Aimed at streamlining the public sector, the government’s move will reduce provinces and lower administrative units to slash state spending.
In a bold move to slash government spending, Vietnam is set to halve the number of provinces and significantly reduce commune-level authorities by up to 70%. This plan is part of the country’s broader initiative to trim billions from state budgets, which has already seen cuts to government ministries, agencies, and public sector jobs.
The Interior Minister, Pham Thi Thanh Tra, confirmed on March 18 that the restructuring process will be completed before August 2025. The government intends to cut the number of provincial administrative units by approximately 50%, while grassroots-level administrative units may be reduced by 60% to 70%.
Currently, Vietnam operates with 63 cities and provinces, alongside around 700 district-level units and over 10,000 commune-level authorities. As part of the cost-saving reforms, district-level authorities will also be eliminated, marking a significant reshaping of the political landscape.
In line with the downsizing efforts, the public sector workforce will be reduced, with an estimated 100,000 workers set to be laid off or encouraged to retire early in the next five years. To date, over 22,000 public sector jobs have been cut.
This restructuring, described by Tra as a “real revolution” in the political system, is expected to have a profound impact on Vietnam’s administration. However, concerns have arisen over potential disruptions, with some reports suggesting delays in provincial offices as procedures slow down. Despite these concerns, the Vietnamese government has assured that the changes will not negatively affect the business or investment climate.
These sweeping reforms come under the leadership of General Secretary To Lam, who has stressed the need to remove inefficiencies within the state apparatus. Although the long-term goals of the reforms are to modernise the system and improve efficiency, some worry about the short-term challenges these drastic changes might bring.
