The Vietnamese National Assembly convened an extraordinary meeting this month (Feb. 12-19) in Hanoi to discuss and resolve a “revolutionary” overhaul of the government apparatus. This move can be considered the most significant political development in Vietnam since the launch of the country’s Doi Moi (renewal) policy in 1986. It is part of an institutional reform led by the Communist Party of Vietnam under Resolution 18, aimed at streamlining the political system for greater effectiveness and efficiency. The state apparatus restructuring has been pushed strongly recently by To Lam after he became the new party chief who called it as a “revolution” to help Vietnam move into a “new era” of “national rise”.
In mid-November 2024, the Prime Minister signed off on a decision to establish a steering committee to review the implementation of the Party Central Committee’s Resolution 18, which was issued in 2017. A few weeks later, the Government issued guidelines for the restructuring process. On Jan. 24, the Gov’t largest-ever restructuring plan was officially approved by the Party Central Committee, making it a “historic reform” described by the Home Affairs Minister. Under the plan, Vietnam will cut at least one-fifth of the public sector workforce and reduce the number of the government ministries and ministerial-level agencies from the current 22 to 17. The reorganization will also eliminate 13 general departments, 518 departments and 218 divisions across ministries.
The new Cabinet structure was adopted by the National Assembly on Feb. 18, together with the revised Law on Organization of the Government, effective as of March 1st, 2025.
Below are a number of key changes in the Cabinet:
The Ministry of Planning and Investment (MPI) is merged with the Ministry of Finance (MOF). The new ministry is now the biggest one in the government and is named as the Ministry of Finance. It will take charge of the areas of finance (including state budget, taxes and fees, national reserves, public assets, corporate finance, public debts and foreign aid), accounting and audit, securities and stock market, customs, insurance, and investment. The MOF will also take over the management of 18 state-owned groups and corporations from the Commission for the Management of State Capital at Enterprises (CMSC), which will be dissolved.
The Ministry of Information and Communications (MIC) is merged with the Ministry of Science and Technology (MOST). The new ministry is named as the Ministry of Science and Technology and will oversee the areas of national digital transformation, ICT industry, telecommunications, e-transactions, innovation and start-ups, standardization and quality management. The MIC’s function of state management over the press and publishing will be transferred to the Ministry of Culture, Sports and Tourism (MCST). Accordingly, the MIC’s Authority of Broadcasting and Electronic Information (ABEI), which monitors social media and online games, will be placed under the MCST.
The Ministry of Agriculture and Rural Development (MARD) is merged with the Ministry of Natural Resources and Environment (MONRE) into a new ministry named Ministry of Agriculture and Environment, which will be responsible for issues of land management, water resources, climate change and environmental protection.
The Ministry of Transport (MOT) is merged with the Ministry of Construction (MOC) into a new MOC, which will oversee the areas of housing and infrastructure development.
The Ministry of Labor, Invalids and Social Affairs (MOLISA) is merged with the Ministry of Home Affairs (MOHA) into a new MOHA, which will be in charge of labor and employment, besides local governance and administrative reform. MOLISA’s function of social protection and child protection will be transferred to the Ministry of Health (MOH) while its mandate of vocational education management be transferred to the Ministry of Education and Training.
A new Ministry of Ethnic and Religious Affairs has been set up based on restructuring the Gov’t Committee for Ethnic Affairs and MOHA’s divisions on ethnic issues.
Eleven ministries and gov’t agencies have been retained, including the Ministry of Defense (MOD), the Ministry of Public Security (MPS), the Ministry of Justice (MOJ), the Ministry of Industry and Trade (MOIT), the Ministry of Culture, Sports and Tourism (MCST), the Ministry of Foreign Affairs (MOFA), the Ministry of Education and Training (MOET), the Ministry of Health (MOH), the State Bank of Vietnam (SBV), the Government Inspectorate (GI) and the Office of the Government (OOG). It should be noted that the MPS has taken on several new responsibilities as transferred from other ministries, including the management of drug rehabilitation and post-rehabilitation care (from MOLISA), issuance of judicial record certificates (from MOJ), grant of driving licenses (from MOT), and network and information security (from MIC). MobiFone, one of the largest telecom operators in Vietnam, has now been put under the MPS.
Implications for businesses:
Since the government restructuring is aimed at streamlining the system and cutting through bureaucracy, companies may expect simplified administrative procedures and a faster decision-making process. However, this would probably not happen in the near future as many departments and officials would need time to adapt to changes and settle in their new organizations and positions. As such, in the short run, there will likely be some delays in administrative processes. Businesses are recommended to be patient and maintain regular communication with their existing government contacts in order to be promptly informed of relevant developments.
The restructuring will result in many regulatory changes (according to the MOJ’s preliminary review, 184 laws and 200 decrees will need to be amended), which will subsequently impact various industries. Companies, therefore, must be vigilant and closely monitor regulatory developments to be well prepared for compliance and make adjustments to their business plans or strategies if necessary.-
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