Hanoi: Efforts Added to Improve Business Environment

After ongoing efforts to improve the business and investment environment, for the first time in the 12 editions of the Provincial Competitiveness Index (PCI) launched by Vietnam Chamber of Commerce and Industry (VCCI), Hanoi stepped into the group of localities with good governance. Vietnam Business Forum has an interview with Mr Tran Ngoc Nam, Deputy Director of the Hanoi Planning and Investment Department. Le Hien reports.

 

According to VCCI’s report, Hanoi’s PCI went up 1.74 points to reach 60.74 points in 2016, ranked 14th out of 63 provinces and cities, a high jump of 10 places from 2015. 2016 was the 4th consecutive year Hanoi's PCI looked up and marked its all-time high. 2016 was also the first year that Hanoi entered the group of well-governed provinces/cities. VCCI admitted that in 2016 Hanoi focused on strengthening discipline and administrative discipline to raise personal accountability and responsibility.

These initial efforts have been recognised by the business community, most visibly seen in the improvement of time expenses and formal expenses. The PCI 2016 result highlighted the efforts of authorities to the business community and also affirmed business trust in the business and investment environment of Hanoi. The PCI 2016 survey found that the private sector’s sentiment to the Hanoi government looked up by 7.3 per cent over 2015. The “business registration duration” was reduced by two days from 2015. The transparency of planning documents and budget documents also increased significantly.

 

In 2017, the city will continue to endeavour to jump into the Top 10 group by PCI rankings by 2020. Hence, this year was defined as a year of administrative discipline. The city will continue to review and simplify administrative procedures and abolish unnecessary ones.

 

In 2016, based on the task of improving the investment and business environment, business support and development according to the spirit of the Government Resolution 35/NQ-CP and Hanoi’s Commitment to VCCI on formation of a favourable business environment for enterprises, Hanoi deployed drastically from the city to the grassroots level. The city carried out beyond its commitment contents announced at the meeting between the Prime Minister and Enterprises themed “Vietnamese Business - Driving force for national economic development” on April 29, 2016 under the witness of the Prime Minister and the business community.

 

2016 saw an all-time record of new business start-ups. Results of commitment contents included increasing dialogues between authorities and businesses, allowing businesses to contribute opinions on policymaking of the city and coordinating with VCCI to host business dialogue twice a year.

 

Besides, the city vigorously stepped up reform of business-related administrative procedures such as business registration, tax code, social insurance, customs, electricity access and credit access towards a so-called one-stop single-window mechanism and then towards electronic single-window mechanism. Electronic filing was settled in two days (33 percent shorter than the regulation) while written document filing was settled in the day at business registration agencies. Up to 64 per cent of business registration cases were made online, higher than the target set in the Government Resolution 36a/NQ-CP. 98 per cent of companies declared tax electronically. The city also piloted inter-agency settlement of investment and business registration procedures, thus reducing the service time by from 20-60 per cent.

 

Hanoi also reduced the clearance time for green-labelled shipments to just 3 seconds (green-labelled commodities at Hanoi customs checkpoints accounted for more than 51 per cent, thus bringing clear benefits for enterprises thanks to shorter time and less resource spent on customs clearance. The city simplified 61 administrative procedures and reduced the execution time by 30 - 50 per cent (accounting for 67 per cent of total administrative procedures reviewed), thus easing their access to land for their projects.

 

Nevertheless, Hanoi confronted certain difficulties and challenges in making its investment environment better. The city had to ensure rapid and sustainable growth while guaranteeing social security, improving living quality and protecting the environment. Hanoi assured citizens and enterprises of fairness, quickness and convenience in accessing public services in all regions although workload was still enormous.

 

But, Hanoi had certain unique characteristics that led to lo much longer waiting than other localities when investors access land, planning and legal institutions. PCI results in the past years reflected this reality.