Thursday, August 13 2020


Deregulation the way forward for business: expert

Update: March, 20/2020 - 10:38


Nguyễn Đình Cung, former director of the Central Institute for Economic Management and member of the Prime Minister’s economic advisory group. — Photo

Nguyễn Đình Cung, former director of the Central Institute for Economic Management and member of Prime Minister Nguyễn Xuân Phúc’s economic advisory group, speaks with Năng lượng Mới (New Energy) newspaper about measures to improve the business environment

The process of reducing business conditions has slowed in recent years, proven by the return of old business red tape. What do you think about this?

First of all, we must identify what conditional business is and what the business conditions are.

Business conditions, under the State's aspect, are the State’s management tools for business activities.

However, for businesses, some of them are a barrier to development. Such barriers increase businesses’ costs and distort the market. They make products cost more, make it more difficult to access business opportunities and make the market less competitive and less efficient. This reduces the growth of the economy.

In the past two decades, improving the business environment and reducing business conditions have been a priority of administrative reforms. Since 2016, administrative reforms have focused on cutting conditional business lines, reducing the number of business conditions and limiting the overlap in issuing business conditions.

In 2017, we proposed completely removing three-quarters of the 4,000 business conditions. The Government later approved cutting or simplifying half of the business conditions.

However, the decision did not state clearly how much we could simplify a business condition. Changing a name or removing something in the condition is considered simplifying work. This has obscured the goals of administrative reforms.

Has there been some success in this work?

In 2018, the situation was better in terms of cutting the number of business conditions. The ministries showed their determination in implementing the Prime Minister's direction with a series of newly issued documents on cutting business conditions. This created trust for businesses and society and promoted domestic investment.

However, the situation hasn’t gone well since 2019. The pace of improving the business environment and cutting business conditions has slowed down a lot.

No one can really answer the quality of these reforms. We do not know how to assess them, whether the evaluation should be on the number of conditions cut or on the impact on businesses.

I believe there should be a comprehensive evaluation of the reforms.

In my opinion, the reduction of business conditions in the past several years has had little positive impact on the business environment. We should completely abolish three-fourths of total business conditions.

On what basis do you think that the three-fourth of business conditions should be completely cut?

Many people have asked me that question. Here’s my answer. I give a ratio of three-fourths based on four factors.

Firstly, it's based on my research on the scientific basis for laying out conditional business lines. Secondly, it's based on the practical requirements on the abolition of business conditions. Thirdly, it's based on international practices.

Finally, it helps change management thinking by cutting ineffective tools.

Too many business conditions only create a tool for civil servants to abuse their power and profit from enterprises and the State. When this tool is cut off, the State management method will be changed. This is an extremely important task.

We cannot follow the old path. The reduction of business conditions has not changed much and failed to bring effectiveness for both State management and the economy for decades.

Most business conditions must be cut, or they will continue to cause negative impacts on the business environment and the economy. — VNS

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