“What will administrative procedures in Vietnam be like in the future?” This is a question and a major concern for many local and foreign enterprises in Vietnam. Complicated administrative procedures represent a great concern for any enterprise as they lead to increased production costs, thus resulting in enterprises’ low business effectiveness, even losses. The National Assembly adopted the Unified Enterprise Law and the Common Investment Law. However, concerns about complicated administrative procedures to be created after the two laws take effect still remain.
According to recent research results released by the Central Economic Management Institute, costs for the implementation of administrative procedures in poor countries are often three fold higher than in rich countries. The number of administrative procedures in poor countries doubles that of rich countries. In Vietnam, according to the World Bank’s survey, it takes 63 days and 29.9 per cent of per capita GDP to complete business procedures. This means that it is a long path from business ideas to reality. Incorrect implementation of the law leads to complicated administrative procedures. Legal regulations on administrative procedures are sometimes complicated and unsuitable. For example, to apply for land allocation, enterprises have to complete at least seven procedures in up to 230 days. There have been examples of enterprises, which had to get 40 stamps and signatures to complete their land rent procedures. This is a not an unusual scenario, when it takes enterprises around three years to get land for their business and production activities. In some cases, enterprises miss business opportunities, which leads to bad feeling.
As it stands, land allocation for projects is decided on other criteria but not on the basis of their socio-economic effectiveness. This has opened up opportunities for corruption and other illegal activity. This is because, projects have many business ideas and it is difficult to develop concrete criteria for State management agencies to evaluate their socio-economic effectiveness. Enterprises, in fact, face many difficulties to complete not only each procedure but also a system of procedures. Certain procedures can be completed only after other procedures are completed. For example, enterprises can buy bills after they are granted with tax codes. It is more difficult for enterprises to print their bills than to buy bills in the market. As a result, any difficulty in completing a procedure may produce an effect on the whole system of procedures.
The ‘one-door’ mechanism is considered as an effective solution for administrative reform, but it has not been applied fully and uniquely yet. In some localities, the mechanism has become a barrier, costing enterprises a lot of time, because the ‘one-door’ mechanism acts as an entry point for procedures only. For reforming procedures relating to activities of enterprises, experts say that Vietnam should build and publicly announce a list of conditioned businesses. The list should be reconsidered after one year or at the request of any individual and enterprise when problems emerge. The Government, in turn should conduct comprehensive research to evaluate its business licences and conditions. Accordingly, the Government should stipulate businesses which are to be allowed or disallowed
At present, many State agencies do not eschew co-operative behaviour. Therefore, it is very important that administrative reform is promoted to encourage co-operation among State agencies on a basis of clarifying their own responsibilities within a transparent legal system. Authorised agencies should change their attitude towards enterprises, helping and guiding them to observe the law.
From this point of view, the Unified Enterprise Law and the Common Investment Law approved recently by the National Assembly should create any backward step in administrative reform. Oliver Massmann from the Baker & McKenzie Company said that the two laws should not interfere with enterprises’ internal affairs, including regulations on salary and bonus. Investors should be free to negotiate with each other on issues relating to their enterprise’s organisation and management. Many enterprises have expressed the wish that the two laws should be merged into one to create more favourable conditions for business activities. More importantly, enterprises focus only on how to implement their projects and perform their investment correctly in a context that many State agencies cannot follow administrative reform.
Kim Phuong
Vietnamese
