Central localities need to boost administrative reform to increase competitiveness index

 

Hanoi (VNA) – Local authorities in the central coastal and Central Highlands areas should remove post-licensing obstacles and improve inspection activities to boost their provincial competitiveness index (PCI), an official has said.

According to Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, a survey – carried out to compile the Vietnam Provincial Competitiveness Index (PCI) 2017 report – showed that 7 percent of enterprises in the Central Highlands had to wait for over three months after being licensed to have all paperwork for their official operation completed, while the average figure for other regions was between 2 and 3 percent.

There were 14 percent of firms in the central coastal region reported experiencing overlapped inspection content, while 18 percent said the inspection created a breeding ground for improper activity by some of the inspectors. The figures for the Central Highlands were 15 and 24 percent, respectively – the highest nationwide.

Loc said efforts to cut informal fees are necessary, as 62 percent of the enterprises surveyed in the central coastal region and 65 percent of their peers in in Central Highlands said they faced difficulties caused by administrative personnel. The two regions’ sub-indices on transparency and informal fees were ranked fifthand sixth respectively, and the lowest among those regions involved in the PCI 2017 report.

He suggested that strengthening the connection among provinces and cities in the central coastal region, particularly in investment attraction and business climate improvement, is an important move.

Dau Anh Tuan, Director of the VCCI’s Legal Department and a member of the PCI survey team, said companies in the two regions demand a fairer business climate. A total of 48 percent of them pointed to the fact that local authorities often prioritise tackling foreign businesses’ obstacles over those of domestic businesses.

Of Central Highlands firms, 79 percent agreed that most local business resources are owned by companies which had established a close relationship with the authorities.

Tuan highlighted that transparent, professional, and trustable administrative procedures are a pivotal factor needed for these localities to increase their annual number of newly established enterprises.

Despite several shortcomings, both regions recorded positive PCI increases, with the central coastal region scoring 63.09 points and the Central Highlands 60.05 points. Their respective points for 2016 were 59.8 and 56.92.

The PCI Report is an annual joint project between the VCCI and the US Agency for International Development (USAID). It has been produced annually since 2005 to assess the ease of doing business, economic governance, and administrative reform efforts by the provinces and cities in Vietnam in order to promote the development of the private sector.

The 2017 PCI Report was the 13th iteration and was based on responses from 12,000 enterprises, including more than 10,200 domestic private enterprises from 63 cities and provinces and nearly 1,800 foreign invested enterprises in 21 provinces in the country.

It revealed optimism among private and foreign business communities and helps to raise their economic prospects.

Fifty-two percent of PCI 2017 respondents in the domestic survey said they planned to broaden the size of their operations over the next two years, the highest level since 2011, while the number of firms planning on scaling down or closing their business was extremely low at 8 percent. -VNA