This question may be a little bit naive.

First, having lived in Vietnam for several years, I would not describe the people here as “hard working.” Vietnam is indeed part of the Sinosphere, like South Korea and Japan, which are famous (or infamous?) for their fanatical work ethic. But the similarities with these societies are mainly in the realm of “high culture” (i.e. Confucian philosophy and values, artistic influence from China, etc). Otherwise, they are quite different. In terms of lifestyle, I would say Vietnam is actually closer to Southeast Asian countries like Thailand. People prefer a slow pace of life and want to spend a lot of time with family. I wouldn’t describe the Vietnamese as lazy, but most people are “working to live.” They don’t usually “live for work.”

Second, a culture of hard work does not equate to a wealthy economy, and vice versa. North Koreans probably work pretty hard, yet their economy remains backward and dirt poor. France and Italy are not exactly known for a super strong work ethic. Yet they are still first world nations with a high standard of living.

Why is Vietnam still poor? I can list ten reasons below off the top of my head.

1. Vietnam’s feudal monarchy followed the delusional Chinese example of resisting all Western contact and influence in the 19th century. This stubborn and naive position caused the country to fall farther behind the most advanced countries socially, economically and technologically. While late modernizers (Japan, Russia, and to some extent Thailand) were adopting many Western practices in order to preserve their independence, China and Vietnam became easy prey for aggressive imperialist powers.
2. Colonizers were bad in general, but not equally bad. For example, the British and Japanese weren’t always benign rulers, but they established a decent foundation for future modernization in Malaysia, Singapore, Hong Kong and Taiwan by developing public institutions and infrastructure. France’s colonization of Vietnam from around 1870–1945 focused almost exclusively on raw material extraction, and made fewer positive contributions to Vietnam’s development.
3. Three decades of war (1945–75) resulted massive lost opportunity to resume economic development in early post colonial era (to say nothing of the terrible physical destruction of the country and loss of life).
4. The victorious communist regime followed a Soviet style economic model based on central planning after the war, which resulted in famine, human exodus (“boat people”) and overall economic calamity from 1975–1986.
5. Until 1989, much of the government’s resources and attention were diverted to the occupation of Cambodia and a brief and destructive border war with China. Due to these conflicts, Vietnam was politically and economically isoated from ASEAN countries and China, as well as the US, which kept a trade embargo in place. A process of reform began in 1986, but real openness to trade and investment with neighboring countries and America did not begin until around 1994. By then, Vietnam’s economy was an impoverished shambles. Meanwhile many of her neighbors already had some solid industrial infrastructure in place and had joined global manufacturing supply chains.
6. Vietnam has enjoyed good overall growth in the reform era (1994-the present). This i helped Vietnam move out of the ranks of the world’s poorest countries (mostly in Africa) and brought it closer to Indonesia or the Philippines’ level ( still poor, but not so bad). However, macroeconomic policy has been mismanaged at several junctures. This has resulted in periods of high inflation, high public debt, trade deficits, currency volatility and asset bubbles.
7. The government’s slow progress in reforming state owned enterprises (a legacy from the Soviet model) has undermined efforts to improve productivity. China, for example, has been much better in terms of streamlining SOE operations, selling off unprofitable entities, and injecting fresh blood into remaining ones by major share offerings for outside investors. In Vietnam, a lot of the biggest SOEs remain wholly government owned, while others remain involved in non-core and non-strategic sectors like beer brewing, hotels, food processing and even selling ice cream to tourists!
8. The government’s approach to infrastructure development has been chaotic, and unsystematic. Instead focusing on a few major projects that would deliver the most overall “bang for the buck”, Vietnam’s resources have been scattered in a large number of small developments without much economic value (small airports, seaports, roads and refineries located far from economic activity). This is usually blamed on weak power of public domain, limited central control over provincial governments, and a “socialist mindset” that does not want to see Saigon and the surrounding provinces develop too much faster than the rest of the country.
9. Vietnam’s financial markets remain very small and primitive. With the stock market still in the “frontier” category (along with countries like Bulgaria, Bangladesh and Nigeria). A secondary market for bonds does not really even exist. As a result, much of the countries potential investment flows into low yearning, non-productive and speculative assets (bank deposits, foreign currency, gold and real estate).
10. Miscellaneous and related problems such as widespread nepotism and corruption, bad system of higher education, “brain drain”, etc.