VCCI Strengthening Cooperation for Better Investment and Business Environment in Vietnam

9:19:01 AM | 12/29/2021

The investment and business environment in Vietnam has improved significantly in recent years. According to international organizations, the business environment has become safer and fairer among all economic sectors; administrative procedures have been streamlined and informal costs have tended to decrease. VCCI plays a big role in this progress.

PCI - Measure of reform

One of VCCI’s great successes in the past term is the coordination with the United States Agency for International Development (USAID) to conduct surveys and release the Provincial Competitiveness Index (PCI) in 16 consecutive years since 2005.

The latest edition of PCI 2020 not only conveys the voice of the business community on movements of the domestic business environment in the 2016-2020 period but also positions Vietnam's appeal to investors and reflects the business community's expectations for reform efforts of all-tier authorities in the next five years.

In fact, PCI reports have conveyed important messages from the business community to authorities at all levels in Vietnam for the need to enhance governance quality and reform administrative procedures and create a more favorable business environment for enterprises. Much of progress has been witnessed in Vietnam. Administrative procedure reform is now the most important task in most localities. From a small community with a modest position, the number of private enterprises has increased rapidly towards 1 million soon. After being globally ranked low, Vietnam's ease of doing business ranking has been increasingly advanced, aiming to enter Top 4 in ASEAN countries in business facilitation. PCI has enabled this important transition in Vietnam.

However, what PCI is most liked is that it has empowered businesses to voice their thinking, establish a channel to fully convey their difficulties to relevant authorities and actively make changes. Local governments now have enough information and quantitative evidence to identify and direct their reform programs to the right focus and close to actual requirements. Evidence-based policymaking and reform programs, also based on quantitative information, are gradually becoming a habit of many local government agencies in Vietnam.

From PCI, many reform models and success lessons have been found and replicated nationwide. The Entrepreneur Café Talks, a semi-formal business meeting dialogue model, was initiated in Dong Thap and has scaled to more than 40 provinces and cities across the country. The District and Department Competitiveness Index (DDCI), a localized version of PCI, was strongly pioneered by Quang Ninh province and has now been applied in nearly 50 other provinces and cities. All are aimed at listening to the voice of the business and solving real problems.

Not only making PCI reports, VCCI also develops analysis and evaluation reports to send to provinces and cities separately on business environment as well as analyze main PCI features of some localities including Soc Trang, Kien Giang, Ca Mau, Bac Lieu, Hau Giang and Can Tho. VCCI also consults on DDCI application for provinces and cities.

Improving business environment and business development

Improving business environment and business development is one of the government's policy focuses in recent years. Debuted eight years ago, the government annually issues a resolution on key tasks and solutions for better business environment and stronger national competitiveness (Resolution No. 19/NQ-CP) in 2014, 2015, 2016, 2017 and 2018 and Resolution No. 02/NQ-CP in 2019, 2020 and 2021). This series of resolutions focuses on very important contents such as slashing business investment conditions, streamlining specialized inspection of goods, simplifying business administrative procedures, and enhancing information technology application in administration. The government also issued Resolution No. 35/NQ-CP in 2016, setting out important principles and goals for private business development in Vietnam in five straight years from 2016 to 2020 and beyond.

Carrying out its action plans for implementation of Resolution 02/NQ-CP, in the past year, VCCI held a seminar to announce the Report on “Vietnam Business Environment Reform Program - From Business Perspectives”. This is one of VCCI’s initiatives to strengthen the voice, promote the active role of the business community to side with the government for a better business environment, stronger national competitiveness and more robust private sector development in Vietnam. The report illustrates the degree of change of the business environment in Vietnam as perceived by businesses in 2020 and the past five years and puts forth recommendations and solutions for the upcoming period towards the goals of private economic development and national competitiveness improvement.

Furthermore, VCCI will continue to collect recommendations for solving business difficulties and obstacles in the spirit of Resolution 35/NQ-CP of the Government. As many as 158 recommendations of businesses and associations were collected and classified by VCCI and sent to relevant agencies in the year to November 30, 2021. Up to now, competent authorities have handled, resolved and answered nearly 50% of petitions, most of which suggested business support solutions to remove difficulties caused by the Covid-19 pandemic as well as recommendations on administrative procedures on tax, customs and construction. VCCI also inspected and surveyed 600 businesses and trade associations on quality of recommendations put forth by central and local agencies. Accordingly, only 26.4% of respondents were very satisfied while 73.6% were not satisfied, much higher than 48.9% in 2020 and 50% in 2019. The survey reflected what actually happened in 2021 when they faced numerous difficulties caused by the epidemic but government supports and solutions were very slow.

With a new vision of “Strong business, prosperous nation” with the mission of connecting and boosting sustainable business and association development, VCCI will have appropriate methods and actions and cooperate more closely with relevant agencies and organizations to strongly foster reforms and bolster the business and investment environment in Vietnam.

By Quynh Chi, Vietnam Business Forum