Substantial Improvement in Administration Reform and Governance Quality

6:43:43 AM | 5/2/2023

Quang Ninh, Bac Giang, Hai Phong, Ba Ria-Vung Tau and Dong Thap respectively achieved the highest quality of economic governance in the PCI Rankings 2022.

VCCI President Pham Tan Cong and USAID/Vietnam Mission Director Aler Grubbs give the PCI trophies and certificates of recognition to the top performers in the 2022 PCI rankings

Speaking at the Launching Ceremony of the Provincial Competitiveness Index (PCI 2022) held by the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi, VCCI President Pham Tan Cong said that the PCI Launching Ceremony has been an annual event for 18 years. The PCI has been steadfast and persistent with the mission of “evaluating the quality of economic governance to boost business development and economic development of the country”, he added. In 18 years the PCI has transformed itself into a top-class prestigious public administration quality assessment toolkit in the country and in the world. The PCI has become an effective means of conveying messages and expectations of the business sector to all levels of government. For the provincial government, the PCI is a symbol of a progressive and cooperative mindset toward the business sector.

The PCI 2022 survey was conducted in the context that the business community was facing numerous difficulties, challenges and opportunities. No sooner had many businesses struggled to overcome the dark times of the COVID-19 pandemic than they faced new global economic-geopolitical shocks, including conflicts, energy crisis, banking and financial instability, high inflation and weakening global consumer demand. Lackluster growth prospects of major economies and inflation fears in the world negatively hit an opening economy like Vietnam.

“This less optimistic situation was also reflected in business confidence in the PCI Survey 2022. Only 35% of private companies and 33% of foreign-invested firms intended to expand the size of their operations over the next two years,” Mr. Cong emphasized. At the same time, local leaders also realized the hard times companies are experiencing.

In such unfavorable conditions, according to VCCI President Pham Tan Cong, the role of local governments will be more appreciated, with greater expectations of creating a favorable business environment to support businesses to overcome challenges for stable recovery and development. Therefore, "Hope" is the keyword of this year's PCI report.

He also affirmed that the PCI report identified reform areas and put forth solutions. As an indicator of action, the PCI drives localities to improve evidence-based governance. It also spread many good models and good practices of good performers to the rest of the country to narrow the gap in governance quality among localities.

Quang Ninh tops PCI rankings 2022 for the sixth year

The PCI 2022 survey received responses from a total of nearly 12,000 businesses. Positively, PCI 2022 showed that the quality of provincial governance has kept growing over time. The median score of PCI 2022 was 65.22 points, rising for a sixth consecutive year. In addition, the enhanced quality of administrative procedures helped reduce regulatory compliance costs for businesses. Inspection burdens decreased significantly from 2016 to the present. In particular, the payment of informal charges tended to go downwards from 2016. Notably, 3.8% of companies spent more than 10% of revenue on informal expenses, down sharply from 9.1% in PCI 2016. Transparency was positively improved, especially planning documents. Although it did not reach the level of "easy" access for most businesses, the trend over time showed that obstacles had been gradually removed for businesses when they accessed these types of information and documents.

According to the PCI 2022 survey, weak points included troubles and harassment in some areas of administrative procedures. The most troublesome areas of administrative procedures as perceived by businesses included tax/fee, site clearance, social insurance, fire protection, and construction. Moreover, the quality of policy enforcement at the grassroots level remained low and more efforts would be needed for a better outcome. Notably, land access remained a major bottleneck for many companies and caused many business plans to be canceled or delayed. This matter was pointed out in previous PCI reports. Accordingly, businesses needed to continue solving congestion and the time of handling land records was often longer than prescribed.

Although some contents did not come as expected, improving the business investment environment and enhancing competitiveness is indeed one of the important and consistent policy priorities of the last three government terms, said Mr. Pham Tan Cong. The Government will continue to accelerate institutional reforms and remove barriers to legal regulations to free up development resources for the business community. The Government, central and local bodies are paying more attention to reviewing and removing overlapping laws and policies, getting rid of barriers to business conditions, and harmonizing regulations with international laws.

Mr. Nguyen Xuan Ky
Secretary of the Provincial Party Committee, Chairman of the Provincial People’s Council, Quang Ninh Province
Quang Ninh province is once again very honored to receive the recognition and appreciation of the business community for the ongoing reform and innovation efforts of the local government with the first place in PCI rankings 2022, the only locality in the country to hold this championship position for six straight years (from 2017 to 2022) and Top 5 best performer in 10 consecutive years (from 2013 to 2022).
With the working principle “There is only one starting point and there is no ending point, there is only one way which is moving forward", we clearly understand that it is hard to gain this ranking but it is even harder to keep it. Challenges and difficulties still lie ahead. When this contradiction is resolved, another will appear with more complexity that requires a higher level of local sustainable administration capacity. On the reform journey, we must try every day and never feel self-satisfied with what we have done but always promptly figure out contradictions in administration practice, and difficulties and challenges faced by enterprises and people to find solutions to them with the mindset of "shifting from an administration approach to a service approach", boldly pilot applying new governance models, and accelerate comprehensive digital transformation to enhance publicity and transparency of better public services delivered to businesses, investors, people and society. We also raise policy response capacity and promptly handle newly emerging issues within the given jurisdiction; expand connections, exchange information, strengthen regular interactions between governments at all levels with people and businesses; create an open, public, transparent investment and business environment for fair and equal competition in access to resources, especially land and labor, among businesses, investors and economic sectors, especially small and medium enterprises.

Mr. Le Van Han

Chairman of the Tra Vinh Provincial People’s Committee
The Provincial Green Index (PGI) was designed to encourage provincial and municipal governments to direct their efforts toward private sector development in the spirit of the National Green Growth Strategy and the National Strategy for Climate Change Response. Although the PGI Index has only been applied since 2022, integrated into the PCI Index survey, the high ranking of Tra Vinh province proved effective efforts, actions, discipline and development.
The province advocates not exchanging the environment for the economy and resolutely rejects projects and facilities that fail to meet environmental requirements. The annual environmental inspection and examination is strengthened to promptly handle violations of environmental laws and prevent repeated violations. The province installed a surveillance camera system in environmental hot spots and ore sites. At the same time, to manage and monitor environmental quality (air, surface water, underground water, coastal seawater and wastewater), annual environmental monitoring is enhanced, with a focus placed on industrial zones, traditional trade villages and aquaculture zones for timely warnings and forecasts of pollution. In investment promotion, attraction and licensing, we always pay attention to economic development associated with environmental protection and select environmentally friendly investment projects.
The above results will be a good signal of a better business environment and investment attraction in the province. It is also a driving force for Tra Vinh to make more efforts to develop the private sector in the spirit of the National Green Growth Strategy and the National Strategy for Climate Change Response and to promote the construction of an environmentally friendly business ecosystem. To further strengthen business confidence, the province will have a more specific approach to PGI. We will consistently direct, administer and carry out implementation at all levels of authority and must really act closely and responsibly with the feedback of the business community on existing weaknesses of state agencies, sectors, fields and localities.

Quynh Chi (Vietnam Business Forum)