Danang tops PCI 2013 ranking

PCI 2013, released by the Vietnam Chamber of Commerce and Industry (VCCI) Thursday in Hanoi, also showed the central coastal region saw two of its provinces joining the excellent tier, including Thua Thien-Hue (65.56, second runner-up) and Quang Ngai (62.6 at seventh place).

Meanwhile, many Mekong Delta provinces maintained good performance as in previous PCIs, with up to three provinces taking places in the seven-member Excellent tier, including Kien Giang (63.55, third place), Dong Thap (63.35, fifth place) and Ben Tre (62.78, sixth place). Quang Ninh for the first time clinched its top four ranking at 63.51.

Positively, economic hubs in the country all increased their rankings, with Ho Chi Minh City moving up three slots to join the Top 10 echelon. Hanoi leaps 18 places, ranking at 33rd place against the 51st position in PCI 2012. Among the lowest ranking group are northern mountainous provinces, according to the report.

“Provincial governance across Vietnam is showing positive trends. The core PCI index (including consistent indicators dating back to 2006) has been on a rise and culminates in 2013 at 47 points,” said the report.

While the Vietnamese economy is showing some signs of revival, data shows that private firms continue to struggle. Only 6.4 per cent of firms increased their investment size, and only 6.2 per cent of operations added labor in the past year. The pessimism is on-going as only 32.5 per cent of respondents plan to expand their operations in the next two years.

The findings of the PCI-FDI survey on 1,609 foreign businesses shows that Vietnam has advantages over its competitors in terms of policy stability, business involvement in policy-making, low expropriation risk and reasonable tax burden.

However, foreign investors ranked Vietnam below its competitors in regard of informal costs, regulatory burden, public services and quality of infrastructure. This year’s report pointed out that a less volatile and more predictable tax policy will reduce transfer mis-pricing for tax purposes by foreign operations in Vietnam.

The index is developed by a team of international and national experts from VCCI with the support of USAID. PCI 2013 was conducted on 8,093 domestic private enterprises across 63 cities and provinces in Vietnam and 1,609 foreign invested businesses in 13 cities and provinces which gather a big number of FDI enterprises.