Improving Lang Son Investment and Business Environment: From Words to Action

4:08:51 PM | 1/10/2015

Lang Son has made great efforts to improve the investment and business environment and enhance the provincial competitiveness index (PCI) over the past years, but the results failed to meet expectations. To learn about this issue, Vietnam Business Forum has an exclusive interview with Mr Nguyen Van Binh, Vice Chairman of Lang Son Provincial People’s Committee.
2015 is the final year to implement the Resolution of the 15th Provincial Party Congress and the 5-year development plan in 2011-2015. How do you assess administration works and achievements of the province in the last five years?
In the 2011-2015 period, like other provinces and cities across the country, Lang Son has faced numerous challenges: Complicated global economic development, volatile economic growth recovery, rising inventories, lacklustre real estate market and growing corporate bankruptcies and stagnations. Soon seeing these threats, Lang Son province exerted its forces to seek out socioeconomic development measures and achieve positive socioeconomic results.
First, although the economic growth missed expectations, the average annual growth of 8.65 per cent was reasonable against the backdrop. Specifically, agriculture and forestry sectors increased by 3.62 per cent, industry and construction sector expanded 9.86 per cent; and service and trade sectors enlarged 10.76 per cent. Exports climbed 16.78 per cent a year on average. State budget revenues rose rapidly, at 18.18 per cent a year. Local investment resources were concentrated for infrastructure development. Many big projects have been completed and put into effective use. Every year, Lang Son manufactured some 300,000 tonnes of food crops while planting nearly 10,000 ha of forests, bringing the forest coverage rate to 54.5 per cent in 2015. Planning work was publicised. Social security was guaranteed. Livelihoods of people especially those in remote and border areas, were improved.
However, socioeconomic development still posed some limitations. The province has spared no efforts to mobilise additional funds, but these funds still fail to meet the demand for development investment. Many enterprises are now facing difficulty in production, sales and marketing; the quality of many goods and services is well below par regarding fiercer competition and integration.
- Results of new rural construction have been uneven with progress being slower than planned; contribution from the community is still modest, heavily depending on state investment; slow pace of implementing assistance projects, scaling up production models.
- Some organisations in charge of land rent fail to manage the land efficiently.
- The province is still encountering difficulties in maintaining security, social order; ensuring traffic safety; fighting against smuggling and commercial fraud.
Implementation of administrative procedures does not work well.
Over the past years, Lang Son province has endeavoured to improve the investment and business environment and enhance its competitiveness but the results missed expectations. How do you think about this?
The province is paying a greater attention to improving the business environment and enhancing competitiveness. In recent years, seeing that the provincial competitiveness index (PCI) is a good reference channel for the province to see its service to the business community, after VCCI releases the PCI reports, the Lang Son Provincial People’s Committee gathers to discuss the overall index and component indices, assess strengths, limitations and causes to the current ranking. On that basis, the province issues documents to direct its subordinated departments and localities to seek ways and solutions to raise PCI. The province also adds contents of improving the investment and business environment and enhancing the competitiveness to its administration contents. However, since the Vietnam Chamber of Commerce and Industry (VCCI) published PCI reports (in 2006), Lang Son province is usually ranked quite low among 63 provinces and cities. The province’s PCI was rated relative low to low in six years and only assessed good in 2012.
There are many causes blamed for that reality. Even previously, the low ranking was attributed to typical difficulties of a border-sharing mountainous province, poor infrastructure, and small operating scale of local enterprises among others. However, those were objective factors with strong but not decisive impacts. The core reason was a vast majority of civil servants did not understand PCI methodologies clearly and they were vague about component indices too. Hence, State agencies from provincial to district levels did not know how important PCI to development is; thus, they performed their tasks superficially. These factors plus limited economic governance capacity and unsatisfactory personnel qualification harmed the investment environment and damped the confidence of businesses and citizens in State management agencies.
To address this situation, on July 15, 2014, the Provincial People’s Committee issued Plan 61/KH-UBND on improvement of business environment and PCI in 2014, which specified every item of component indices and assigned tasks for specific agencies, departments and localities. The Provincial People’s Committee also assigned the Department of Planning and Investment to lead and inspect the implantation of the plan and proposed solutions to emerging troubles to the Provincial People’s Committee at regular meetings. After one year of implementation, the province has seen progress in efforts in improving the business environment and raising PCI. In 2014, Lang Son province climbed five places on the PCI rankings in 2014 over 2013 (from 59th place to 54th place). Some component indices gained high scores, particularly market entry, labour training and dynamism of local government. The Lang Son Provincial People’s Committee promulgated Plan 88/KH-UBND on major measures to continued improvement of the business environment and PCI in 2015-2016.
Do you have any sharing and commitment to improving the investment and business climate of Lang Son province in the near term?
Improving the business environment and the competitiveness is becoming more urgent than ever. At the national level, the Government issued Resolution 19 on major tasks and measures to continued improvement of the business environment and national competitiveness in 2014-2015 and 2015-2016. In fact, enhancing the investment and business environment requires specific solutions to coerce civil servants in charge to follow instructions. Otherwise, they will possibly disable the progress of reforms launched from their leaders.
In the past years, the Provincial Party Committee, the Provincial People's Council and the Provincial People's Committee of Lang Son have organised many activities to elevate its PCI rankings. However, the results did not come up to their expectations. This showed that the province would need more drastic actions to make the change. Thus, in the coming time, officials in charge must lead their units to work effectively to fulfil their tasks. They must assign capable cadres to meet and serve businesses and citizens.
The Provincial Party Committee, the Provincial People's Council, and the Provincial People's Committee of Lang Son always appreciate and acknowledge contributions of local businesses and entrepreneurs in the locality. Provincial leaders actively support local companies to tackle their troubles. The Provincial People’s Committee will host meetings and dialogues with businesses to build up their trust in the local investment and business environment.