Vietnamese growth potential is huge, but so are the potential bottlenecks. Perhaps the biggest one is skilled labor; firms are overbidding each other for a limited supply of college graduates. Some of the entrepreneurs we interviewed in higher-skilled sectors like IT reported that wages doubled last year. A little of this was clawed back by double-digit inflation, but most of that is pure gain. Workers down the value chain, by contrast, seem to be seeing increases on the order of 12-15%. That implies real wage growth of several percent a year, which is nothing to sneeze at, but not the boom that the educated workers are seeing.
The government is hoping to fill the gap with private schools (indeed, it has no choice; taxes are already very high for a poor country). Meanwhile, however, the energy market is cramping the boom from the infrastructure side. Electricity prices are controlled here, and as usual when that is the case, conservation is not exactly a watchword. The grid is maxed out, and the state electric utility, which has been cross-subsidizing rising fossil fuel generation prices out of its cheap hydro power, has apparently reached its financial limits. But decontrolling energy and fuel prices is politically very tricky, and it's not clear that there's the will to do so; the people we've interviewed are talking about full deregulation sometime in 2030.
There will not be industrial growth, or substantial further poverty reduction, without more energy. But without market pricing, they won't get it.
There's an effort underway to create a market in power generation and distribution, with a timeline much shorter than the one you mention. They were supposed to have a plan introduced this year, with time horizons 5 years out or so, partly to attract foreign investment into power generation. They've already theoretically separated power generation from distribution, creating a separate power distribution company which can buy power from different suppliers. But the distribution company is still a monopoly (with monopoly local subsidiaries), and it's closely tied to the old national power generation company, EVN. The initial plan for creating a competitive market was largely drawn up by EVN, and as a result it allowed energy producers to be shareholders of the national power distribution authority it set up -- which would have allowed EVN to use its dominant influence and its connections to its old daughter companies to give itself preferential treatment, discouraging foreign companies from entering the power generation market, and failing to create true competition, thus failing to deliver lower prices to consumers. It also would have allowed generators to raise prices and pass the bill on to government in much the same way as the failed California electricity marketization did.
The good news is that the plan was sharply denounced by the lead economist at the local World Bank for its flawed structure. This led the Prime Minister to reject the plan and direct EVN to go back to the drawing boards to present a more suitable plan. It was a very encouraging lesson in both the dangers of a naive faux-"privatization" plan a la Russe, and how that can be avoided by timely criticism and a government that actually cares about getting these structures and regulations right. Unfortunately the same kinds of attitudes are less evident in other areas, like the transportation sector.
Oh, the other thing is, electricity rates in Vietnam aren't much more controlled than those in the US. Only 11 states in the US really have deregulated electricity prices; the rest have rate caps, or the legislature must approve rate increases. In Vietnam, the consumer electric bill is separated into tranches. The first tranch is very cheap, but it's just enough power to run some fans, neon lights, and maybe a fridge and a TV for the month. So that subsidizes the poor. After you exceed that tranch, as anybody with a middle-class lifestyle will, rates go up sharply. My electricity bill here was $65 last month, which, considering we don't have a clothesdryer or dishwasher and we're not using much AC in the nice weather, seems comparable to what it'd be in the US. It's true that conservation here sucks; I'm not sure whether there may be power subsidies for businesses I'm unaware of, but there's certainly plain old cultural lag, as people are still assimilating the novel idea that one can save money by sealing one's windows.
Have you been visiting India?
Above paragraph can perfectly describe the India situation as well.