VN business climate improves

Wednesday, Jun 20, 2018 08:33

Phan Duc Hieu, deputy head of the Central Institute for Economic Management makes a speech at the forum. — Photo

The business environment in Viet Nam has improved significantly this year and, as a result, the belief in the future of doing business and the desire to participate in the market is strengthened. This is clearly demonstrated by the increased number of newly registered enterprises.

The statement was made by Dau Anh Tuan, head of the Viet Nam Chamber of Commerce and Industry (VCCI)’s Legal Department at the 2018 Viet Nam Business Development Forum held in Ha Noi on Tuesday.

In the first five months of this year, the economy registered 52,322 new businesses, a year-on-year increase of 3.5 per cent. The figure for 2017 was 127,000, compared to more than 110,000 in 2016.

In fact, many businesses reported that the working attitude of staff members at authorised agencies has become friendlier and more enthusiastic, while informal expenses dropped from 66 per cent to 59 per cent in 2017.

A number of business conditions, specialised inspections and unreasonable regulations have been reviewed and abolished by the regulators to provide practical support and facilitation to enterprises.

Tuan pointed out several problems that need prompt action, one of which was the shrinking average size of private enterprises coupled with their weak competitiveness amidst integration and rising competition.

He cited experts’ assessment that the ‘health’ of private enterprises in general has not shown any remarkable improvement.

"The private sector also lags behind other economic sectors in terms of participation in national export activities and export performance," Tuan said.

He added that private enterprises still face many unfavourable business conditions, for example stricter requirements on workshop areas, specialised equipment, management personnel and capital in some fields than those applied to foreign-invested counterparts.

With regard to the Vietnamese business picture, Tran Thi Hong Minh, general director of the Agency for Business Registration under the Ministry of Planning and Investment, said that the business registration process had been shortened to 12 working days in 2017, down 12 days compared to 2016.

Up to now, the average time for provinces to issue business registrations averages 2.36 working days (the regulation is three days), and 40 provinces complete the procedures in just two days.

According to Phan Duc Hieu, deputy head of the Central Institute for Economic Management (CIEM), developing the private sector in terms of quantity and quality is an important driving force in economic development.

Last year, Viet Nam’s competitiveness index also rose five places to 55 out of 137 on the World Economic Forum’s ranking; the business environment increased 14 levels (increasing from 82 out of 190 economies to 68); innovation rose 12 levels, reaching the rank of 47 out of 127 economies. In addition, the tax payment index has increased significantly to 86 out of 190 economies, up 81 places compared to 2016.

Although these indicators increased sharply in the past few years, the reality showed that the results of reform measures have not been as expected. Enterprises have not benefited much from support and services from the authorities.

"The solution is not only improving the quality of the business environment, but also creating breakthroughs, towards practical goals and supporting businesses," Hieu said.

This requires determination and persistence from the executive level, the Government to local government, ministries and agencies in a harmonised way, he suggested. — VNS

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