World Bank lauds business reforms

The index, entitled “Doing Business in 2006: Creating Jobs,” ranked Vietnam among the top three reformers out of 155 countries over the last year.
The report, cosponsored by the World Bank and the International Finance Corporation, the private sector arm of the World Bank Group, specialises in finding and ranking countries that implement wide-sweeping reforms to streamline business regulations and taxes.
The report stated: “Overall, European nations were the most active in enacting reforms. The top 12 reformers in the past year, in order, were Serbia and Montenegro, Georgia, Vietnam, Slovakia, Germany, Egypt, Finland, Romania, Latvia, Pakistan, Rwanda and the Netherlands.”
“Many East Asian economies that compete for new enterprises and jobs risk falling behind other countries that are simplifying regulations and continuing to make their investment climates more business friendly,” said Michael Klein, World Bank and IFC vice president for private sector development and IFC chief economist.
The authors of the study noted Vietnam’s reforms in enterprise registration, a new bankruptcy law, and measures to streamline contract enforcement and to reduce property registration costs.
Vietnam introduced new bankruptcy laws to clarify rules for closing insolvent businesses and reorganising viable businesses. Moreover, the country also accelerated contract enforcement by setting time limits on court judgments.
Although Vietnam is reforming rapidly, it ranked 99 regarding its business environment for enterprises, still higher than the Philippines and Indonesia at 113 and 115. With strong performance in some areas, but many obstacles in the legal environment for credit markets and business licences, China ranked eight ahead of Vietnam.
Ten business environment factors were considered for the rankings, including starting a business, hiring and firing workers, enforcing, contracting, registering property, getting credit, protecting investors, closing a business, dealing with business licences, trading across borders, and paying taxes.
Martin Rama, chief economist of the World Bank Vietnam, said Vietnam’s attempts in economic reforms and favorable business environment creation were recognised. “Vietnam has made impressive improvements in legal reforms,” Rama said.
Pham Chi Lan, member of the Prime Minister’s research board, however, said the biggest barrier for Vietnam in maintaining and developing the rankings “is the enforcement and implementation of recently approved laws such as the bankruptcy law.”
She said enterprises and investors “are in need of an equal and fair business environment rather than preferences and privileges created by the government to support them.”
Martin said despite the fact that Vietnam was recognised among the top three reformers worldwide, there were many things ahead to continue developing its ranking.