Vietnam's position in ratings reports in 2014 is very low in the world and its competitiveness is below average in comparison with other ASEAN countries. With the effort and determination for a better Vietnamese business environment, the Government issued Resolution 19/NQ-CP dated March 18, 2014 on key tasks and solutions to improve the business environment and enhance national competitiveness. After a short time of enforcement, the Resolution has generated positive impacts and effects.
According to the World Bank’s Doing Business 2014 released in October 2014 (data used as of June 2014), Vietnam’s ease of doing business ranking improved significantly. According to the Global Competitiveness Report published in September 2014 by the World Economic Forum (WEF), Vietnam’s competitiveness index climbed two places to the 68th position out of 148 economies. International credit ratings agencies also upgraded Vietnam’s credit ratings (Moody's raised Vietnam’s credit ratings from B2 to B1; Fitch Ratings upgraded it from B+ to BB- with stable outlook).
However, Dr Nguyen Ba An, General Secretary of the National Council for Sustainable Development and Competitiveness Improvement, said that growth drives Vietnam gained in the past time failed to exert the immediate effect on the economy, which is vulnerable to challenges and inherent weaknesses. Some international institutions rated Vietnam’s competitiveness lower than other countries in the region. The country’s competitiveness weaknesses are found in such aspects as institution, infrastructure and macroeconomic environment.
According to international organisations, although Vietnam’s business environment and competitiveness has gradually improved, it remains low relative to other countries in the region. Regulatory institutions, policy mechanisms, administrative procedures and duty performance still have a lot of shortcomings which cause trouble and take more time and money from businesses and citizens. Some ministries and localities do not pay due attention to improving the investment environment and enhancing competitiveness.
To further improve the business climate and competitiveness, on March 12, 2015, the Government issued Resolution 19 on primary tasks and solutions for better business environment and national competitiveness in 2015 and 2016. It requested ministries, agencies and localities to focus on consistent and effective implementation of key tasks and solutions to realising three strategic breakthroughs together with restructuring the economy, changing the growth model, raising productivity, quality, efficiency and competitiveness, and upgrading Vietnam’s rankings in business environment (rated by the WB) and national competitiveness (rated by the WEF). In 2015, Vietnam targets to bring its business environment indicators to parity with, or even above, the ASEAN-6 average. In 2016, its major indicators will reach the parity of ASEAN-4 average. The Resolution also specifies 10 overall solutions and 65 specific solutions for ministries, agencies and localities.
At the Vietnam Corporate Sustainability Forum 2015 held in Hanoi on May 14, Mr An affirmed that, based on good results achieved in 2014-2015, Vietnam targets to bring its investor protection index to 52nd place from the 157th position, the setting up the business index to 60th from 109th; tax payment index to 134th from 149th, access to electricity index to 111th from 115th. With these results, the ease of doing business index of Vietnam is expected to climb to the 56th position.
He added that, when assessing a country’s competitiveness now, international organisations or countries usually refer to and use various component indexes in the Global Competitiveness Index (GCI) issued by the World Economic Forum (WEF). According to the WEF’s Global Competitiveness Report 2014-2015, Vietnam belongs to the group of 37 developing countries at an early stage. ASEAN-6 countries belong to higher groups than Vietnam. The Resolution 19 positively affected ministries, branches and localities on improving investment environment and enhancing national competitiveness.
However, he recommended that, to enter a new stage of development, Vietnam needs to experience a transitional phase. Therefore, Vietnam will focus on improving basic indicators and performance factors. Many indicators of Vietnam are far behind other countries in the region such as institutional indicator (ranked 92nd). Hence, in the coming period, Vietnam will focus on institutions (basic indicator) and invest in productivity improvement factors.
Ha Vu
Vietnamese
