Hoa Binh and PCI 2013 Ranking Lessons

3:50:49 PM | 3/9/2014

A surprising change in the Provincial Competitiveness Index (PCI) 2013 ranking announced by the Vietnam Chamber of Commerce and Industry (VCCI) in March has left much to be pondered. For Hoa Binh province, PCI 2013 ranking is a shock indeed, as it plunged from 41st position in 2012 to 62nd position.
According to VCCI, the PCI ranking of Hoa Binh province continuously climbed from 2010 to 2012, gaining 13 places in 2011 and six places in 2012, but it slipped 21 places to 62nd position out of 63 provinces and cities surveyed nationwide in 2013.
Among 10 component indices, only legal institution index was rated good, while land access and transparency indices were assessed as fairly good, and other indices like market entry costs, time costs, informal charges, business support services, labour training, equal competition and provincial leadership pro-activity were low. The long slip in PCI 2013 revealed bottlenecks which needed to be addressed to make the investment environment better.
However, in practice, surveyed companies remained hesitant when they made recommendations and reflected difficulties and problems at major business meetings and dialogues or when they faced difficulties and obstacles in doing business. They did not know clearly who to contact for solutions. Many companies did not complain about State services to relevant bodies in reality to seek solutions, but did it on survey forms. Indeed, this affected the degree of honesty and confidence in business environment improvement. On the other hand, supplements and amendments to policies did not fit realities. Hence, many policies became backward immediately after they were issued. Besides, critical comments and opinions of business representative organisations remained superficial, perfunctory and generic and lacked reality and professionalism. Thus, business-related issues like policy transparency, time costs, informal charges, business support services and labour training support were not regularly reflected to relevant State agencies.
PCI improvement is not only the task of authorities, but also the responsibility of business representative organisations and enterprises themselves. Then, PCI improvement will be effective and sustainable.
In 2014, Hoa Binh province set up the Steering Committee for Business Investment Environment and PCI Improvement, chaired by the Chairman of the Provincial People's Committee, and established the Assistant Board to the Steering Committee (the Assistant Board is the Department of Planning and Investment).
To improve PCI, the government of Hoa Binh province needs to know how businesses feel what local authorities are doing. Then, they will know their weaknesses and the degree of difficulty of applying appropriate solutions and know current desires of enterprises to provide better services for them to boost business motivations and approach investment and business opportunities.
By selectively listening opinions of businesses, to improve the investment and business climate in 2014, Hoa Binh needs to act to: Improve the operating quality of one-stop source agencies and units; publicise all procedures and documents and provide for enterprises for free; further enhance information transparency to enable enterprises to access planning and legal information. The province will also need to improve human resources training and planning towards 2020, set up and coordinate recruitment centres in districts and industrial zones to connect and support enterprises to recruit workers. Besides, the province will also intensify inspection and supervision on civil servants and officials and abolish unnecessary procedures that hinder investment and business activities of enterprises.
The province will also ensure equal competition and non-discrimination for all enterprises regardless of economic sectors. Authorities will hold regular thematic dialogues with businesses to listen to their complaints and feedback on specific fields to create the best solutions. The province will also seek to reduce the time required for business registration and land ownership approval to less than 30 days. It will also try to reduce the time required for tax payment and facilitate enterprises to access scientific and technical services, legal advice, partner search, employment, and training services.
Thanh Loan