Rises and Falls of Binh Duong PCI

4:16:46 PM | 10/7/2018

Binh Duong usually ranks among top recipients of investment capital. However, its Provincial Competitiveness Index (PCI) is volatile, not as stable as investment attraction results.

Superb breakthrough in 2016
According to the report by the Vietnam Chamber of Commerce and Industry (VCCI), Binh Duong ranked among the Top 6 provinces and cities by administration quality in 2016. Therefore, its PCI climbed 21 places over 2015 by adding 4.68 points (compared with 58.15 points in 2013, ranked 30th place; 58.82 points in 2014, ranked 27th and 58.89 points in 2015, ranked 25th).

According to Mr. Tran Thanh Liem, Chairman of the Binh Duong Provincial People’s Committee, the PCI of Binh Duong province looked up on consistent, serious and effective implementation of directions the government and central authorities. The province put forward many innovative solutions to consistently and effectively implement central tasks of administrative reform to reduce the time required for business registration for enterprises, publicise and guide administrative procedures at single-window units and raise professional capacity of civil servants.

With the inauguration and operation of the Binh Duong Public Administrative Centre, administrative procedures relating to business registration and granting of land-use rights certificates and construction permits are settled quickly. At the same time, the service attitude of government officials has been improved considerably and the confidence of the people and businesses has been boosted to improve the business environment and stimulate enterprises to expand business investment.

Regarding informal charges, Mr Nguyen Thanh Truc, Director of Binh Duong Department of Planning and Investment, said that this is one of surveyed indicators with significant progress when businesses are more optimistic about five indicators to this effect than in 2015. This proved that the business environment is gradually better and more transparent. The ratio of companies spending more than 10 per cent of revenue on informal charges dropped considerably and stood below the national average.

“The PCI 2015 saw restrictions in employee training. After conducting serious review and addressing existing weaknesses, the PCI 2016 witnessed a pickup in labour training and companies spent less on employee training than earlier,” he said.

Improving competitive fairness was a helpful factor for better PCI performances of Binh Duong province in 2016. The local business community saw progress in access to land, administrative procedures, preferential policies and support for the private sector.

Sudden drop in 2017
Although the administrative reform index of Binh Duong, assessed by the Ministry of Internal Affairs every year, is among top performers, Binh Duong suffered a sharp decline in 2017 to 14th place, from 4th. This unexpected result did not reflect the province’s efforts.

According to the PCI 2017 released by VCCI, Binh Duong province scored 64.47 points, an increase of 0.9 points over 2016, but it dropped 10 ranks to 14th. Among 10 Southeast provinces, Binh Duong ranked second, just behind Ho Chi Minh City. The province’s score was 6.22 points lower than the top-placed locality (in 2017, the PCI score ranged from 55.12 points to 70.69 points).

Among 10 component indices of the PCI 2017, Binh Duong saw six pickups: Land access and security of tenure, time costs and regulatory compliance, proactivity of provincial leadership, business support services, legal institutions, and fair competition. Meanwhile, four indices dropped, including market entry costs, transparency and access to information, informal charges, and labour and training. In particular, the Provincial Governance and Public Administration Performance Index (PAPI) 2017 of Binh Duong province had a total score of 33.49 points, ranked lowest.

The decline in the PCI of Binh Duong province was attributed to the shallow awareness of people and grassroots authorities of legal policies, ineffective technical training policies for enterprises, especially FDI firms.

Many practical solutions
To deal with existing limitations and uphold inherent strengths to raise its PCI performance, Binh Duong province has implemented many practical solutions. Mr Nguyen Thanh Truc, Director of the Department of Planning and Investment, said that the province has focused on some key tasks like seeking to reduce the time required for business registration in line with the law and commitments between the Provincial People’s Committee and VCCI. Binh Duong has also regularly organised communication programmes on labour laws, provided legal information and knowledge for enterprises; sought to shorten the time needed to settle administrative procedures concerning the granting of land-use rights certificates and annual land price list to ensure harmonious interests of all stakeholders.

At present, the province is enhancing the quality and effect of its websites to enable companies to easily access its business support policies, planning documents, announced plans and budgets. The province is also providing a forum for people and enterprises to exchange and criticise policies; speeding up the process of guiding or solving online administrative procedures; conducting studies to seek better performance of the single-window mechanism in a modern, friendly, open and transparent manner; and accelerating information technology application to facilitate people and enterprises to carry out necessary administrative procedures.

In addition, the province is reviewing and reducing procedures to further assist enterprises, conducting appropriate tax inspections, strengthening supports for business associations to carry out practical trade promotions and for enterprises to advertise and introduce their products on domestic and foreign markets.

Giang Vy