Tho and 28 provinces.

The resolution came into force upon its adoption on June 12, ensuring that the new local governments in the reorganised provinces and municipalities will begin operations from July 1. In the interim, existing local governments will continue functioning until the new structures are fully operational.

Minister of Home Affairs Pham Thi Thanh Tra described the decision as, 'a revolution in organisational structure', highlighting the unified, resolute commitment across the entire political system.

"This is a tremendous collective effort by party committees, local authorities, and especially the enthusiastic support of the people and voters nationwide," said Minister Tra.

Speaking in the plenary session on the morning ahead of the historic vote, delegates expressed strong consensus and broad support for the restructuring. It was noted that many smaller localities had exhausted their development space, with investments spread thin and yielding less-effective results.

The consolidation of localities is viewed as both a strategic and urgent measure to enhance governance, reorganise development space towards greater cohesion, leverage economies of scale, and optimise resources.

"This is a unique opportunity to comprehensively restructure regional development models, redistributing population, infrastructure, and investment resources according to a new strategic vision. It will significantly contribute to the country’s fast and sustainable development goals," said Nguyen Huu Thong, a delegate from Binh Thuan province.

Tran Hoang Ngan, a delegate from Ho Chi Minh City, noted that since 1975, Vietnam has adjusted its provincial-level administrative structure three times, increasing from 38 to 63 units, a 66 per cent rise.

"In today’s era of Industry 4.0, shaped by the Internet of Things, AI, big data, and digital transformation, we now have the tools to streamline governance, reduce budget strain, and enhance administrative efficiency," said Ngan.

"Reducing the number of localities from 63 to 34 not only lightens the fiscal burden but, more importantly, creates new development momentum and space. The merger of localities is not just an addition in size and population, it’s a multiplier effect for GDP," he added.

On implementation, delegates stressed the need for a broad, flexible legal framework tailored to each locality’s demographic, economic, and defence-security conditions.

They advocated for robust decentralisation and delegation of powers to local governments, following the principle of local autonomy and accountability.

Delegate Thong from Binh Thuan proposed prompt resolution of employment and benefit policies for officials and public employees affected by the restructuring.

He called for retraining schemes, job placement support, and assistance in stabilising living and working conditions for personnel relocated to new administrative centres. "Improving infrastructure linkages, especially in newly enlarged localities, is also crucial," said Thong.

Meanwhile, delegate Nguyen Minh Tam from Quang Binh province, voiced concerns from constituents about the potential erosion, or even loss, of geographical indicators, particularly those linked to nationally and internationally recognised brands.

Tam explained that geographical indications serve as 'passports' certifying the unique quality and reputation of products associated with specific local natural conditions and traditional know-how. These intangible assets are crucial for enhancing product value, boosting exports, and building national brand identity.

"Therefore, it is important for the government to implement measures to safeguard cultural, historical, and brand values-including geographical indications- when reorganising provincial-level administrative units," Tam said.

Minister Pham Thi Thanh Tra concluded by affirming the profound historical significance of the National Assembly’s decision.

"The ultimate goal of this restructuring is to advance the nation’s development, to build a prosperous, civilized, and thriving Vietnam where all citizens enjoy a happy life," she noted.

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