Provincial Competitiveness Index of Business Environment Announced

Provincial Competitiveness Index of Business Environment Announced  

The Vietnam Chamber of Commerce and Industry (VCCI) co-operated with the Vietnam Competitiveness Initiative Project (VNCI) to develop and announce provincial competitiveness index (PCI) of the business environment in Vietnam in Hanoi on May 26.

Accordingly, PCI was surveyed in 42 provinces and cities, accounting for 89 per cent of Vietnam’s GDP. Experts said that PCI had been developed based on surveys and existing data. VCCI sent 16,200 questionnaires to surveyed enterprises. Furthermore, other information from surveys made by the General Statistic Office, business associations and banks was used. Based on nine groups of indexes developed by the study group, including costs for market participation, land and area for business, transparency, costs and time to observe the State’s regulations, unofficial costs, the observation of central agencies’ regulations, priorities given to State-owned enterprises, dynamism and development policies of the private sectors, to develop the final competitiveness index.

Tran Huu Huynh, head of the Legal Department of VCCI, which has implemented the study, said that PCI aimed at evaluating the operation of provinces and cities. It was not a result of their development. Therefore, some underdeveloped provinces, despite their inconvenient geographic, infrastructure and human resources conditions, have a high PCI as enterprises highly appreciated their authorities for their efforts in improving their operation. PCI was developed based on an important factor, that is, local private enterprises’ satisfaction, Huynh said.

According to announced results, Binh Duong has the highest PCI. The province is closely followed by Da Nang, Vinh Long, Ben Tre, Vinh Phuc, Dong Nai and Quang Ninh. Huynh said that more importantly the Vietnamese enterprises’ community would benefit from increased reform of provinces and cities to create a more open and favourable business environment.

Benefits of the evaluation of PCI are clear but some questions about the framework and the implementation of PCI for unique guidelines of central agencies on the socio-economic development of the country would be asked.

A possible question is whether the State will react to announced PCI and whether authorities in provinces and cities with high PCI will be awarded and vice versa. This is because provinces and cities have the same administrative level but their work results are much different. Authorities of provinces and cities, of course, will have to explain this to the public. Possibly, part of work of authorities in provinces and cities is being evaluated. The openness and transparency of the integration period may be seen.

No one is better placed to respond to these questions than enterprises owners, who should be the first people to respond to the activities of the PCI study group. Ironically, only 13 per cent of surveyed enterprises replied to questionnaires. Do enterprises want to keep the outdated customs, let alone local authorities?

• P.V