Provincial trio topping PCI rankings

May 05, 2022 | 09:38

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Despite the remarkable improvement of Vietnam’s cities and provinces to enhance competitiveness, many issues are remaining for them to lure in more investment.

Source: Vietnam Chamber of Commerce and Industry

Last week’s 2021 Provincial Competitiveness Index (PCI) report, released by the Vietnam Chamber of Commerce and Industry (VCCI), revealed that Quang Ninh, Haiphong, and Dong Thap were the most improved localities last year.

All three have facilitated business performance and boosted administrative reform in favour of private sector development.

In Quang Ninh, Viet Hung Industrial Park Development JSC was, for the first time, granted an investment certificate within only 24 hours.

“We are impressed by the administrative procedure reform of Quang Ninh and the strong direction of the provincial People’s Committee and relevant authorities to support investors,” said CEO Dao Phong Truc Dai.

The province has provided 1,600 online public services at levels three and four, and 555 procedures have been integrated into the national public services portal. The time for administrative procedures has been shortened, so the satisfaction of people and businesses improved significantly, reaching 99.7 per cent at the provincial level and 99.9 per cent at the district level.

Meanwhile, second-placed Haiphong was the leading city in attracting foreign direct investment (FDI) in 2021 with a total of $5.26 billion.

Suk Myung Su, CEO of LG Display Vietnam Haiphong, said that despite numerous industrial zones (IZs) across the country, the company chose Haiphong because of the strong assistance from the local government. “We took three days only to accomplish all administrative procedures for granting an adjusted investment registration certificate worth $1.4 billion. This is unprecedented,” said Su.

Carrying into this year, numerous investors have been looking for opportunities in the city’s IZs. In January alone there were several newly-granted and adjusted projects at VSIP, DeepC, and Nam Dinh Vu Industrial Park.

Also being highly appreciated for its competitiveness, the Mekong Delta province of Dong Thap has remained in the top three of the PCI rankings for many years. In 10 PCI subindices, the province boasts high scores in entry costs, land access and tenure, transparency, time costs, informal charges, and law and order.

Regarding business support services, Nguyen Anh Ngoc, chairman of Marine Functional Vietnam, said that the establishment of a business meet-up model in Dong Thap has enabled businesses and local leaders to further understand each other, as well as for the business community to discuss and share experiences. “Thanks to this model, hundreds of businesses have contributed ideas for the socioeconomic development of the province,” said Ngoc.

Dong Thap People’s Committee and the province’s relevant agencies have developed numerous solutions and initiatives related to administrative reform to satisfy businesses. For example, the time for procedures of establishing land allocation, land lease, and changing land use purposes has been shortened to nine working days.

“It is quite hard to receive the trust of businesses, but even harder to maintain that and level up. We should deliver specific commitments to create the most favourable conditions for businesses to realise investment opportunities, utilise their advantages as much as possible, and compete in a fair way to build and develop strongly and sustainably,” said Nguyen Xuan Ky, Secretary of Quang Ninh Party Committee.

The foreign-invested enterprise (FIE) survey in the 2021 PCI report found that FIEs remain positive about Vietnam’s business landscape. A lessened inspection burden was reported, alongside relatively positive perceptions in some areas of regulatory compliance. Informal charges continued to decline, while labour and infrastructure quality have improved significantly over time.

“To remain an attractive destination for foreign investment, Vietnam should put more reform efforts on tax, fire safety, import/export, investment registration, and social insurance procedures,” said Edmund Malesky, head of the PCI research team. “More facilitation is needed in the procedures to implement construction investment projects, including the procedures to obtain a construction permit, approval of fire prevention, and appraisal of environmental impact assessment reports.”

The 2021 PCI report, which was developed from responses by over 11,300 businesses – including over 10,000 local ones, and nearly 1,200 FIEs – noted that Cao Bang, Hoa Binh, Kon Tum, Kien Giang, Ha Giang, Ninh Binh, Quang Binh, and Lai Chau are at the bottom of the rankings.

“Despite some improvements, provincial authorities still need to step up the settlement of administrative procedures in the online environment, focusing on taxation, land, social insurance, the environment, construction, fire prevention and control, and market management,” said VCCI chairman Pham Tan Cong.

Nguyen Tuong Van-Chairman Quang Ninh People’s Committee

Quang Ninh secured the lead in the 2021 PCI rankings with a score of 73.02, marking the fifth consecutive year the northern province has been at the top.

The province ranked first in the market entry cost index (7.98 points) and time cost in administrative procedures (8.52 points).

Quang Ninh attracted more than $1.1 billion and saw an increase of 10.28 per cent in the regional GDP for 2021. The province’s average per capita income reached $7,614, ranking second in the country.

In order to attain the investors’ trust, Quang Ninh issued systematic and practical solutions to improve the PCI index over the years, especially amid the COVID-19 pandemic.

Notably, in the context of the pandemic, along with keeping organising dialogues to grasp their problems and then offer effective solutions to support the business community, the province also issued a stimulus package worth hundreds of billions of VND.

This has efficiently supported service and tourism enterprises, along with some policies assisting key industries such as coal and electricity. These drastic measures not only protect domestic businesses but also lure more investors.

Quang Ninh is making an effort to keep this achievement, which contributes to realising the target to attract over $5 billion in foreign direct investment and getting the number of newly-established enterprises to 10,000 by 2025.

Trieu The Hung-Chairman Hai Duong People’s Committee

Hai Duong province climbed 34 notches to 13th position in 2021. This achievement is the result of the province’s effort to support businesses to overcome the pandemic to maintain stable operations.

Thanks to the province’s initiative in controlling the pandemic, enterprises still maintained stable operations and no businesses have had to close. In 2021, the province’s budget acquired $913 million, over $300 million more compared to initial expectations.

Hai Duong has a policy in investment attraction synchronisation, focusing on planning and infrastructure development, particularly inter-regional transport infrastructure.

The province is always proactive in labour resources with over 60 per cent of people of working age who are highly skilled, along with putting the focus on administrative procedure reform, preparing necessary conditions to welcome foreign capital inflow to the province.

Le Duy Thanh-Chairman Vinh Phuc People’s Committee

Vinh Phuc came back into the PCI race last year, entering the top 5. It was an outstanding comeback in the context the province plunged from ninth in 2016 to 29th in 2020.

The new position exceeded our expectations because we planned to get back into the top 15 by 2025. This achievement is a gift that the business community gives the province, showing their trust in the investment environment. Over 93 per cent of surveyed businesses highly appreciate the effectiveness of staff in dealing with administrative procedures, and 89.5 per cent say the time to deal with admin procedures is shorter.

Notably, the province directed relevant agencies and localities to accelerate institutional reforms, remove difficulties in production and business, control input prices, and meet labour demand; effectively adopted support policies, especially for small and medium-sized enterprises to overcome difficulties and quickly restore their normal operations.

The province also accelerated digital transformation, vigorously applied IT to reform administrative procedures, and created a favourable investment environment to attract more funding inflows.

By Minh Vu

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