According to the 2019 Provincial Competitiveness Index (PCI) recently released by the Vietnam Chamber of Commerce and Industry (VCCI), Vietnam's business environment has improved significantly compared to the previous years.
PCI 2019 recorded more positive trends in reforms at the local level with Vietnam's core PCI indicator reaching its highest position ever at 63.25 points.
This shows that the difference in operation quality between localities is narrowing and the overall picture of the business environment is becoming brighter. The provincial-level government has become increasingly active and creative while making more improvements in solving difficulties for enterprises.
In addition, the business environment has been more equal and transparent with decreasing informal costs.
In localities, most of businesses said that provincial to lower-level government agencies were all proactive and active in accompanying and supporting the business community to quickly remove difficulties for enterprises.
Accordingly, 70-80% of surveyed enterprises expressed their satisfaction with the behaviour of public authorities. In addition, over 50% of enterprises stated that they would expand their business size in the next two years and people tend to be more interested in establishing businesses.
An average of nearly 380 new enterprises per day was established in 2019 with an increasing scale of registered capital.
Despite many bright notes, PCI 2019 still does not meet expectations. In some areas, the implementation of reforms remains slow, accompanied with troublesome procedures and signs of harassment.
59% of enterprises that undertook construction works within the past two years said that they have faced difficulties in dealing with administrative procedures on land and land clearance while 53% had problems in procedures related to construction and planning. In addition, 43% of enterprises encountered obstacles when applying for investment permission.
Informal costs have continuously decreased in recent years but are still high, with more than 50% of enterprises expressing that they have to pay informal costs. These figures show that the local government still has a lot of room in reforming and serving businesses to improve competitiveness and the business environment.
And the solutions are continuing simplifying administrative procedures, facilitating enterprises, and ensuring equality, openness and transparency for businesses, organisations and individuals.
In order to improve the PCI, the focus should be put on institutionalisation and improvement of the economic legal system to pave the way for reforms at grassroots levels.
At the same time, provincial administration should continue to carry out solutions to maintain the momentum of reform and enhance the interaction between the authorities and enterprises so that support programmes for enterprises will pay off.
As a race with no end, the PCI will be a measure of a healthy business environment for the business community. Thus, it is important for provincial authorities to raise a high sense of responsibility and enhance the quality of management officials and civil servants, thereby creating opportunities for enterprises to participate more deeply in the global economy.