HA NOI — The northern mountainous province of Lao Cai has dislodged central Da Nang City to top the country's Provincial Competiveness Index (PCI) in 2011.
In the PCI, announced by the Viet Nam Chamber of Commerce and Industry yesterday, Lao Cai scored 73.53 points, followed by Bac Ninh with 67.27 points.
The high rankings were attributable to heavy investment in governance improvement, especially in Lao Cai, with strong improvements in entry costs, transparency, time taken for complying with regulations, informal charges and the pro-activity of the provincial leadership, said Dau Anh Tuan from the PCI research team.
Surprisingly, central Ha Tinh and southern Binh Phuoc, were ranked in the top 10 after the creation of local legislation and task forces aimed at improving their PCI scores, Tuan said.
For the first time in the history of the PCI, neither Da Nang nor Binh Duong reached the top position.
Da Nang, despite topping the PCI over three consecutive years from 2008 to 2010, fell to the fifth place due to a decline in business support services and labour policies, Tuan explained.
Meanwhile, Binh Duong dropped to the tenth place after being the PCI champion from 2005 to 2007 as it experienced slumps in pro-activity as well as land and business support services, he said.
The country's two biggest economic hubs, Ha Noi and HCM City, broke through consecutive relegations, the capital city jumping by six places to the 36th while HCM City moved up three notches to the 20th place.
The seventh annual PCI was based on a survey of 7,000 domestic firms that contributed opinions on nine aspects of governance across the entire country. Those aspects comprised of entry costs, land access and security of tenure, transparency and access to information, time taken for complying with regulations, informal charges, pro-activity of the provincial leadership, business support services, labour and training – and legal institutions.
Overall, the past year showed a slight improvement in provincial governance. However, the inability of provincial land compensation prices to keep up with market prices and massive declines in the assessment of pro-activity and the attitude of local leaders toward private business and more limited use and satisfaction with the supply and quality of business support services remained problematic, Tuan said.
"The Provincial Competitiveness Index is an important channel for the business community to communicate with local authorities on economic governance performance in provinces and major cities," said US Agency for International Development (USAID) Mission Director Francis Donovan.
"For the past seven years, the PCI has given provinces a great opportunity to see where they can improve provincial competitiveness and growth," he said.
In the context of economic difficulties, positive business perceptions about provincial governance was a bright signal in the 2011 PCI report, said Viet Nam Chamber of Commerce and Industry chairman Vu Tien Loc.
"We hope that from this message sent by the business community, the central and local governments will continue efforts to improve the business climate and enhance the competitiveness of Viet Nam's economy," Loc said.
The view of nearly 2,000 foreign-invested enterprises was also included to provide time to give insights into the existing foreign direct investment footprint in Viet Nam.— VNS