Supporting Firms to Enter Market Early and Do Business Smoothly

7:34:14 AM | 9/4/2023

Bac Giang province is committed to improving the business environment and attracting investors by providing favorable conditions for enterprises and investors. The province is accelerating administrative procedure reforms in business licensing to facilitate investment. Vietnam Business Forum’s reporter has an interview with Ms. Bui Thi Thu Thuy, Director of the Department of Planning and Investment of Bac Giang province, on this issue.

Bac Giang Provincial People’s Committee launched the Korea Desk to facilitate investment in the province

In recent years, Bac Giang has achieved encouraging results in investment attraction, especially in foreign direct investment (FDI). Could you tell us more about these results?

In the past time, with the effort and action of all levels, branches and localities, with the close coordination of the entire political system, with the support of the business community, Bac Giang province has achieved many optimistic results in socioeconomic development and investment attraction.

In 2022, the province attracted nearly US$1.7 billion of investment capital, up 6.5% from a year earlier. Specifically, 28 new domestic projects registered to invest VND6,805.5 billion (US$295 million), up 16.5%, and 38 new FDI projects registered to invest US$581.49 million, down 10%. 13 existing domestic projects registered to add VND548.8 billion (US$24 million), 2.5 times higher than in 2021, and 48 existing FDI projects increased their registered investment fund by extra US$879.15 million, 1.27 times more than in 2021. 30 foreign investors signed up to invest US$97.5 million to purchase shares and contribute their money in economic entities. As much as VND4,500 billion (US$196 million) of domestic investment and over US$750 million of FDI fund were expended by investors in the year. By FDI value, Bac Giang ranked 9th in the country.

The province had 1,684 new companies and 154 new corporate branches and representative offices in the year, an increase of 18% over 2021. Their registered capital was VND29,679 billion (US$1.3 billion), up 6%.

How did the Department of Planning and Investment help the province to achieve these results?

Right at the beginning of the current administration term, the Department of Planning and Investment advised the Party Personnel Board of the Provincial People's Committee to submit to the Standing Board of the Provincial Party Committee to issue Resolution 105-NQ-TU dated April 28, 2021 on improving the investment and business environment and enhancing the Provincial Competitiveness Index (PCI) in 2021-2025. At the same time, the department advised the Provincial People's Committee to launch Plan 293/KH-UBND dated June 26, 2021 to specify every task stated in the Resolution, assign task responsibility to each agency and locality to create a favorable, transparent, equal and open investment and business environment for all economic sectors, thus effectively mobilizing and utilizing resources to enable Bac Giang province to achieve inclusive, solid development and gradually build its name and elevate its position to new highs.

The department also consulted the Provincial People's Committee to submit Bac Giang Provincial Planning in 2021 - 2030, with a vision to 2050, to the Government for approval. This was a particularly important task to shape development directions, arrange the development space and allocate resources for socioeconomic activities, national defense, security and environmental protection of the province in the new period.

In addition, the department actively advised the Provincial People's Committee to launch an action plan for PCI Index improvement and announce a plan for implementation of the District and Department Competitiveness Index (DDCI) in 2020 and 2021. This move inspired competitive and emulative spirit among agencies and among localities in economic management quality and service to the business community.

Furthermore, the department advised the Provincial People’s Committee and launched an online contest called "Knowledge and initiatives for a better investment and business environment in Bac Giang province". Every year, the agency organizes one or two meetings and contacts enterprises and investors to understand their difficulties and problems in business to promptly consult provincial leaders on solutions. At the same time, the agency adopted the single-window initiative for administrative procedures at the Provincial Public Administration Service Center.

The department also recommended amending investment project appraising and decision processes and constructed a new set of investment project selection criteria to pick up quality and effective projects that use land, energy and labor resources economically and reduce environmental pollution.

From potential advantages clearly envisaged after the Provincial Plan for the 2021-2030 period, with a vision to 2050, was approved and with well-prepared mechanisms, policies and human resources, in what sectors, fields and localities will Bac Giang province attract investment capital? How are the scale and quality of new projects that the province is aiming for?

Bac Giang is the first province approved by the Prime Minister of the Provincial Planning for the 2021 - 2030 period, with a vision to 2025 in the Provincial Planning for the 2021-2030 period, with a vision to 2050 under Decision 219/QD-TTg dated February 17, 2022. In order to achieve best outcomes stated in the Provincial Planning, the province has advocated attracting investment in the following sectors, fields and projects:

FDI projects: Attracting partners with global brands, large financial capacity, stable and long-term investment plans, strong linkage and magnetism to supporting manufacturers.

Investment attraction approach: Attracting investment capital for comprehensive sectoral development, with the industry being the main driving force, the agriculture being the guarantee foundation and the services being the boosting catalyst.

Industry: Focus on attracting investment fund for downstream industrial development to enhance productivity, quality, performance, resource conservation and environmental friendliness.

Development areas: Priority will be given to projects in planned industrial zones. In addition to industrial zones, priority is given to large projects that produce great impacts on socioeconomic development, investment projects in poor areas, and projects of peculiar nature that cannot be located in industrial zones.

Industrial products: Electronic and electrical component and equipment manufacturing, with priority for industrial electronics, consumer electronics, telecom and computer products with Vietnamese brands, mobile phones and electronic components for production and export; mechanical engineering, equipment manufacturing and metal processing, with focus for manufacturing molds for electrical, electronic, and automotive industries; motorbike; engines, agricultural machines and machines for agricultural processing; software production; high-tech chemical and pharmaceutical manufacturing such as nanotechnology and biotechnology; agricultural and forest product processing for export and domestic consumption.

Trade and service: Focusing on developing high-value added service industries such as finance, banking, insurance, post, telecom, logistics, healthcare, resort, ecotourism, sports and entertainment, and high-class hotels  in Bac Giang City. Priority is given to attracting investors to implement tourism projects like Suoi Mo Tourist Area (Luc Nam district), Cam Son and Khuon Than Lake Eco Resort Area (Luc Ngan district), and recreational, leisure and spiritual tourism area (Nham Bien Mountain, Yen Dung district).

Agriculture: Preservation, downstream processing, fine processing and high-tech processing development projects to increase the added value of agriculture, forestry and fishery.

While the overall score of PCI and nine PCI component indices advanced in 2022, the Market Entry Index slipped (from 6.76 to 6.65 points). What is the cause for this retreat? How has the department advised and acted to improve this subindex?

In 2022, nine out of 10 PCI component indices of Bac Giang province advanced in scores and rankings. Especially, the Informal Charge Index and the Legal Institutions and Security Index led the country. However, only the Market Entry Index declined 6.76 points to 6.65 points, thus losing its standing.

Notably, some indicators were not appreciated by enterprises. For example, up to 6.25% of enterprises surveyed said that they have to wait more than three months to complete all procedures to officially go into operation (ranked 60th out of 63 provinces and cities), while only 24.59% of respondents said that public employees guide conditional business licensing procedures clearly and completely (ranked 47th out of 63 provinces and cities). These are key drivers for this index. These important indicators need to be addressed in the coming time. This proved that the reform of administrative procedures in business licensing has not really improved. Companies still need a long time to complete necessary procedures to enter the market.

To overcome the above limitations, the Department of Planning and Investment advised the Provincial People's Committee to open a workshop on “Detailed analysis of PCI 2022 component indicators” to figure out existing limitations to work out an effective PCI upgrade plan. In 2023, the province clearly assigned tasks to relevant agencies to further upgrade PCI component indicators.

For this part, this year, the department submitted to the Provincial People's Committee to launch Plan 123/KH-UBND dated July 3, 2023 on improving the Market Entry Index and the Fair Competition Index in 2023. Key tasks of this plan were assigned to leading units. Quarterly, the department will urge, inspect and supervise them to ensure the performance and schedule achieved as planned.

Thank you very much!

Source: Vietnam Business Forum