How to support the business community in Hanoi and improve the provincial competitiveness index (PCI) are the main topics of meetings between the leaders of the Vietnam Chamber of Commerce and Industry (VCCI) with the Hanoi People’s Committee, and its departments and branches.
Guided by the centrally backed “corporate restructuring” spirit, Hanoi City has defined its major tasks in 2013: resolving difficulties against enterprises to prop up production and business activities. Specifically, the city established a steering committee to guide enterprises to tackle difficulties and build specific production promotion plans. The capital city also organised seven conferences and dialogues between business executives, bankers, tax officers and trade unions.
Real estate is placed under close direction. To date, 26 real estate projects have applied for changing from commercial housing into retail housing development. Besides, with a credit stimulus package of VND30 trillion, the bank has disbursed VND59.3 billion for 94 borrowers, including one corporate customer and 93 personal customers, out of VND151.2 billion of total investment capital (VND116 billion from corporate customers and VND34.2 billion from the public).
In addition, to support enterprises to restore production and business operations, the city has decided to subsidise interest rates for five projects worth VND3.4 billion. Hanoi has also slashed and rescheduled tax payment of VND5,403 billion in accordance with the Resolution 02/NQ-CP of the Government.
Mr Ngo Van Quy, Director of the Hanoi Department of Planning and Investment, said: To facilitate enterprises to complete paperwork in the easiest way, Hanoi applies online business registration in all 29 districts. In addition, the department has issued the handbook on “Instructions to business start-up.” Its affiliated SME Support Centre has provided free service for over 30,000 domestic and foreign customers.
Regarding State Budget collection, Mr Thai Dung Tien, Deputy Director of Hanoi Taxation Department, said Hanoi is unlikely to fulfil its budgetary collection target because of socio-economic difficulties. To improve the situation, the Hanoi Taxation Department has stepped up administrative procedure simplification by applying information technology and allowing online declarations.
In addition to existing problems in socio-economic development, Hanoi PCI has also declined significantly. Specifically, the city’s PCI dropped 15 spots, from 36th position out of 63 provinces and cities in 2011 to 51st position in 2012. Worse, the access to land index bottomed the ranking table at 63rd position. PCI launched by VCCI surveyed 8,053 companies across the country.
However, according to the analysis by Chairman of Hanoi People’s Committee Nguyen The Thao, the big change in the city’s PCI is resulted from its characteristics.
Firstly, Hanoi is the capital city of Vietnam where the daily workload to be solved is very huge and complicated while coordinated action among sectors and among citizens remains limited. The city lacks a peculiar mechanism to deal with this disadvantage.
Secondly, Hanoi is also the very stiff competing environment where is the headquarters of 95,000 active enterprises, a quarter of the country's total enterprises, including many industry leaders. Some administrative procedures are being overloaded, such as tax declaration, business registration, customs and insurance procedures. On average, the city serves 600-700 companies to register business operations and tax codes. This will, of course, take more time and expense of enterprises and distress them and the service agencies as well.
Besides, the change in administrative boundary has caused many changes in general and specific planning which has led to changes in granting construction permits. Land prices in Hanoi are always the highest of its kind in the country and this sensitive field usually upsets people unsuccessfully trying to take it.
Before PCI’s weaknesses, Mr Nguyen The Thao said PCI improvement is one of the key tasks this year and in the years ahead. He also requested all bodies to strictly follow the Directive of the Hanoi People’s Committee on PCI improvement in which focuses on business support services, labour training, market entry expense, information transparency and access, access to land, unofficial costs and administrative governance. He asked the Department of Planning and Architecture to work with responsible bodies to complete planning and zoning tasks, requested the Department of Natural Resources and Environment and districts to step up the granting of land-use rights certificates and review administrative procedures related to land.
In addition, Chairman Thao expects VCCI to have coordinating mechanism to introduce Hanoi’s investment potential and prospects as well as introduce the image of Hanoi at international forums. He also asked VCCI to help connect foreign enterprises with Hanoi, introduce the Hanoi investment environment to business associations and investment promotion agencies in Vietnam and in the world. Mr Thao asked the Department of Planning and Investment to work closely with VCCI’s Legal Department to have regular consultations and experience exchanges in order to help the city improve PCI.
At the meeting, VCCI President Vu Tien Loc affirmed that VCCI will responsibly help Hanoi improve its PCI. Besides, VCCI will work with Hanoi to build a powerful business community and entrepreneur force in accordance with the Resolution 09 of the Politburo, and further promote the Hanoi investment environment.
Anh Phuong
Vietnamese
