Da Nang PCI 2021: Business Environment Keeps Improving

3:56:43 PM | 5/17/2022

Da Nang City ranked 4th nationwide with 70.42 points in 2021, according to a report on the Provincial Competitiveness Index (PCI) 2021 released on April 27, 2022. With this result, the city continued to lead the central coastal region.

According to the PCI report in 2021 released by the Vietnam Chamber of Commerce and Industry (VCCI) and the United States Agency for International Development (USAID), Da Nang ranked 4th in the country with a score of 70.42 points on a 100-point scale to stand among the best performers. After three consecutive years on the 5th position, Da Nang climbed one place to the highest place in five years.

According to VCCI and USAID experts who made the survey, Da Nang City is one of localities with the most stability of economic management quality and capacity over the past time. In addition to the regularly implemented administrative procedure reform solutions, the city established joint working groups in charge of removing difficulties and obstacles in construction investment projects. These working groups help quickly grasp business problems, thereby helping the city government to provide timely solutions. They also actively support attracting investment and improving the business environment in the city.

Specifically, PCI 2021 of Da Nang had five subindexes having the highest scores in the past five years, including: Access to land (7.51/10 points), ranking 10th); Informal charges (7.29/10 points, ranked 23rd); Proactivity of the provincial leadership (7.01/10 points, ranked 26th); Business support policy (7.57/10 points, ranked 9th); and Legal institutions (7.33/10 points, ranked 24th).

Particularly, in 2021, its Legal Institutions Index reached the highest level since the PCI ranking was launched in 2006 while the Business Support Policy Index was highest since 2008, rising by 1.25 points over 2020. However, Da Nang City recorded a sharp decrease in the Market Entry Index over 2020 (sliding from 8.75/10 points to 6.94/10 points, ranked 30th, the lowest score since 2006). The Transparency and Access to Information Index scored 6.3/10 points, ranked 16th, higher than that in 2020, but was the second lowest since 2006. The Time Costs and Regulatory Compliance Index declined significantly from 2020 (from 8.62/10 points to 7.46/10 points, ranked 32nd). The Policy Bias Index (5.92/10 points, ranked 35th) also went down for the first time after three consecutive years of going up (2018-2020). The Labor Policy Index (7.15/10 points) was lowest since 2014 although it was still ranked 4th nationwide.

In addition, Da Nang, Binh Duong and Quang Ninh were considered to have the best infrastructure in Vietnam in 2021 and usually secured high Infrastructure Index rankings for many years. This index includes four component subindices: Industrial zones, Road, Electrical Power, and Telecommunications and Other Infrastructure. However, this indicator was not measured in the composite PCI Index to ensure equity for localities in different geographical locations, as well as to encourage inter-regional coordination to improve infrastructure quality.

Mr. Huynh Huy Hoa, Director of Danang Institute of Development Research, said, the COVID-19 epidemic has caused many difficulties for Da Nang City, featured by moderate economic growth in recent times, but its PCI 2021 showed that the business community still appreciated Da Nang very well.

Improving the business environment and enhancing competitiveness are key tasks

Since 2010, Da Nang had 11/12 times ranked Top 5 in index scores in the country, with five times topping the list. However, as a previous leader of the city once said, “the highest PCI ranking does not mean the best competitiveness”. The city must continue to reform for that reason.

In early 2022, the Da Nang City People's Committee adopted a plan to implement the Government's Resolution 02/NQ-CP on main tasks and solutions for better business environment and competitiveness in 2022. The plan defines that improving the business environment and enhancing competitiveness is central and priority tasks of Da Nang. The plan also aims for strongly improving the business environment and raising the city's standings of business environment and competitiveness in order to adapt to development trends led by the Fourth Industrial Revolution and enhance economic resilience amid the COVID-19 epidemic; increasing the number of newly established enterprises; reducing corporate bankruptcies; and raising PCI rankings. It will also step up removal of negative difficulties and obstacles caused by the COVID-19 pandemic; promptly support people and businesses to restore production and business, and flexibly, effectively adapt to the epidemic.

Accordingly, the city’s key task is to diminish conditional investment and business lines and reform business conditions; focus on removing barriers to investment and business activities because of overlapping, conflicting, unreasonable and inconsistent legal regulations. The city will further accelerate administration reforms and specialized inspections of imported and exported goods; and implement regulations on administration and specialized inspection of imported and exported goods.

At the same time, the plan states fostering land registration reforms; investing in building information systems and land databases; upgrading technical infrastructure, digitizing planning and storing digitized cadastral records; and applying information technology in land ownership certification procedures. It will strongly launch electronic interconnection to exchange land information and data between land registrars and tax authorities in determining financial obligations when land users perform land and related asset transactions.

On the other hand, the city will further reform, reduce and simplify administrative procedures by decentralizing and empowering local authorities to perform inspection and supervision; resolutely diminish and simplify administrative procedures, reduce compliance costs in all aspects; research solutions to reforming administrative procedures for digital transformation, energy transformation and green technology projects; and align administrative procedure reform with e-Government and digital government.

By Vietnam Business Forum