PCI - Standard Gauge of Investment Environment in Vietnam

PCI is designed to assess and rank the quality of provincial/municipal governance, ease and friendliness of business environment, and reform efforts of 63 provinces and cities in Vietnam. The PCI has now become a particularly useful tool as it reflects the true voice of the local business community on the actual business environment in Vietnam, while providing local governments with specific accurate data/reports on aspirations of businesses, helping them promote strengths and address weaknesses to shape a better administration.

 

The governance of local governments is measured in 10 fields that affect the development of the private sector. Accordingly, a province/city has a good governance quality when: it has: (1) low entry costs; (2) easy access to land and security of business premises; (3) a transparent business environment and equitable business information; (4) low informal charges; (5) short time requirements for bureaucratic procedures and inspections; (6) equitably competitive environment; (7) proactive and creative provincial leadership in solving problems for enterprises; (8) developed and high-quality business support services; (9) sound labour training policies; and (10) fair and effective legal procedures for dispute resolution.

 

In the past 12 years, PCI has interviewed 337,730 private enterprises and 59,430 FDI companies. On average, one out of five companies has joined PCI surveys. This is the largest business survey in Vietnam, just after the general survey performed by the General Statistics Office (GSO).

 

As many as 200 PCI documents had been issued by provinces and cities to improve local business environments as of June 2016. Such documents are resolutions of the Provincial/Municipal Party Committee, resolutions of the Provincial/Municipal People's Council or decisions or directives of the Chairpersons of Provincial/Municipal People’s Committee. Especially, starting from 2014, the Government of Vietnam officially added PCI improvements to its Resolution 19/NQ-CP to better local business environment and competitiveness. In 2015 alone, at least 23 provinces and cities issued action programmes and plans to realise Resolution 19/NQ-CP of the Government dated March 12, 2015 on key tasks and measures on continued improvement of national business environment and competitiveness in 2015-2016.

 

Up to now, all 63 provinces and cities across the country have promulgated written guidance and action plans concerning PCI improvements. A strong impact on reforms is resulted from PCI. Most localities have chosen PCI improvement as the foundation for bettering provincial/municipal business environment. Particularly, at their Party meetings, 13 provinces and cities placed high priority on PCI improvement, including Ho Chi Minh City, Danang City, Lam Dong, Hoa Binh and Son La provinces.

Up to 335 seminars on PCI have been held across the country, attended by nearly 52,200 officials.

 

In November 2015, the PCI Project was named one of 62 important projects, products and services in the 2011-2015 period by the Party Committee of the Central Enterprise Bloc for its great contributions to national socioeconomic development.

 

In the third quarter of 2016, Chairpersons of the Provincial/Municipal People's Committees signed commitments on ease of doing business with the Vietnam Chamber of Commerce and Industry (VCCI), witnessed by the Steering Committee for Business Renovation and Development.

 

The PCI has become familiar for many localities and become a reliable objective indicator of provincial governance quality. Instead of showing suspicion and giving criticism as earlier, local authorities are now actively seeking to take drastic action to improve the business environment on the basis of PCI results. Local leaders are knowledgeably analysing and making reports on PCI and component sub-indices. Many use this data as the base for gauging the quality of operations over the time to work out appropriate action programmes.

 

PCI reports and data have become valuable sources which are commonly used in many different walks of life. Domestic and foreign companies see PCI as an important support to make decisions on business locations and expansions. Local leaders use PCI as a measure of success of reform programmes to improve economic governance, as well as identify experiences and good practices in other localities to apply in their places. Elected representatives and business associations use PCI to monitor the progress of business environment improvement. Central policymakers use PCI as an assessment criterion for many economic reform policies.

 

In addition, PCI, a made-in Vietnam reform initiative, has also been exported and implemented well in 13 countries worldwide, including India, China, Malaysia, Indonesia, Sri Lanka, Bangladesh, Salvador, Kosovo, Myanmar and Laos.