Vinh Phuc Set to Improve PCI Ranking in 2023

9:56:15 AM | 15/8/2023

To achieve the goal of maintaining its position in the Top 10 localities with the best governance quality in Vietnam and becoming an attractive destination for domestic and foreign investors, the Vinh Phuc Provincial People’s Committee recently issued an action plan for improving the Provincial Competitiveness Index (PCI) in 2023. The plan proposes many solutions to further enhance its PCI ranking.

Vinh Phuc province receives the PCI trophy and certificate of recognition as one of the best performers in the 2022 PCI rankings

According to the Provincial Competitiveness Index (PCI) in 2022 released by the Vietnam Chamber of Commerce and Industry (VCCI), Vinh Phuc province ranked 8th out of 63 provinces and cities across the country, scoring 68.91 points, a decrease of 0.78 points and a decline of 3 ranks compared to those in 2021. Although the province met its target (standing in the Top 10 with the best governance quality), it experienced a setback in both scores and rankings. Among 10 subindices, only two improved in scoring and standing (Transparency, Legal Institutions, Security), one index reduced scores but rose in the rankings (Business Support Services), seven deteriorated in scoring and standing (Market Entry, Land Access and Security of Tenure, Time Costs and Regulatory Compliance, Informal Charges, Fair Competition, Proactivity of Provincial Leadership, Labor and Training).

There are various reasons for these declines. Companies were dissatisfied with information; task leadership, direction and implementation; State administration and administrative reform when they performed administrative procedures and dealt with new business problems. They had to incur additional expenses such as travel costs, labor costs and consulting costs, leading to an increase in unofficial costs. The Land Access Index was one of the best performers in the province in 2021 when it soared 54 places to 7th position out of 63 provinces and cities. However, in 2022, this indicator dropped 24 places to No. 31 with 6.99 points, a decrease of 0.57 points (thus failing to meet the Top 10 target). This indicated that Vinh Phuc would need drastic solutions to tackle shortcomings and obstacles in land access for businesses.

After many years of improvement, the “Labor and Training” Index plunged 10 places to No. 17 in 2022, scoring 6.07 points, a reduction of 0.74 points over 2021, implying that the province’s labor training and labor quality are deteriorating. According to some businesses, the province’s job counseling and introduction in 2022 surpassed that in previous years, but did not match actual market needs. The link between employers with schools and employment service centers remained weak, requiring relevant authorities to have breakthrough solutions for better performance because this is one of the highly weighted indicators.

To enhance the investment environment, the image of the province in the business community, and the domestic and foreign investors, and to create a momentum for investment attraction, business development and socioeconomic development in 2023 and beyond, the Vinh Phuc Provincial People’s Committee has directed relevant agencies and localities to develop specific plans for PCI improvement under their authority and assigned this as a key task and responsibility of the political system. The province has set out several new requirements and tasks, such as: Strengthening the roles and responsibilities of leaders; implementing digital transformation tasks and solutions in line with administrative reform, and focusing on solutions to increase readiness to adapt to new production in the fourth industrial revolution.

The province has also required them to publicize planning information, laws and regulations in a public and transparent manner to enterprises, especially those related to their interests; addressing difficulties and challenges for enterprises, especially in land, labor, tax and procedural issues; enhancing information, communication, promotion and information technology application to provide timely information of interest to investors and enterprises.

By Hoang Tham, Vietnam Business Forum