Gov’t wants better business climate

May, 19/2016 - 07:00

Ministries and sectors, along with local authorities, must promote their roles and coordination to help improve the domestic business environment and enhance national competitiveness, in accordance with a Government resolution.

A workshop of B.Braun Việt Nam Limited Company- a pharmacy products and healthcare equipment producer in Thanh Oai Industrial Complex, Hà Nội’s Thanh Oai District. Ministries and localities have been urged to make more efforts to improve the business climate in Việt Nam. – VNA/VNS Photo Danh Lam
Viet Nam News

HÀ NỘI — Ministries and sectors, along with local authorities, must promote their roles and coordination to help improve the domestic business environment and enhance national competitiveness, in accordance with a Government resolution.

Nguyễn Đình Cung, Director of the Central Institute for Economic Management (CIEM), made the announcement during a conference in Hà Nội yesterday as he discussed the implementation of Resolution No 19-2016/NQ-CP signed by Prime Minister Nguyễn Xuân Phúc late last month.

For the third year in a row, the Government asked ministers and chairpersons of provincial and municipal people’s committees to build action plans to improve the country’s business environment and competitiveness, by May 30.

The resolution stated that the business community has acknowledged the efforts of Việt Nam in creating a better business environment over the last two years, yet many ministries and local authorities remained inactive as to joining in the efforts.

“Heads of some ministries, agencies and localities do not pay adequate attention to the implementation of Resolution No 19, treating it as a movement or campaign rather than a specific task or a must-do,” it said.

The World Economic Forum (WEF) said in its Global Competitive Report 2015-2016 last September that Việt Nam’s competitiveness for 2015 has significantly been improved compared to 2014, as it jumped 12 ranks from 68/144 to 56/140 of global economies.

Regarding the business environment, Việt Nam last year jumped three ranks from 93/189 to 90/189 of global economies, according to the Doing Business Report 2016 released by the World Bank last October.

However, big gaps remain between Việt Nam and other Southeast Asian countries in terms of competitiveness and business environment, said Nguyễn Minh Thảo from the CIEM’s Competitive and Business Environment Board.

Specifically, starting a business in Việt Nam now takes about 20 days, while it takes some four days in Malaysia and 2.5 days in Singapore.

An enterprise needs 59 days to get electricity in Việt Nam, compared to 42 days in the Philippines, 37 days in Thailand, 32 days in Malaysia and 31 days in Singapore.

A company must wait 57.5 days to register the ownership and use of assets, while this takes only three days in Thailand, 4.5 days in Singapore, 13 days in Malaysia and 35 days in the Philippines.

The time to resolve insolvency of a firm is about five years in Việt Nam, while it is roughly 2.7 years in Thailand and the Philippines, a year in Malaysia and less than a year in Singapore.

The Government said Việt Nam targets the average level of ASEAN 4 countries (Singapore, Malaysia, the Philippines and Thailand) across several competitiveness indicators of the WEF by 2017. It referred to indicators such as efficiency of competition policies, flexibility of wage determination, and sufficiency of financial services.

By 2020, Việt Nam aims to be at the average level of ASEAN 3 (Singapore, Malaysia and Thailand) in terms of business environment and national competitiveness, across several indicators of international practice.

The time will be cut to less than 70 days for businesses to receive construction permission, less than 33 days for getting medium-voltage electricity, and less than 10 days for registering ownership and use right of a property.

Annually, it will take 110 hours for tax payment, 45 hours per for social insurance premium payment, and less than 36 hours for export goods and 41 hours for import goods to be cleared across borders.

The time to resolve contractual disputes will be less than 200 days, and the time to resolve insolvency will be no more than 20 months.

To achieve these goals, Resolution No 19-2016/NQ-CP required authorities to promptly publicise administrative procedures, eliminate unsuitable business conditions and establish proper systems to deal with requests from people and businesses. Procedures are encouraged to be dealt with through the Internet or postal services.

Every ministry is also entrusted with specific missions to achieve the national targets.

For examples, the Ministry of Planning and Investment must promptly co-operate with the Ministry of Justice to post investment and business conditions on a national portal for enterprises.

The Ministry of Finance is to apply information technology for at least 95 per cent of tax declarations, payments and refund processes, and ensure that any complaints from tax payers are resolved in accordance with the law.

Regular supervision of these processes will be intensified, and civil servants who are irresponsible or cause trouble for people and businesses will be strictly dealt with, the resolution stated.


Nguyễn Hoàng Minh, deputy director of the HCM City Department of Planning and Investment, said the city will need much greater efforts to pursue the national goals.

The city dropped to sixth position in 2015 nationwide Provincial Competitive Index ranking, launched by the Việt Nam Chamber of Commerce and Industry, from fourth place in 2014.

Municipal leaders must be more active in improving the legal framework, easing enterprises’ access to lands, and eliminating unofficial costs for businesses, he said.

Trần Ngọc Nam, Deputy Director of the Hà Nội Department of Planning and Investment, said municipal authorities will meet international investors and organisations at a conference for co-operation and development next month.

He affirmed that fostering collaboration and connectivity among the different regions of Việt Nam will be necessary for the country to improve the business environment.

“We’ve just had a new Cabinet, with a new Prime Minister strongly committed to innovations for businesses and the people. I hope that ministers and provincial and municipal chairpersons are inspired with his spirit for efficient implementation of the resolution. They must pursue their responsibilities to the bitter end,” said Cung.

“The business community should also be more active. Now that the Prime Minister defines that they are the subject for the authorities to serve, they should demand more strongly for the authorities to change,” he said.

On Monday, the Government also issued Resolution No 35/NQ-CP on supporting and developing enterprises by 2020, emphasising its own stimulating role in promoting business development.

The resolution demands stronger administrative reforms, the construction of e-Government and tax reductions, besides eased access to loans, a reduction of business costs and better master plans for the development of industries and products.

The Government expected the number of businesses in Việt Nam to double to a million by 2020, with the private sector contributing some 49 per cent to the nation’s gross domestic product, and a similar ratio to its total social investments by that time.

Yesterday’s conference was held by CIEM and the Government Office, in conjunction with the USAID Governance for Inclusive Growth programme.

The programme is USAID’s primary technical assistance project to support the critical Trans-Pacific Partnership Free Trade Agreement, which Việt Nam signed with 11 other Pacific rim nations in New Zealand in February. — VNS