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Provinces make little headway in business facilitation
Vietnamese provinces have made some improvements in economic governance, but in general, the progress made in enhancing the business environment has been insipid, a survey released Thursday showed.
The annual Vietnam Provincial Competitiveness Index (PCI) Report, released by the Vietnam Chamber of Commerce and Industry (VCCI), rates provinces and cities nationwide on a 100-point scale on their efforts to improve their business environments and promote private sector growth.
Da Nang City topped the list with 72.18 points this year, pushing Binh Duong Province to second place for the first time. Along with third-placed Vinh Phuc Province, the localities formed the group that has obtained “excellent” rankings.
Ho Chi Minh City went down three spots to number 13, while Hanoi was no longer in the “mid-high” group. Northern Dien Bien Province had the lowest score this year with 36.39 points.
Developed by the US Agency for International Development’s Vietnam Competitiveness Initiative (VNCI) and VCCI, the PCI is now in its fourth year.
This year, the PCI research team surveyed more than 7,820 Vietnamese entrepreneurs and managers of small-and medium-sized enterprises nationwide for the report.
The PCI measures economic governance of each locality on various criteria including local leadership, transparency, infrastructure, human resources, access to land use and paperwork.
According to the PCI research team, it took an average of 12.5 days for a company to obtain a business license, compared to 15 days last year.
More than 65 percent of companies surveyed by the team said they had access to legal documents in their localities, or 4 percent more than last year. About 36 percent of the companies said they had to negotiate with tax officers, compared to 41 percent last year and 61 percent in 2006.
Despite such improvements, the PCI research team said in general, provincial economic governance did not improve much this year. The average score this year was 53.2 points, down from last year’s 55.6 points. The number of provinces in the “low” and “mid-low” groups increased to 18 from 10 last year.
There are still three main factors hindering economic growth in localities - paperwork, human resources and infrastructure, online newspaper VietnamNet quoted VCCI Chairman Vu Tien Loc as saying.
For instance, only 18.50 percent of the businesses surveyed said they were satisfied with the local labor force, he said.
This year’s report also uses the PCI Infrastructure Index for the first time, which assesses the quality of provincial infrastructure. The research team said the introduction of the infrastructure index would help local authorities know what to develop first and help investors make better decisions.
Nguyen Dinh Cung, head of the Central Institute for Economic Management’s Macroeconomic Division, said the infrastructure index, however, could widen the gap among localities, especially between provinces in mountainous areas and large cities.
Cung said the PCI should focus on economic governance to encourage provinces with fewer advantages to think about new ways to improve their competitiveness.
So far, the index has successfully become an indicator that local authorities can use to formulate plans to drive their provinces forward, he said.
Over the past year, more than 40 provinces and state agencies have used the PCI to engage in public-private dialogue and analysis with local communities to better understand the factors that can drive economic growth, a statement released by the US Embassy said Thursday.
“PCI provides feedback and guidance from the business community about how government can better support business development, job creation, trade and investment, all of which help raise the standard of living for all citizens,” said US Ambassador Michael Michalak.
According to the PCI research group, more than half of the provinces with higher scores this year, including Thua Thien-Hue, Tien Giang, Ca Mau and Long An, were those that had promised to improve their rankings.
Cung suggested the central government should carry out further reforms that allow each province to be creative in improving its business environment.
TN, TBKTSG
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