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Date 16/03/2018-09:16:00 AM
Substantially Improving Business Environment to Strengthen Economic Growth
(MPI) – During the last few years, with the implementation of Resolution No.19 from the Government, the business environment of Vietnam has improved significantly. In order to carry on the task of improving the business environment, enhancing national competitiveness in 2018 and the following years, on March 15, 2018, the Government Office, the Ministry of Planning and Investment in collaboration with the World Bank in Vietnam, Australia Government and United States Agency for International Development (USAID) held the International Conference “Substantially Improving the Business Environment to Strengthen Economic Growth”. Deputy Prime Minister Vu Duc Dam chaired the conference.
Deputy Minister of Planning and Investment Nguyen Van Trung speaking at the opening of the Conference: MPI

The conference aimed at evaluation of the results in improving the business environment in the period 2014 – 2017 and introduction of the contents, tasks in 2018 and the following years: International experience sharing in improving business environment, enhancing competitiveness; Action Plan for Enhancing Private Sector Competitiveness towards 2035; Reform results, existing matters and seeking for solutions to improving the business environment for the enterprises; Solutions to enhancing the tourist and logistics competitiveness in order to support economic restructuring, boosting labor productivity and competitiveness of the economy.

Speaking at the opening of the Conference, Deputy Minister of Planning and Investment Nguyen Van Trung said that improving the business environment, strengthening economic growth is the top priorities of the Government in the past few years, the continuous promulgation of different versions of Resolution No. 19 on improving the business environment, enhancing national competitiveness is noticeable. This is an attempt to perform a strategic breakthrough on the institutions, in which the main focuses are regulatory, administrative reforms and improvement of the business environment.

An outstanding point of Resolution No. 19 is that this is the first time Vietnam has aimed at and set out goals on business environment quality and national competitiveness in terms of global rankings, as well as constructed and implemented the corresponding policy according to International practices. This showed the new approach of the Government, which was highly appreciated, participated in implementation and supported positively by the domestic and foreign business community. At the same time, this helped Vietnam to measure and monitor the improvement level, determine the gaps between the domestic business environment and national competitiveness and those of other economies in the region and the world.

After 4 years of implementing the Government's Resolution No. 19, the Vietnamese business environment and competitiveness has been continuously improving. In 2017, the national competitiveness raised 5 steps as compared to 2016 from 60th out of 138 to 55th out of 137 economies. Business environment raised 14 steps, from 82nd to 68th out of 190 economies. Creative innovation improved 12 steps, reaching the 47th rank out of 127 economies. Those are the highest ranks Vietnam has reached so far. Besides, in 2017, Moody’s, Standards and Poor’s and Fitch also raised Vietnam's national credit rating, in which Moody’s and Fitch raised the rating from stable to positive.

However, the improvements above on business environment and competitiveness have not been stable nor reached the targeted goal. Ranks of many indicators were still low as compared to other countries in the area and got almost no improvements in score and rank over the past few years. Ranks of some other important indicators were even falling. For example, goods market efficiency, the quality of infrastructure, education, the level of business development and technological innovation improved slowly. Business start-up ranked 123th. Settlement of business bankruptcy ranked 129th. Registration of property ownership and use rights was continuously falling in rank, lasted 57,5 days and ranked 63rd. Contract dispute resolution lasted 400 days and ranked 66th.

At the meeting: MPI

Proposing solutions on improving business environment for 2018 and the following years, Ph.D Nguyen Dinh Cung, President of the Central Institute for Economic Management (CIEM), Ministry of Planning and Investment said, in order to strengthen the achieved results, in the draft Resolution No. 19-2018, the government continues to aim for higher targets and reform stronger to achieve even results and more actual, more comprehensive impacts. In which, the government would create greater pressure and stronger administrative discipline to improve the low ranked indicators that did not improve much in the last few years, especially business start-up, registration of property ownership and use rights, cross-border trade; at the same time, coordinate better, more effectively with the People's Supreme Court to substantially improve the indicators of settlement of business bankruptcy and settlement of the contract dispute, complete the goal of abolishing at least 1/3 to 1/2 of current business conditions in all branches, sectors of the economy. On specialized examination, the target of the Resolution is to basically complete the goal of reducing number of import and export goods that must be inspected before customs clearance to maximum 10%, basically finish the target of reducing at least ½ the number of the categories of export and import goods subject to specialized examination, apply widely the method of management based on the risk level of goods and the level of compliance of businesses. At the same time, it is necessary to improve the tourist competitiveness to make this branch become the key economic sector and the competitiveness of the logistics service industry to facilitate and reduce business costs, support the economic restructuring: Reduce the logistics costs to the level of approximately 18% GDP, improve about 10 more steps of the Logistics efficiency index.

According to the Resolution, the Government requests that the ministries, branches, localities must apply the Information Technology, perform provision for all public administrative services at level 3, 4 and must connect all administrative procedures through the National Single Window Portal. Along with that, the National Council on Sustainable Development and Competitiveness Improvement are required to work with the business associations to evaluate the situation, take field survey, provide evidence and advise the Prime Minister in directing the drastic and complete implementation of the objectives of the Resolution.

At the conference, Ms Catherine Masinde, the World Bank’s manager of business regulations, macro, trade, and investment had shared reform experiences and lessons from Korea, one of the four economies in the world that gained full points on the court automation index, case studies on strengthening the legal framework for dealing with insolvency in Thailand and on single window business registration in Macedonia. Ms. Catherine Masinde recommended that the high-level vision must be translated into operational goals and detailed action plans at all levels, a transparent and efficient system of interaction between the central and local agencies, periodic reporting, as well as a mechanism for escalation/ arbitration at different levels are needed to support implementation. Also, a preferential policy, mutual learning, financial incentives, awarding, public sector operations results, public determination, annual/ bi-annual results reports, the participation of the private sector in constructing programs, targeting priorities, a mechanism for collect comments on new laws, feedbacks, and user surveys are needed.

Deputy Prime Minister Vu Duc Dam speaking at the meeting: MPI

Speaking at the meeting, Deputy Prime Minister Vu Duc Dam highly appreciated the genuine and responsible contributions of experts, scientists, business community and international organizations in improving the business environment of Vietnam.

Over the last 20 years, although Vietnam had the second fastest growth in the world, many Millennium Development Goals have been achieved, but Vietnam’s income per capita remained at the position of approximately 125th, human resources development index remained at around 115th-120th in the world, Vietnam's labor productivity was very low. Because of that, for sustainable development and higher labor productivity and income per capita, besides technological innovation, labor training, total factor productivity enhancement, etc., the most important thing for Vietnam is to restructure the labor force.

The Deputy Prime Minister emphasized that through the experiences in the implementation of Resolution No.19 period 2014 to 2017, in the year 2018 the unevenness among ministries, sectors, localities and “heat above but col below” within some ministries, branches must be overcome. The Deputy Prime Minister also hoped that the International organizations along with the ministries, branches of Vietnam would establish a mechanism to provide the accurate, complete information in order to have objective, scientific assessment reports, as well as enhance the connection among the forums, conferences that have the same theme of improving the business environment, enhancing competitiveness in some specific areas, create the initial breakthroughs that spread out afterwards./.

Hien Nguyen
Ministry of Planning and Investment

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