On the occasion of the Vietnam Business Forum 2006, Vietnam Business Forum Magazine introduced extracts of the presentation of Dr. Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI), which represents for the Vietnamese business community.
2006 is the year of especially significant events for the business communities in Vietnam: Vietnam accession to WTO, successful organization of APEC, approval of US Senate of PNTR for Vietnam. Never before has the name Vietnam been mentioned as much on world media as this year. And never has Vietnam been the destination of as many great groups, business communities and international investors as this year (10 per cent of Top 500 in Fortune Magazine have arrived in Vietnam). In 2006, direct foreign investments in Vietnam reach the record to date with improved quality. This year, The Law on Enterprises and the Law on Investment become effective. 2006 sees a step forward of improvement of relations with strategic partners. Business environment in Vietnam has been improved in line with common world standards. Many localities have made efforts to reform administration creating favourable conditions for corporate operations.
However, beside the positive points, following aspects are reflected by local business communities through VCCI surveys:
- Informal expenses in transactional relations of enterprises remain high: 69.19 per cent enterprises (of 6,379 enterprises responded to surveys) were of opinion that payment to informal expenses is common. 74 per cent enterprises gave assessment that the payment to informal expenses is very difficult or difficult for corporate business operations. 62.21 per cent enterprises indicated that negotiations were constantly done with tax agencies on the tax items to be paid.
- Access to land remains very difficult for most Vietnamese private enterprises, especially the SAMEs. The need of enterprises to access land is currently great: 62.81 per cent enterprises from VCCI surveys were opinion that their business will expand if land access is easier. 72 per cent enterprises stated that the stability of business ground is low, or very low. Land pricing mechanism is not yet appropriate with many formalities remaining complicated and costly.
- Legal systems in Vietnam have not yet well supported corporate business and operation. 89 per cent enterprises survey chose "Self negotiations and arrangement" as the first way to solve disputes without bringing them to courts. Quite a few enterprises do not believe in the quality of solutions provided by the current system of judicial organization to disputes. 28 per cent enterprises (have brought cases to courts) stated that courts did not solve fairly their disputes. 26 per cent enterprises could not have their sentences served.
- Business licenses and regulation relating to business in Vietnam are regarded as being still troublesome. Recently, VCCI has tried reviewing 37 types of business licenses in some industries. Results show that 100 per cent licenses are evaluated as having conditions for being licensed, or being not transparent or insignificant. 89 per cent licenses reviewed are problematic regarding licenses issuing procedures. To obtain all necessary licenses, VCCI surveys showed that 17.86 per cent enterprises had to spend from 30 to 90 days.
From this fact, VCCI proposes the State to implement following groups of great measures:
1- Implement more resolutely administration reforms; be simple and transparent in procedures; remove unnecessary business licenses; cut down business expenses for enterprises.
2- Renovate land management mechanism, apply market price mechanism for land transactions; create favourable conditions for enterprises, especially the SAMEs, to access land more easily.
3- Raise operating efficiencies of judicial system (courts, agencies of control, organizations implementing court sentences...) to meet the demands of enterprises in up-coming integration.
Though there remain a lot to be done, business and investment environment in Vietnam has never been facing favourable opportunities as now. Positive signal from local and foreign business communities have confirmed this. Result of the surveys conducted by VCCI in 2006 of 6,379 private enterprises showed that 75.72 per cent enterprises plan and intend to expand their business scale in two years to come.
We hope that these positive signals will become practical results.
P.V
Vietnamese
