Da Nang Continues to Top PCI 2010

This information was released by Mr Tran Huu Huynh, Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), at the launch of the Provincial Competitiveness Index 2010 in Hanoi. This report was carried out by VCCI, the United States Agency for International Development (USAID), and the Vietnam Competitiveness Initiative (VNCI) Project.

 

Mr Tran Van Minh, Chairman of the Da Nang People’s Committee, said: since 2005, the PCI is also a useful reference for provincial/municipal authorities, including Da Nang, to assess their socio-economic governance, particularly in respect of policy making, enhancing investment - business enabling environment. The PCI is also a useful information channel for businesses to decide on investment locations or weigh their plans for production and business expansion to achieve the desired effect. The PCI, therefore, recently has contributed to promoting Da Nang as a destination for many foreign and domestic investors.

 

Remarkably, the southern province of Binh Duong, after 3 years at the first rank and 3 years being present in the top 3, for the first time fell to the fifth place with a drop of 8.28 points. This is the first time since the inaugural PCI in 2005 Binh Duong was out of the “very good” group. Apart from high groups of heavy weights like dynamism of provincial authorities, transparency and labour training, Binh Duong province also saw a drop in market penetration and business support indexes.

 

The Mekong Delta continues to show steady and consistent improvement across the region. Including Can Tho and Long An, the delta region accounted for 9 of the 22 provinces and cities ranked in the Excellent and High Tiers on PCI 2010.

 

“The PCI is a useful tool to assess the ease of doing business, economic governance, and administrative reform efforts by local governments of provinces and cities in Vietnam, in order to promote the development of the private sector. There are several good examples of reform initiative this year that one province could learn from others,” said Dr Vu Tien Loc, President of VCCI.

 

According to Mr Huynh, the PCI 2010 report includes responses from 7,300 private businesses. This index is based on nine operating areas, including market access, land access, transparency, time costs, the cost of informal expenses, flexibility, business support services, labor training and legal institution.

 

According to the PCI 2010 survey, enterprises indicate notable improvements in labor training and business support services, but declines in business entry costs, access to land, legal institutions, transparency, and time costs reveal increased compliance burdens on the private sector. Specially, according to Mr Huynh, electricity is critical. On average, each company suffered a blackout of 89 hours in 2010 from 50 hours in 2009. 41 percent of enterprises suffered blackout without prior notice.

Notably, for the first time, the VCCI and the USAID/VNCI surveyed 1,155 foreign invested enterprises from 47 different countries whose operations are located nationwide. The results provide valuable insights into the existing foreign direct investment footprint in Vietnam and the challenges of attracting higher value-added investment to sustain economic growth.

 

“The 2010 PCI survey suggests that as Vietnam explores strategies to move to the next stage of development, the country could look to ways to attract higher quality investment to increase productivity and prosperity. This will require improved economic governance and regulation that reduces the costs and risks to investors doing business in Vietnam,” said Mr Francis Donovan, Director of the United States Agency for International Development in Vietnam.