The national competitiveness depends on many factors and particularly closely relates to the national business environment. Ms Victoria Kwakwa, World Bank Country Director for Vietnam, said Vietnam has made substantial progress in the business environment improvement to enhance its competitiveness.
Vietnam has achieved marked progress. If Vietnam dropped five places from 113 to 118 amongst 128 rated countries and territories in the “Best Countries for Business 2010” on global business environment announced by Forbes in September, the country was one of most improved economies in the “Doing Business 2011” Report released by the International Finance Corporation (IFC) and the World Bank (WB).
Forbes highly appreciated the Vietnamese Government’s efforts in developing a market economy and in international integration. The percentage of agriculture to GDP declined from 25 per cent in 2000 to 21 per cent in 2009; poverty rate was lowered and economic stimulus measures were positively applied during the global recession. But, according to IFC and WB, improvements in easing business start-up, construction permitting and credit information sharing helped Vietnam earn a spot among the 10 most improved economies in the ease of doing business for local firms in 2009/2010.
“The Vietnamese government’s efforts on regulatory and public administrative reforms are reflected in Doing Business 2011 and in the improvement of Vietnam’s overall ranking,” said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, Lao PDR and Thailand. “Looking forward, it will be important to continue the focus on implementation of reform and maintaining the momentum of reform,” he added.
Easing business start-up, permitting, and property registration, and improving credit information sharing helped Vietnam reduce the time and cost to transfer property by introducing more online services and boost the national competitiveness as well as improve investment environment.
Particularly, Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and a tax license and by eliminating the need for a seal for company licensing, helping increase new companies increase and make the economy more active. It also halved the cost of registering newly completed buildings. This and the transfer of the authority to register buildings from local authorities to the Department of National Resources and Environment made dealing with construction permits easier. In addition, the credit information system has been improved, allowing borrowers to examine their own credit report and correct errors.
Although the Doing Business report did not cover all areas but important ones to companies and investors, it showed the ‘castigated’ picture of Vietnam in positive economic improvement. To maintain rapid and dynamic growth in the long term, it is essential to have fundamental changes in the development process of Vietnam. Vietnam needs to build new competitive resources, basing on increased productivity, innovation, differentiation of products and services, and more effective use of investment and trade. On the other hand, Vietnam needs to redefine the role of government in line with the need of emerging dynamic economy market - a role that help the market work better. To do so, it will provide an environment with more a balanced combination of State-owned and private companies to compete in the economy. “Vietnam should choose a sustainable development approach in terms of environment and take into account climate change challenges; identifying and implementing more aggressive poverty reduction measures, etc.” This was the priority Ms Victoria Kwakwa recommended Vietnam adopt in order to create a favourable business environment and sustainable development
Kim Phuong
Vietnamese
