State management must be revamped

Wednesday, Jan 16, 2019 08:43

A VCCI report points out that State management agencies are still unsure of how to manage new business models like Grab. — Photo

The Vietnamese Government has hastened reforms but more renovations in State management are needed to facilitate businesses and effectively manage new business models, Chairman of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc said.

Loc said at VCCI’s conference reviewing business regulations on Tuesday that many reforms were still not efficient and outdated thinking cast a shadow on the development of new business models.

Hesitation remained in the resolution of core issues such as land ownership rights, intellectual property, contract enforcement and accountability, he said.

“Building a safe and advantageous business climate remains a difficult process,” Loc said, adding that the biggest bottleneck was the overlap and lack of transparency in the business law system.

Loc said that VCCI would submit a proposal of amendments to unreasonable business regulations to the National Assembly and the Government every six months.

Viet Nam faces with a wave of technological development in which new business models would appear, Loc said, adding that policy-makers responses are critical to promoting development.

VCCI’s report about business regulations also pointed out shortcomings in policy responses to new business models like ride-hailing service Grab and rental service Airbnb.

Dau Anh Tuan, head of the VCCI’s Legal Department, said that the emergence and rapid expansion of new business models using technology was causing serious conflicts, requiring State management agencies to develop proper management mechanisms for such business models.

"State management agencies seem to have not figured out proper management mechanisms," Tuan said, adding that this could present a challenge to economic development.

For example, regarding transportation platforms like Grab, despite many discussions, no specific management mechanisms had been suggested for this business model. For Airbnb, the management agencies had been quiet.

Tuan said that reviewing business regulations should be conducted regularly and, in the process, it was necessary to consult individuals and firms affected.

The Vietnamese Government focused on removing barriers for businesses and promoting the development of the private economic sector in 2018. However, the simplification and removal of business prerequisites and inspection procedures for customs clearance was inefficient, Tuan said.

Many ministries and local authorities were not proactive and carried out reforms ineffectively, just to cope with pressure from the central Government, he stressed.

Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management, said that the legal system should not only focus on removing business barriers but also promoting development.

Hieu said that the biggest challenge to the current reform effort in Viet Nam was the lack of impetus among local-level management agencies.

The pressure for reform mainly came from the central Government, Hieu said, adding that few ministries and local authorities were active in carrying out reforms.

He pointed out another challenge was the lack of control over quality of new legal documents about the business environment.

Firms were still in a matrix of legal documents and it was necessary to inform them about changes in policy, Hieu said.

According to the VCCI’s report, the central-level State management agencies in 2018 issued 948 legal documents, including 16 laws, 18 National Assembly resolutions, one National Assembly Standing Committee order, 169 Government decrees, 51 Prime Minister’s decisions, 590 circular of ministries and 47 others. — VNS

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