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Resolute implementation, not nice plans, is key to administrative reform
Vietnam deserves its relatively low ‘business environment’ ranking by the World Bank, suggests prominent economist Le Dang Doanh, because though there have been incremental improvements, there have been no breakthroughs in the nation’s quest for administrative reform.
On the heels of a report that Vietnam has fallen back from 91st to 93rd in the World Bank’s annual ‘Doing Business’ survey of 183 countries, the on-line paper VnMedia interviewed Dr. Le Danh Doanh, former head of the Central Institute for Economic Management (CIEM).
VnMedia: Why haven’t our improvements in the business environment enabled Vietnam to catch up with other countries at the same development level?
Dr. Le Dang Doanh: I think that the problem lies in policy implementation. Our goals for simplification of administrative procedures are OK, but we have been slow to implement the policies, so there have been only modest efficiency gains in the business environment. This can be seen especially in taxation. Vietnam has been pushing implementation of information technology for several years to modernize the tax administration. However, businesses still must spend much time – and know who to ‘take care of’ – to fulfill their tax duties.
In Vietnam, businesses have lots of expenses for which they cannot get invoices. Tax offices, however, always require enterprises to show all documents and invoices to prove that the expenses are lawful. The World Bank’s report showed that the number of hours enterprises have to spend to fulfill tax duties is very high. A survey we did some time ago at CIEM found the same thing.
VnMedia: What should the state do now to create a business environment that attracts more investors?
Mr. Doanh: The Government needs to perfect the legal framework by making it simpler and easier for businesses to implement. However, a perfect legal framework will not help if there are problems in the implementation. We should aim for a breakthrough in implementing the policies. Measures need to be carried out systematically and in a comprehensive way to ensure harmonized implementation of laws like the investment law, land law and construction law. To effectively renovate our administrative procedures, we will need the cooperation of associations, experts and international organizations.
VnMedia: The Government is now determined to reduce ‘administrative procedures’ by 30 percent. Will this improve the business environment?
Mr. Doanh: A successful 30 percent reduction in such procedures will surely help lift the burden on businesses. That will only happen if there’s high determination from ministries, branches and local authorities. We need action, not just plans on paper. It will be not easy to cut down administrative procedures because red tape can bring benefit to some state officials. However, the business community still hopes that the Government’s objective will be attained, helping them save money and time.
(VNNB note: The complete World Bank ‘Doing Business’ rankings may be found at www.doingbusiness.org/economyrankings/)
VietNamNet, VnMedia
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