Accelerating Reforms to Foster Conducive Business Environment

9:35:16 AM | 3/21/2024

Resolution 02/NQ-CP of 2024, which outlines the primary tasks and solutions for enhancing the business environment and bolstering national competitiveness, is anticipated to bolster the confidence of investors and businesses. Furthermore, it is expected to stimulate motivation and entrepreneurship, thereby catalyzing economic recovery and development.

Delegates at the workshop “Implementing Resolution 02/NQ-CP: Reform to Support Business Development”

The Government committed to accompanying businesses

At the workshop “Implementing Resolution 02/NQ-CP: Reform to Support Business Development”, Dr. Tran Thi Hong Minh, President of the Central Institute for Economic Management (CIEM), said that the Ministry of Planning and Investment has been advising the Government to issue annual resolutions aimed at improving the business environment and enhancing national competitiveness (Resolution 19/NQ-CP and Resolution 02/NQ-CP) since 2014.

In 2023, the Government included the task of business environment reform into Resolution 01/NQ-CP on main tasks and solutions to carry out the Socioeconomic Development Plan and the State Budget Estimation, improve the business environment and enhance national competitiveness in an attempt to affirm that the business environment was a task in socioeconomic governance and development. Because it was only one of many general tasks in Resolution 01, the degree of interest and motivation for reform of central and local bodies was not as high as previously. Meanwhile, in 2023, businesses confronted many difficulties and 2024 was forecast to bring more difficulties than advantages. Therefore, the Government restored the Reform Program to improve the business environment by introducing Resolution 02 dated January 5, 2024 to create pressure and motivate reform efforts at central and local agencies.

In Resolution 02, the Government continued to conduct reforms in line with international practices. In particular, it defined seven key task groups in 2024 and aligned them with specific responsibility of relevant central and local agencies. These groups of solutions were designed to resolve specific problems and shortcomings that hindered investment and business activities of enterprises.

“The return of the Resolution carries the message that improving the business environment is a key priority task, demonstrating the Government's degree of concern and companionship with the business community, thus pinning expectations on strengthening the confidence of investors and businesses and stimulating business motivation and entrepreneurship to accelerate economic recovery and development," Minh emphasized.

Focused reforms

Remarking on the economic outlook in 2024, Deputy Minister of Planning and Investment Tran Duy Dong said, entering 2024, besides advantages, Vietnam will continue to face many difficulties and challenges. Therefore, solutions to improve the business environment need to be considered one of the key tasks at all levels and make stronger enforcement efforts.

He requested leaders of central and local agencies to specifically define goals, tasks and action roadmaps and clearly assign working responsibilities. Implementation must be serious and complete with assigned tasks.

Dialogues and exchanges with people and businesses need to be more substantive and more frequent, he said, adding that it is essential to immediately tackle difficulties for them. Industry associations and the business community need to actively participate in policy criticism and policymaking; put forth policymaking and enforcement recommendations to ensure effective administration while creating convenience and safety for production and business activities.

Speaking of the business environment in 2024, Dr. Nguyen Minh Thao, Director of the Business Environment and Competitiveness Research Department, CIEM, said that Vietnam's business freedom ranking was medium in 2024. The business environment is still exposed to many challenges. Barriers to industry and business registration remain major obstacles, resulting in increased compliance costs and reduced investment and business motivations.

In this very challenging context, in order to improve the business environment, strengthen trust and create a strong fulcrum for businesses, it is necessary to arouse the motivation and companionship of many stakeholders. Regular and continuous direction from the Government is necessitated to create pressure to speed up reforms.

From a business perspective, Mr. Dau Anh Tuan, Deputy General Secretary, Director of the Legal Department, the Vietnam Chamber of Commerce and Industry (VCCI), said that the business environment has undergone numerous transformations: The streamlining of documents and procedures, the reduction in procedure settlement times, the increased prevalence of electronic methods, and the prompt amendment of numerous business regulations. From 2021 to 2023, a total of 2,483 business regulations encapsulated in 201 legal documents were reduced and simplified. Furthermore, the Prime Minister endorsed a plan to reduce and simplify an additional 1,191 business regulations across 221 legal documents

However, some plans to reduce and simplify business conditions are still ineffective while many problems reported by businesses have not been considered, he said. Therefore, Resolution 02 and business expectations for “quality of enforcement” and reformed business environment need to be implemented effectively and substantively.

In addition, there needs to be a mechanism to create enforcement motivation while promoting more widespread and substantive consultations, he added.

From the local perspective, Dr. Nguyen Phuong Bac, Director of the Bac Ninh Socioeconomic Development Research Institute, said, as FDI capital flows into Vietnam have kept rising, it is necessary to further support businesses in the long term, at least in 2024 - 2025 in VAT support. Moreover, it is necessary to study and supplement business support policies to accelerate digital and green transformation.

“Reform must become a daily practice and culture. There needs to be a mechanism to handle and sanction agencies failing to execute the Government’s directions in carrying out the resolution,” he stressed.

By Thu Ha, Vietnam Business Forum