11:08:32 AM | 6/6/2006
Southern Binh Duong province has continued to be the country’s most competitive province for the second year running, according to a survey by the Vietnam Chamber of Commerce and Industry (VCCI) and the USAID-funded Vietnam Competitiveness Initiative (VNCI).
Binh Duong obtained the best Provincial Competitiveness Index (PCI) 2006 with a score of 76.2 on a 100-point scale, followed by central Danang city with 75.39 points, leaving the country’s two major economic hubs Hanoi and Ho Chi Minh City far behind.
Ho Chi Minh City’s PCI this year has substantially improved with a 63.4 score, ranking seventh, up from 17th last year, while Hanoi’s ranking has surprisingly declined to 40th with 50.5 points, far behind last year’s 14th place, despite growing investor interest in the capital city.
The PCI survey this year clearly shows that small and medium enterprises (SMEs) in Hanoi remain unhappy about a number of business environment issues. The city’s all sub-indices, except transparency, have fallen.
Provinces that emerged strongly on the new index included central Binh Dinh province, and the Mekong Delta provinces of An Giang and Dong Thap. Binh Dinh has risen from 12th in last year’s index to 3rd this year. An Giang also leaps to the 9th position from last year’s 34th.
A notable surprise is the mountainous province of Lao Cai. This is the first time the province has been included in the assessment, but it stands out on the list with 64.11 points, taking the sixth position. Most other northern mountainous provinces, in comparison, are in the bottom half of the index.
The Mekong Delta province of Vinh Long takes the fourth position on the list. Southern Dong Nai province has replaced northern Vinh Phuc province to take the fifth position in the ranking this year.
The five provinces that have the lowest rankings this year including Lai Chau, Dak Nong, Ha Tay, Kon Tum and Dien Bien with respective scores of 36.76; 38.91; 40.73; 41.38; 42.28. Last year, Ha Tay was at the bottom of the list.
However, the survey’s experts recommended that provinces should not be too pre-occupied with their individual rankings, as small changes in scores can lead to significant changes in rankings. They said “for example, an increase as small as 0.5 per cent can in some places lead to significant changes in rankings”.
The survey said that provinces should instead focus on improving their absolute scores in both the sub-indices and the PCI, which will push overall scores toward the perfect 100.
The 2006 PCI polled over 6,300 Vietnamese private sector firms in all 64 provinces, enabling them to voice their concerns and experiences with their respective provincial governments.
In 2005, the first PCI was released based on the perceptions of 2,020 businesses across 42 provinces and quickly became an important tool to identify and drive areas in need of regulatory, policy, and governance reform.
The PCI rates provinces on a 100-point scale in an effort to explain why some parts of Vietnam perform better than others in terms of private sector dynamism and growth.
Like last year, the PCI assesses and ranks provincial governments by their treatment of and attitude toward private business. There are certainly a range of other factors that can influence an entrepreneur’s desire and commitment to invest or do business in a particular province, such as the size of the provincial economy, infrastructure, human resources and location.
P.V
Vietnamese
