Removing policy bottlenecks to facilitate businesses

May 22, 2023 - 08:42
Thousands of business conditions and administrative procedures have been abolished or simplified, greatly facilitating businesses.
Many commented that the pace of institutional reform in some sectors and fields seems to be showing signs of slowing down. — VNA/VNS Photo

HÀ NỘI — The Government has stepped up the reform of administrative procedures, and cut business conditions and compliance costs for businesses in recent years. But the impact of the reform process has been always in question.

Thousands of business conditions and administrative procedures have been abolished or simplified, greatly facilitating businesses.

In particular, many commented that the pace of institutional reform in some sectors and fields seems to be showing signs of slowing down, affecting the post-pandemic recovery process.

The General Statistics Office under the Ministry of Planning and Investment reported that the whole country had 78,900 enterprises registered for new establishment and returned to operation in the first four months of this year, a year-on-year decline of 2 per cent.

However, up to 77,000 businesses withdrew from the market, up 25.1 per cent over the same period last year. On average, 19,200 businesses withdrew from the market a month.

Đậu Anh Tuấn, head of the Việt Nam Chamber of Commerce and Industry (VCCI)'s Legal Department, said that Việt Nam's investment environment has not yet had a strong breakthrough in terms of conditional business management mechanism, still heavy on pre-checking mechanisms and less connected in administrative procedures.

“Market risk may be unavoidable, but how not to let businesses bear policy risk. I think that behind the number of businesses leaving the market, besides those businesses that no longer have business opportunities, there are also many businesses that leave due to changes in the law and mechanisms which are no longer suitable. This means the root cause must be found," said Tuấn.

The 2022 business flow report published by VCCI in April, which synthesised opinions from many businesses and business associations, showed that following the Government's directions on administrative procedure reform, State management agencies have focussed on formulating and promulgating plans to reduce and simplify regulations related to business activities within the scope of management functions of each ministry, branch, and decentralisation plans in handling administrative procedures under the management of ministerial-level agencies.

In addition, ministries have also presided over drafting, promulgating or submitting documents to competent agencies for promulgation.

Specifically, the approved reduction and simplification options last year basically focused on issues that are not new, mainly just abolishing the documents in the file that the licensing agency has or can look up in the information data system of State agencies; while supplementing the electronic method in handling administrative procedures.

Some procedures will be carried out at level-4 public services. Some others will be carried out by the electronic method.

Nguyễn Thị Diệu Hồng, a member of the report research group, assessed that, although ministries and branches show a quite positive spirit of reform, many contents were still not substantial.

The reform proposals were not aimed at creating real facilitation for businesses in the process of implementing administrative procedures, she added.

Summarised opinions from businesses showed that reform proposals of some ministries and sectors are not "strong enough".

Not to mention, quite a lot of regulations are still inadequate and confusing, which causes difficulties for businesses.

There is even an absence of regulations in the proposals made by ministries and sectors.

Because of this, businesses always question the substantiality of activities in reducing and simplifying administrative procedures and business conditions.

Reflecting on the current situation, Trần Đức Nghĩa, General Director of Delta International JSC, said that connecting the electronic port system and electronic customs has helped businesses eliminate the customs procedure for liquidation of declarations.

Just eliminating this one procedure has helped businesses save up to US$500 million per year compared to doing normal paperwork, he noted. However, at Delta, if specialised inspections are done at the highest level, businesses could save up to 10 per cent in costs thanks to reduced manpower.

Although the stability of business law is very important, especially for investment projects, when reality changes, business laws need to be regularly adjusted in time, or when inadequacies and problems are discovered during the implementation process.

Therefore, delaying the adjustment to improve the business investment environment, especially the issue of administrative procedure reform, is necessary to assess the effectiveness and propose solutions.

The most important thing is to find a balance to maintain stability and create business confidence, along with timely adjustments to make policies more consistent with reality. — VNS