Vietnam expands cost cutting drive with province merger plan

HANOI - Vietnam is planning to merge provinces and eliminate district-level authorities, the government said on March 6, as a streamlining drive that aims to slash billions of dollars from state budgets gathers pace.

The cost-cutting measures have already seen the number of government ministries and agencies slashed from 30 to 22, and one in five public sector jobs will be cut over the next five years.

On March 6, a statement on the government’s website cited Prime Minister Pham Minh Chinh as saying that a “key and urgent task” would be to complete the rearrangement of “administrative boundaries... merging some provinces... and cutting off the district level”.

State media said the merging of provinces is scheduled for 2025, aimed at “streamlining the apparatus and improving the quality, efficiency and effective distribution of resources”.

Communist-ruled Vietnam, a one-party state, is currently divided into 63 major cities and provinces, under which there are around 700 administrative units at the district level and more than 10,000 at the communal level.

Almost two million people worked in the public sector as at 2022, according to the government, which announced in 2025 that 100,000 people would be made redundant or offered early retirement as part of the bureaucratic reforms.

It is unclear if there will be further job cuts as part of the provincial mergers, or which provinces will be affected.

Vietnam’s top leader To Lam, who in 2024 became general secretary of the Communist Party of Vietnam following the death of his predecessor, has said that state agencies should not be “safe havens for weak officials”.

“If we want to have a healthy body, sometimes we must take bitter medicine and endure pain to remove tumours,” Mr Lam said last December.

However, there are fears that the bureaucratic reforms could cause short-term chaos,