by Victoria Kwakwa, Country Director, World Bank, Viet Nam.
Ha Noi has a unique charm. It is still very liveable and residents can hang out in parks or use them for quiet walks, aerobics, tai chi and other exercise. Some people still pedal to work or to school.
However, Ha Noi like other Asian cities, is urbanising rapidly, evidenced, for example, in the rapid development of the My Dinh area, and the numerous skyscrapers that are transforming the skyline. This change comes with challenges: managing noise, heavy traffic - and air and water pollution.
I live in a quiet neigh-bourhood and enjoy being woken by chirping birds, but such neighbourhoods are increasingly rare. The central city is much noisier. No matter where you live, it's impossible to avoid noise from construction or traffic.
In my three years in Ha Noi, I've seen a rapid increase in motor bikes and cars. My trip to and from work at rush hour now takes about 30 minutes, almost twice as long as it did when I arrived.
But the challenges can be managed with the right policies. According to the Viet Nam Urbanisation Review, which the World Bank released today, the nation is urbanising at a rate of 3.4 per cent per year. Most of it is in and around HCM City and Ha Noi.
This is a good thing. Urbanisation will continue to have a central role in Viet Nam's economic growth and poverty reduction. No country has achieved high income status and strong economic growth without first urbanising. Most countries become at least 50 per cent urbanised before fully reaching middle-income status. Viet Nam expects to reach that point by 2025.
But can Viet Nam harness the economic and social opportunities of urbanisation and successfully mitigate the challenges it poses?
The success of the nation is reflected in GDP growth and remarkable reductions in poverty. But policy makers must do much more to ensure these gains continue and that urbanisation provides benefits to all segments of society.
While Viet Nam has done a relatively good job in providing basic services and the absence of large-scale slums suggests that most people have access to some sort of housing, there are definitely signs that this is changing. Land prices in HCM City and especially in Ha Noi are increasing beyond the reach of the average resident. Analysis suggests that the typical housing provided by land developers is affordable to only the top 5 per cent of income earners.
Viet Nam's two tiered land pricing system and lack of transparency in land markets needs to be addressed as does the extensive use of land sales and leases to finance local budgets – a practice that induces urban sprawl. A healthy debate on the Land Law planned for this session of the National Assembly, could provide an opportunity to address many of the inequities and inefficiencies in urban land markets and practices.
Planners must also address the problem of urban mobility by providing transport options for all citizens, including the poor, children, the elderly and disabled. The extensive use of motorbikes has led to the dispersion of jobs and housing - and helped create an urban sprawl. While motorbikes help keep commuting times low, the transition to cars will lead to gridlock unless there is significant investment in roads and public transport.
There is simply not enough road space for many cars. Addressing these problems also means modern-ising and reforming Viet Nam's planning systems, strengthening urban management and ensuring better co-ordination between levels of government and between city departments. At present, Viet Nam's planning institutions – a legacy of central planning – are simply not capable of working within the emerging market framework.
The recently approved Urban Master Plan for Ha Noi is an example of why the planning system needs to change. It proposes a system of satellite cities consuming large amounts of land and reducing urban densities - but this will cost tens of billions of dollars to develop and risks locking-in public investments where there is no demand.
The proposed Ha Noi Master Plan would consume nearly twice as much land for a projected population of 6.5 million by 2030 as Seoul, which has 10.5 million.
In today's world where climate change is a concern for everyone, Viet Nam should be focusing on developing high density, compact cities that are energy efficient and provide suitable housing and employment opportunities for everyone. — VNS