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Economic Sector

Last updated: Tuesday, November 20, 2018

 

Vietnam Ranked 69 in Ease of Doing Business

Posted: Tuesday, November 06, 2018


Vietnam adopted three reforms during the past year to improve the ease of doing business, including enforcing contracts, paying taxes and starting a business, according to the World Bank (WB)’s Doing Business 2019 themed "Training for Reform”.

Vietnam's ease of doing business in 2018 ranked 69th out of 190 economies, scoring 66.77 points on a scale of 100, one notch from a year ago with a score of 67.93 points.

WB’s rankings are based on 10 criteria: Starting a business; Dealing with construction permits; Getting electricity; Registering property; Getting credit; Protecting minority investors; Paying taxes; Trading across borders; Enforcing contracts; and Resolving insolvency.

This year, the Doing Business report collects training data provided for both civil servants together with land traders and registrars. A case study in the report that analyses this data finds that compulsory and annual training for relevant officials helps increase business performance and land registration. The second study on contract enforcement and solvency resolution takes into consideration training judges around the world. Two other case studies focus on benefits of electrician testing and customs officers training.

The report notes that East Asia and Pacific economies carried out a total of 43 reforms in the past year to make it easier for domestic small and medium businesses to do business. The region is home to two of the world’s top 10 Doing Business economies, Singapore (second) and Hong Kong Special Administrative Region, China (fourth). Additionally, China is among the top 10 improving the most this year, with a record of seven reforms, advancing to 46th place in the global rankings. Malaysia also significantly improved its position in the top 20 economies, climbing nine places to 15th.

Ms Rita Ramalho, Senior Manager of the World Bank’s Global Indicators Group, which produces the report, said, East Asia and the Pacific region have made significant progress in enabling entrepreneurship and private enterprise. As the reform momentum continues building in the region, those economies that lag behind have the opportunity to learn from the good practices adopted by their neighbours.

In the Doing Business report, regional economies performed well in Dealing with construction permits and Getting electricity. For example, building an inventory takes an average of 133 days and costs almost 2 per cent of warehouse value, compared to a global average of 158 days and 4.8 per cent of warehouse value.

Some areas still need to be further improved, such as contract enforcement. More international best practices, alternative dispute resolution systems and specialised commercial tribunals need to be applied. Three-quarters of regional economies do not have specialised commercial courts. Moreover, the cost of settling commercial disputes in the region averaged 47 per cent of the disputed value, compared to 33 per cent globally.
Among reforms performed in the region last year, 10 reforms make it easier to start a business, seven reforms facilitate access to electricity, and five reforms make construction permits easier and safer to be obtained.
Since Doing Business began in 2003, starting a business has been the most common area of reform in East Asia and the Pacific. The average time to start a business has been almost halved to 28 days, from 50 days in 2003, and the cost has been significantly reduced from 59 per cent of the income per capita in 2003 to 19 per cent now.

Quynh Chi








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