10:26:51 AM | 31/1/2013
In recent years, investment attraction in Son La province has achieved many positive results as the business environment gets better and the provincial competitiveness index (PCI) is improved. To learn more about this, the Vietnam Business Forum has an interview with Mr Nguyen Ba Tuc, Director of Department of Planning and Investment of Son La province. Duy Binh reports.
What is your opinion about the health of businesses in the province? Could you tell about business support mechanisms and policies Son La province has applied in the past years?
As of December 20, 2012, Son La province had 1,408 enterprises registered for operation under the Law on Enterprises, including 1,390 private companies, 10 State-owned enterprises (SOEs), and eight foreign-invested firms. The province also had 444 representative offices and branches.
Last year, local businesses basically maintained their operations. According to the report released by the Son La Taxation Department, as of December 22, all companies fulfil their tax obligations. As many as 956 enterprises paid taxes on time, totalling VND1,251 billion, accounting for 83.3 per cent of total tax payables; 774 companies owed taxes or granted grace period with a total value of VND237 billion, accounting for 15.7 per cent of total tax payable; and 59 firms suspended their operations, accounting for 3.3 per cent of companies with tax payment declaration.
The ratio of companies to people is as low as at 1.3 to 1,000. Only a small number of companies invest for production while a majority focus on infrastructure construction.
To facilitate businesses to develop, Son La has seriously implemented policies on preferential areas and fields as stipulated in the Law on Investment 2005 and the Decree No. 108/2006/ND-CP of the Government dated September 22, 2006. In addition, the province has issued a number of business support and development mechanisms and policies such as cattle husbandry development support policy in 2009 - 2015 period; rubber tree development policy, small and medium-sized enterprise development plan in 2011-2015, action programme for implementation of Resolution No. 09-NQ/TW dated December 9, 2011 of the Politburo on building and promoting the role of Vietnamese entrepreneurs in the period of accelerated industrialisation, modernisation and international integration.
In addition to publicity and transparency of socioeconomic development planning, sector development planning, locality development planning, mechanisms and policies, we promote public administration reform to make administrative procedures easier for enterprises in the province. We seriously apply the "Single-window” mechanism, publicise investment procedures and “Single-window” mechanism at the Department of Planning and Investment. We unify company code with a tax code and shorten the time for business registration to five days from previously seven days.
Mobilising all available resources for economic restructuring towards sustainable development is becoming increasingly urgent. What has the Department of Planning and Investment proposed and advised the Provincial People’s Committee to do in pursuing this?
To mobilise most resources for the process of economic restructuring driven towards sustainable development, the Department of Planning and Investment has advised the governing Provincial People’s Committee to focus on two key tasks: Investment restructuring, focusing on public investment, and business restructuring, focusing on SOE restructuring.
Regarding public investment restructuring
The province will concentrate on settling debts rested in basic construction in accordance with the Prime Minister’s Directive 27/CT-TTg dated October 10, 2012 on primary solutions to clear debts in basic construction in localities. Son La will review medium and long-term programmes and projects and list of ongoing projects, including approved but capital-short ones, to classify for focused investment.
In the capital plan in 2013, the province will concentrate on repayment of loans, mature advance capital, counterpart capital for ODA projects and will allocate apart of capital for key projects and programmes. It will crack down on debt settlement to ensure capital plan in 2013 in a bid to handle at least 30 per cent of total debt amount to play the stepping stone for finishing debts in basic construction in 2015. It will only finance vital projects after paying all debts and balancing capital sources.
Son La will focus investment capital on essential socioeconomic infrastructure for agriculture, countryside development, administrative office construction for communes, roads for access to communal administrative offices, science - technology, education - training, health, social security, environment, and national defence and security. The province will allocate capital to boost investing efficiency in the spirit of the Prime Minister’s Directive 1792/CT-TTg dated October 15, 2011 on strengthened management of investment funded by the State Budget and Government bonds.
The province will continue decentralising some fund sources to district governments while strengthening inspection and supervision to ensure the compliance of investment projects and capital sources. The province will enhance the role and responsibility of stakeholders in national target programmes. Investors will improve quality, intensify management over project quality, and accelerate the project progress to bring projects into operation to promote investment efficiency.
The province will continue mobilising investment sources from all economic sectors in the country and attract foreign investment sources (ODA, FDI, NGO).
Regarding SOE restructuring
Poor-performing SOEs will be reshuffled and worked with Debt and Assets Trading Corporation in order to restructure liabilities and boost up corporate financial conditions to go public.
Partially privatised companies will have State owned equity reduced. The State will withdraw all equity from normal businesses.
SOEs transformed into one-member limited liability companies will be further considered to be converted into joint stock companies.
Long-time loss-making SOEs will be allowed to file for bankruptcy.
On the 2011 Provincial Competitiveness Index (PCI), Son La province ranked 52nd out of 63 provinces and cities. What do you think about this result? What should Son La province do immediately to improve the investment environment?
PCI is announced by the Vietnam Chamber of Commerce and Industry (VCCI). This is the true and very objective gauge of overall economic, technical, cultural and social infrastructure assessment of provincial governance in support of the private sector.
To increase its PCI ranking, Son La province is determined to further enhance the quality of economic governance, improve the investment environment, sharpen competitiveness, and promote sustainable social and economic development. In my opinion, Son La needs to do the following things immediately.
To edge up competitiveness and create a favourable business environment, not only the Department of Planning and Investment but also other organs and localities must make effort.
The province will step up administrative procedure reform, boost up information transparency for enterprises, and quicken settlement of administrative procedures relating to business affairs such as business registration procedures and investment certification procedures.
The province will ease up land access, ensure long-term land lease, increase legal institutional index concerning settling disputes in economic contract enforcement among enterprises, and land claims.
The province will also promote human resource training, raise labour training index and enhance human resource training quality.
The province stands side by side with businesses, honours outperforming businesses, organises regular meetings between State agencies and businesses. Son La flexibly and creatively solves difficulties against businesses. It regularly hosts dialogues with businesses to listen to their standpoints to have timely resolution.