HA NOI — The central city of Da Nang has surpassed the southern province of Binh Duong to top the country’s Provincial Competitiveness Index (PCI) in 2009 for the second consecutive year.
In the Provincial Competitiveness Index 2009, announced by the Viet Nam Chamber of Commerce and Industry (VCCI) yesterday, Da Nang scored 75.96 per cent, followed by Binh Duong with 74.01.
The fifth annual PCI was based on a survey of 9,890 firms which contributed opinions on nine aspects of governance in 63 provinces and cities. These nine aspects consist of entry costs; land access and security of tenure; transparency and access to information; time costs of regulatory compliance; informal charges; proactivity of provincial leadership; business support services; labour and training; and legal institutions.
Speaking at the ceremony, US Ambassador Micheal W Michalak stressed the significance of PCI 2009 in the context of the global economic downturn as it helped improve provincial economic governance – a critical factor to raise businesses and investors’ confidence.
While informing attendees of key findings in the report,the VCCI deputy general secretary cum member of PCI research team, Tran Huu Huynh, said that Lao Cai, Dong Thap, Vinh Long and Vinh Phuc ranked among the top six performers.
Overall, Viet Nam continued to make a great deal of progress in administrative reform, noted by improvements in time costs and entry costs, which may be associated with the Prime Minister’s Administrative Simplification programme referred to as Project 30.
Other areas of improvement included land access, labour quality and legal institutions. Worrisome declines, however, were evident in transparency, informal charges and proactivity of local leaders.
Dien Bien, Ca Mau and Long An made the greatest leaps in improving governance in the last four years, with the highest increases of 11.3, 10.3 and 10 per cent, respectively.
Explaining the province’s achievement, Deputy Chairman of the southern Ca Mau Province People’s Committee Nguyen Xuan Hong said that the province had been implementing active and efficient investment policies and organising many conferences to listen to the opinions of enterprises.
"We consider these opinions good reasons to make changes in governance," he said.
Besides, the province had facilitated companies to enjoy the Government’s stimulus package, paid much attention to agricultural production and created stable material resources for seafood processing firms which enabled them to expand, Hong added.
Ha Noi, which was ranked 33rd, reached 58.18 per cent, 1.3 per cent higher than the previous year. Huynh said that the expansion of Ha Noi raised the city’s final PCI scores slightly, although the changes were minor.
Only 65 per cent of private companies surveyed intended to expand their businesses over the next two years, compared with 78 per cent in 2008 and 77 per cent in 2007.
HCM City, the nation’s biggest economic hub, was ranked 16th.
Things should be changed
The survey also reveals that the two most important governance indicators for generating private sector growth are transparency and labour quality.
Chairman of the European Chamber of Commerce in Viet Nam Alain Cany said, "PCI is an important tool to access the levels of efficiency of each province and its willingness to open doors to foreigners."
Most provinces in Viet Nam were not very well known to foreigners, thus PCI was a reliable source to introduce the provinces to investors, he added.
Last year, Viet Nam saw many improvements, but changes did not happen as fast as investors’ expectations, he said, everything was delayed because of poor transparency and complicated local administrative procedures.
Provinces should also remove obstacles caused by legal regulations, Cany added.
"Besides, we would like to use good and cheap labour, but we hope Viet Nam would be able to become more self sufficient, rather than importing accessories or raw materials. Therefore, it is important for us to find better skilled workers," he said.
US Ambassador Michalak said that for the first time, almost 10,000 companies took part in the survey and this proved that more and more enterprises wanted to use PCI to learn about business environments.
"Transparency and labour training are critical components of business environments," he said.
Information should be more available for businesses to base investment decisions on.
"Education is the priority of the Vietnamese Government and we hope that we can help Viet Nam to improve its education system, so that there will be a high-quality work force available for firms which are interested in working in the country."
Administrative reform was also a very important topic, he said, hoping that the Prime Minister’s determination and efforts to cut 30 per cent or more of unnecessary rules would help increase the PCI index of provinces.
Microsoft’s Viet Nam, Laos, Cambodia General Director Chirstophe Destriac said that IT was a key driving force for economic growth, thus the country should have more skilled and talented IT human resources.
Concluding the conference, VCCI chairman Vu Tien Loc said: "I believe that PCI continues to be a very important aid to provincial leaders in their reform efforts, and assisting Government leaders in making Viet Nam a more competitive place for business." — VNS
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