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Dinh Vu

Economic Sector

Last updated: Monday, June 18, 2018


Unsettled Concerns Remain

Posted: Thursday, March 16, 2017

Unlike previous years, Resolution 19-2017/NQ-CP was issued much earlier, right on the first working days of the Lunar New Year, showing the great determination of the Government of Vietnam towards improving business environment and enhancing national competitiveness. However, there are still unsettled issues.

Dr Nguyen Dinh Cung, Chairman of the Central Institute for Economic Management (CIEM), one of important persons contributing to the introduction of four editions of Resolution 19 from 2014 to 2017, said that Vietnam will reach the par of ASEAN 4 nations in terms of business environment criteria by the end of 2017. Admitting that this is an ambitious goal, he said what he worries most is the implementation stage from central to local levels and across all ministries. He also frankly pointed that routine way of thinking is a heavy drag on innovation efforts.

Localities yet to be for mutual interests
Resolution 19 of 2016 underlined 13 groups of general tasks and solutions and 83 separate tasks assigned to ministries, agencies and localities. As of December 2016, 35 solutions were effectively carried out and delivered positive results (42.2 per cent); 19 solutions were carried out without clear results achieved (22.9 per cent) and 29 solutions were not carried out (34.9 per cent).

In general, the rate of completed tasks undertaken by ministries and branches was just 42 per cent. But, even among achieved indicators, for instance Building Permit Index and related procedures, Vietnam had a good ranking in the region (ranked 24th out of 190), behind only Malaysia (13th) and Singapore (10th), but the time was very long (166 days), much higher than the average of ASEAN 4 (82 days).

Dr Nguyen Duc Kien, Deputy Chairman of the Economic Committee of the National Assembly remarked that the Resolution 19 may be a driving force for the stagnating vehicle. But, the vehicle cannot move fast forwards if there is only the force. "The new resolution sets 250 targets for 20 groups of fields and sectors. It is more specific than previous resolutions but it has not delineated prioritised areas and the order of priorities linked to individual accountability of heads of ministries, sectors and localities," he noted.

Local roles are not only blurred but in some cases go against general trends. For example, Resolution No. 148/2016/NQ-HDND dated December 13, 2016 of the Haiphong City People's Council on collection of charges for use of infrastructure facilities, utility works and public facilities in seaport areas, effective from January 1, 2017.
Businesses said that the new regulation of Haiphong City is indeed adding a new type of fees which overlap many others they are paying for while they do not let businesses prepare for this sudden change. Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said, “This is a regression of policymaking."

VCCI expressed its concerns that this move by Haiphong will create a dangerous precedent for other seaport and airport operators to set new fees that are detrimental to business. This move taken by Haiphong City was considered to be contrary to current regulations on customs procedures and forced the General Department of Vietnam Customs to send a request to the Haiphong Customs Department demanding not to ask enterprises to submit or show other proofs other than customs documents.

Ministries are often confused
Of course, such occurrence has not only seen in localities. The draft rule on increase of environmental taxes on gasoline submitted by the Ministry of Finance has also caused mixed reactions. Many argued that this is in principle necessary but it should have come up much sooner and it must have come with a suitable roadmap. This revealed inherently weak points in policy-making and policy enforcement in our country. "I totally do not understand why [they] have to prohibit the private sector from providing search and rescue services," he said with a concrete example. In other cases, the sectors are mentioned quite generally, easily leading to varied interpretations - a way to trouble private enterprises.

Not mentioning the rationality of sectors stated in the list, Dr Nguyen Dinh Cung proved to be strongly "allergic" with the name of this list. "It represents an outdated mindset of prohibition. I am very surprised that the Ministry of Industry and Trade has made some strong decisions towards opening up and removing barriers for the market to develop but it this time put forth such a ridiculous document," he opined.

It is clear that infiltrating the spirit of Resolution 19 into all ministries, sectors and localities and transform it into concrete action will be long and rough.


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