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Household business environment index at average level
The national index of informal household business environment reaches the average level of 62.7 points in terms of business convenience, said the Institute of Policy and Strategy for Agricultural and Rural Development (IPSARD).
In its second pilot survey on investment environment for unregistered household businesses, IPSARD says the research was aimed to collect data for family business environment index, also known as the Formality Index (FI), in Vietnam’s rural areas.
The index will facilitate the authorities to supervise and evaluate local business environment, especially for household businesses, and then to bring out appropriate business development policies.
At present, the provincial competitiveness index (PCI), developed by the Vietnam Chamber of Commerce and Industry (VCCI) based on the registered commercial enterprises, have become a popular business environment index to the society.
However, individual household businesses in the informal sector also play an important role in creating jobs for local laborers, and therefore the environment for them needs assessment. According to the General Statistics Office, the amount of unregistered family businesses was 4.1 million in 2010, attracting 7.5 million laborers, or a rise of 1.5 times against 2004.
Besides creating jobs, increasing income and reducing poverty in rural and remote areas, household businesses also create the widest network expanding further into disadvantaged areas, thus helping with the trade balance and local economic development.
According to the pilot survey, the national FI was 62.7 points on a scale from 0 to 100 points, with the highest point reflecting the most favorable business conditions.
In particular, the southeast and highland regions scored the lowest points while Mekong Delta and Red River Delta areas recorded the highest. Considering each province, household businesses in Thai Binh, Ca Mau and Ha Nam had the most favorable conditions, while those in Lai Chau, Binh Duong and Dak Nong were on the opposite.
According to IPSARD, the FI tends to be higher in moderately developing provinces and lower in others with strong development or, vice versa, underdevelopment.
Economic expert Pham Chi Lan said the result basically reflected the business environment picture of informal household businesses. However, it may be not highly reliable because the number of respondents involved was limited.
vietnamnet
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