Removing Bottlenecks in Improving Business Environment

4:18:13 PM | 12/7/2022

Son La province is carrying out many solutions to clear bottlenecks in administrative reform, competitiveness improvement and business environment so as to enhance its appeal to investors and adopt new growth models driven by economic quality, efficiency and competitiveness. Mr. Nguyen Minh Tien, Director of the Department of Planning and Investment, Son La province, gives an exclusive interview on this matter.

A leather and footwear enterprise in Son La province

Could you please introduce investment attraction and business development results in recent years?

In the past years, Son La province has attracted many domestic and foreign investors to explore investment opportunities and research tourism, agricultural and industrial projects. In 2021, despite being affected by the COVID-19 epidemic, its investment attraction produced remarkable results. The province licensed 30 projects with a total registered capital of VND4,950 billion, including Moc Chau high-tech biological diary farm complex, Doveco Son La Fruit and Vegetable Processing Center and SM Resort with strong ripple effects on local development. Following that success, in the first 10 months of 2022, the province approved six projects with VND2,389 billion of investment capital, including a VND2,000-billion high-tech milk processing factory with an annual output capacity of 200 million liters of milk.

Thus, the province attracted a total of 158 projects with VND5,613 billion by the end of 2022, with many having put into operation.

Regarding business development, in the first 10 months of 2022, the province had 229 new companies and witnessed 72 suspended companies to resume normal operations, bringing total enterprises in the province to 3,213 with a combined registered capital of over VND50,000 billion. Companies have significantly helped increase budgetary revenue and created jobs for local workers.

In 2021-2025, Son La province will strive to mobilize VND120 trillion for potentially advantageous industries, locations and regions. Would you mind telling more about this?

On April 2, 2021, Son La Provincial People's Committee announced Plan 94/KH-UBND on implementation of Resolution 07-NQ/TU dated January 21, 2021 of the Provincial Party Committee on investment attraction in Son La province in 2021 - 2025. Plan 94/KH-UBND is aimed to carry out the resolution effectively, make strong changes in perception and action of Party committees, authorities, enterprises and people in investment attraction in the province, hence encouraging enterprises to invest in potentially advantageous industries and fields that bring high added value.

In 2021 - 2025, Son La will mobilize VND120 trillion of investment capital. Specifically, non-state fund will be tripled the value in 2016 - 2020 and 50-60 projects will be licensed a year on average. By 2025, Moc Chau National Tourist Area will be recognized as a national tourist destination and become one of leading tourist resorts of the Northern Midlands and Mountains while the reservoir of Son La hydropower plant will be developed into a national tourist site. Son La province will also form eight high-tech agricultural parks, aiming to become a center of agricultural processing, a center of dairy, fruits and medicinal plants and a center of tourism of the Northwest.

In addition, the province will attract more investment capital into industrial parks to raise their occupancy rate to over 60% by 2025 and license a total investment capital of VND6.8 trillion. Son La will also have eight industrial complexes whose occupancy rate will reach over 70% by 2025. The province will set up supermarkets in district centers.

Son La will increasingly inform public employees, Party members, businesses and people of investment attraction policies. The province will take a drastic action to create a transparent, reliable and attractive investment environment to woo more investors; enhance the effect of international economic integration, accelerate economic restructuring and adopting new growth models by boosting economic quality, performance and competitiveness and creating a solid premise for stronger economic development in the coming time.

In addition to regularly reviewing, updating and supplementing the list of investment projects every year and in the 2021 - 2025 period, Son La province will actively introduce its investment portfolio, images and investment environment to investors and partners. The province will thus raise responsibility and accountability of investment licensing agencies and leaders of agencies engaged in construction, investment attraction, land acquisition and compensation, site clearance, resettlement and investment procedures.

What do you think about the Market Entry Index of the province in the past time? Why did it drop in 2021? What solutions and activities are currently being carried out by the Department of Planning and Investment to improve this score and ranking in the coming time?

In 2021, Son La province’s Provincial Competitiveness Index (PCI) scored 62.45 points to rise up nine places to rank No. 46 out of 63 provinces and cities. This was very instrumental for economic management to foster dynamism and is supported by the private sector. In his bright picture, the Market Entry Index, however, scored 6.17 points, down 2.14 points over 2020.

Most indicators of the Market Entry Index declined over 2020. Most indicators of the Market Entry Index declined over 2020. A high rate of enterprises said that they had to update and supplement their business registration documents from two times onwards. 27% of enterprises said that they had to cancel their business plans due to difficulties in carrying out procedures for conditional business (ranked 49th out of 63 provinces and cities). A high rate of companies said that they had to wait more than a month to complete all procedures to start official operations (ranked 62nd out of 63 provinces and cities).

In order to raise the Market Entry Index, the Department of Planning and Investment will continue to coordinate with other agencies and localities to review core indicators of poorly performed market entry cost for better performance in the coming time. Specifically, the business registration bureau needs to strengthen support and advise on online business registration procedures or via hotline, direct users to use business registration software through the National Business Registration System in order to reduce modification and rejection and slash startup costs for enterprises. The bureau also accepts delivery of business registration results via public postal services to reduce time and cost for companies, particularly those in far-lying areas.

All levels and branches of authority should step up review and control of administrative procedures and conditions in order to abolish unnecessary or inappropriate ones under their jurisdiction or propose competent agencies to eliminate them. For conditional business areas, it is necessary to publicize procedures on websites of the province and lead agencies and clearly guide processes for easy access by businesses. Each agency has a business consulting and supporting line to reduce time and cost for enterprises to start official business operations.

From 2019 to 2021, the Provincial People's Committee adopted methodologies and tools of the District and Department Competitiveness Index (DDCI); organized annual surveys into 1,300 companies, cooperatives and business households to learn about their satisfaction with local authorities. DDCI results have helped agencies and localities to find out their own strengths and weaknesses which then worked out specific plans for better performance in PCI Index and DDCI, thus helping public employees to change their perception and thinking, study relevant laws and understand every single indicator or component index to make workable action plans and programs for better business environment.

Strongly supporting SMEs
Son La province has seriously directed business development and improved the business investment climate for enterprises, especially SMEs. The Standing Board of the Provincial Party Committee approved the Project and Resolution on “Non-state business and cooperative development in Son La province to 2025. The Provincial People's Committee approved the “Project on Son La SME Support to 2025” (Decision 1530/QD-UBND dated July 28, 2022). The province targeted to accelerate administrative procedure reform and apply online public services of Level 3 and Level 4, aiming to achieve over 90% of public services of Level 4 delivered online by 2025 and facilitate market entry for enterprises; improve the investment and business environment to attract and support investors to actively join production and business development programs and projects; form the Innovation Startup Center; build an incubator or a co-working space to support innovation startups. 
By 2025, Son La province will strive to achieve the following goals: Having 300-350 new enterprises or more established each year; training 10,000 workers for enterprises; provide free accounting and tax software for newly established companies and startups; having all enterprises consulted, guided and supported in making electronic tax payment documents and procedures; and having all SMEs supported to raise awareness about digital transformation.

Thank you very much!

Thanh Loan (Vietnam Business Forum)