Proactivity of Local Governments Highly Appreciated: PCI Report 2021

11:02:02 AM | 4/27/2022

On the morning of April 27, the Vietnam Chamber of Commerce and Industry (VCCI) and the U.S. Agency for International Development (USAID) announced the Annual Report of the Provincial Competitiveness Index (PCI) 2021.

The PCI 2021 report is based on feedback from 11,312 businesses including 10,127 private enterprises operating in 63 provinces/cities and 1,185 foreign-invested enterprises operating in 22 provinces/cities.

According to the report, Quang Ninh leads PCI 2021 with a score of 73.02. This is the 5th year in a row that Quang Ninh ranks first in the Provincial Competitiveness Index.

“In 2021, Quang Ninh has reduced the time to handle administrative procedures by 40-50% compared to the regulations. The province's number of level 4 online public services is 1,387, equivalent to 75% of the province's online public services. This rate is significantly higher than the national average of 48%,” said the VCCI report.

In addition, Quang Ninh also ranked first in the country in two sub-indexes: market entry costs (7.98 points) and time costs (8.52 points).

The runners up in the PCI rankings include Hai Phong (70.61 points); Dong Thap (70.53 points); Da Nang (70.42 points); Vinh Phuc (69.69 points); Binh Duong (69.61 points); Bac Ninh (69.45 points); Thua Thien Hue (69.24 points); Ba Ria - Vung Tau (69.03 points); Hanoi (68.6 points).

The survey shows that in 2021, government proactivity has the best results ever. Specifically, 85.6% of businesses found that local governments apply the law flexibly to create a favorable business environment; 62% of businesses said that the provincial governments have a positive attitude toward production and business activities in the private sector.

According to the PCI report, some areas of administrative procedures are assessed to be more troublesome than in 2020. 29% of businesses said that they complained about tax and fee procedures; 28.9% complained about land procedures.

The 2021 Provincial Competitiveness Index is the 17th edition of its kind, measuring the quality of economic governance in Vietnam’s 63 provinces. The PCI sums the weighted aggregate scores of the ten sub-indices on a 100-point scale, quantifying private firms’ perceptions of local economic governance in ten governance areas influencing private sector development. The PCI’s ten indices include: 1) market entry costs; 2) land access and security of tenure; 3) transparency; 4) time costs; 5) informal charges; 6) policy bias; 7) proactivity; 8) business support services; 9) labor policy; and 10) law and order.

The PCI does much more than merely rank provincial economic governance. It motivates the acceleration of reforms at the provincial level, providing an effective channel for dialogue
that bridges the goals of authorities with the experiences of hundreds of thousands of private firms.

By Vietnam Business Forum