Driving Reforms Critical to Economic Development

12:58:05 PM | 4/15/2021

On April 15, 2021 in Hanoi, the Vietnam Chamber of Commerce and Industry (VCCI) cooperates with the United States Agency for International Development (USAID) to announce a report on the Provincial Competitiveness Index (PCI) 2020.

The PCI report, announced annually for 16 years, reflects what the business community feels about the business environment in Vietnam, and assesses and ranks the ease of doing business and economic governance quality in Vietnamese provinces and cities.

The PCI report 2020 not only conveys the voice of the business community about the domestic business environment in 2016-2020 period but also positions the appeal of Vietnam in the eyes of investors and reflects expectations of the business community on the government's reform efforts in the next five years.

This year, the report also analyzes in detail the impacts of the Covid-19 pandemic on Vietnamese businesses, aiming to provide necessary input for government agencies and development assistance organizations to launch practical actions to realize the dual goal of preventing the pandemic and boosting socio-economic recovery and development as set out by the Government.

In particular, for the first time, the PCI report provides insightful analysis and assessments on business motivation for investment in green technology and environment-friendly business - a megatrend adopted by the Party and Government to raise the quality of investment fund for Vietnam's future sustainable development.

Over the past years, PCI reports conveyed important messages from the business community to authorities at all levels in Vietnam for better governance strategy, better administrative procedure reform and ease of doing business. A lot of improvement was seen in Vietnam in the past time. Little cared for at first, administration reform has now become the most important task in most localities. From a handful in number and a modest position, private enterprises have grown rapidly, about to reach one million officially registered. The private sector has been facilitated and encouraged for development by the Party and the State. From a low ranking in the world, Vietnam's business environment has been increasingly improved, aiming to be among Top 4 ASEAN in terms of ease of doing business. PCI has significantly contributed to this important transformation in Vietnam.

The biggest improvement PCI has made over the years is encouraging businesses to say what they are thinking about, creating a channel to communicate their difficulties to relevant authorities. Local governments now have sufficient information and quantitative evidence to work out their own reform programs. Capitalizing on PCI reports, they can make evidence-based and quantitative policies. PCI reports have generated many reform models and successful lessons which have been scaled up nationwide. Business Café - a semiformal business dialogue between enterprises and authorities initiated by Dong Thap province - has now been deployed in more than 40 provinces and cities across the country. The Department and District Competitiveness Index (DDCI), a district-level PCI pioneered by Quang Ninh province, has now been applied by nearly 50 other provinces and cities. All aim at listening to the voice of business and then figuring out solutions to real-world barriers that are hindering business development.

By Anh Mai, Vietnam Business Forum