For the fifth consecutive year, the northern province of Quang Ninh leads in provincial competitiveness among all 63 provinces and cities, according to the provincial competitiveness index (PCI) ranking announced by the Viet Nam Chamber of Commerce and Industry (VCCI) and the US Agency for International Development (USAID) yesterday.

With a score of 73.02, Quang Ninh maintained its top position for the fifth straight year with excellent economic management quality and a favourable and friendly business environment.

Meanwhile, Hai Phong stood in second place for the first time, with a score of 70.61, 1.34 higher than the previous year. Dong Thap was in third with a score of 70.53, followed by Da Nang (70.42 points) and Vinh Phuc (69.69 point).

The remaining positions in the Top 10 PCI 2021 were Binh Duong (69.61 points); Bac Ninh (69.45); Thua Thien Hue (69.24); Ba Ria - Vung Tau (69.03) and Ha Noi (68.6).

These localities were highly appreciated by the business community in the indices of cutting administrative procedures, reducing the burden of complying with conditional business licensing procedures and solving difficulties for businesses.

Compared to PCI 2020, two other centrally-run cities, HCM City and Can Tho, were not in the Top 10. Can Tho ranked 12th with a score of 68.06, while HCM City stood in 14th place with a score of 67.5.

Five localities at the bottom of the PCI 2021 rankings were Ha Giang, Kien Giang, Kon Tum, Hoa Binh and Cao Bang.

According to VCCI, the PCI 2021 report was carried out amid difficulties due to the COVID-19 pandemic, but the enterprises still assessed that the quality of provincial economic management in Viet Nam continued to improve.

The report also noted that the business environment in Viet Nam has shown positive changes. Local authorities have continued to promote proactivity and support for the private sector. Informal charges have continued to decline in many areas.

However, compliance with conditional business licensing procedures has remained burdensome, said Dau Anh Tuan, director of the Provincial Competitiveness Index Programme, and Director General of the Legal Department, VCCI.

“Efficiency of administrative procedures improved, but more reform efforts are still needed,” Tuan said.

Besides that, information and dissemination of guidance to firms about international economic integration remain weak, according to the report.

With FDI enterprises, they also recorded positive improvements in Viet Nam's business environment. These enterprises said that inspection activities and informal costs have been reduced. Labour quality and infrastructure have been improved.

But, to maintain attractiveness to foreign investors, local authorities need to further reform administrative procedures in tax, import and export, investment registration and social insurance. Viet Nam also needs to create more favourable conditions for foreign direct investment (FDI) enterprises in carrying out procedures for implementing investment projects, especially construction permits and environmental impact assessments.

For the challenges of the COVID-19 pandemic that businesses are facing, the VCCI representative said that supportive policies for the businesses in recovery and development after the pandemic need to be designed according to the needs and development capabilities of each group of businesses.

Pham Tan Cong, VCCI chairman, said that PCI 2021 is the 17th consecutive edition of the index. PCI 2021 was built based on feedback from 11,312 businesses, including 10,127 private enterprises in 63 provinces and cities and 1,185 foreign-invested enterprises operating in 22 localities.

PCI measures the ease of doing business for the private sector in the areas of entry cost for new firms, land access, transparency, time costs of regulatory compliance, informal charges, proactivity of provincial leadership, policy bias, business support services, labour training and legal institutions.

PCI methodology is periodically recalibrated every four years to reflect changes in the business and regulatory environment as well as developments in the business community in Viet Nam. VNS