Publication date: 15-03-2013
Provided by the provincial competitive index 2012 (PCI) analysis showed that a sharp decline in the economic governance over Viet Nam, leading to local authorities to speed up the reform.
The US Agency for international development (USAID) and Viet Nam Chamber of Commerce and industry (VCCI) held a ceremony in Hanoi yesterday to reveal the results of last year jointly PCI, now in its eighth year.
Dong Thap province this year, ranked as the number one followed by an Giang and Lao Cai. Meanwhile, top performers from previous years, such as Binh Duong and Danang, slipped in this year index. The rural mountainous provinces of Cao Bang, Tuyen Quang and Dien Bien ended up at the bottom of the standings.
The report, based on an examination of 8,059 domestic companies and foreign-invested enterprises about 1540 63 provinces, showed that economic governance actually fallen in the last year.
The average score dropped from 59.15 last year to 56.2 this year, the lowest figure since 2009. In addition, not a single province this year reached the threshold ' excellent ' by 65 points – the first time this had ever taken place in the PCI.
Furthermore, the report found that both foreign and domestic companies have much more negative about their prospects than in previous years. This year, 33 percent of respondents said that they wanted to expand their business compared to 76 percent in 2006 – a record low.
According to Dau Anh Tuan from the VCCI, was "business performance reported at an all-time low this year" with only 4 percent of respondents saying they had increased transactions and less than 60 percent claim to be profitable.
In comparison, the figures included 27 percent and 82 percent respectively in 2007.
VCCI Chairman Vu Tien Loc said that some improvements have been made as a result of the implementation of the "easy" reforms such as reducing waiting times for business permits and inspections more effectively.
Not, however, make governance more transparent and fair reforms emerged last year.
According to the report, companies believe that access to provincial programming documents deliberately difficult and unfair and informal rates and fees are crippling their activities.
Alarming, the report also showed that 42% of companies admitted to paying the Commission to officials of the Government to ensure that it won a contract, a dramatic increase of 23 percent on the figure recorded in 2011.
The report noted with regard to the views of foreign investors, a growing pessimism. Business confidence and performance were at their lowest level since the survey first started, with only 33 percent of the foreign invested enterprises – expect to expand their company in the next two years. Profitability, capital and labor growth in the foreign sector were lower than in previous years.
The arrest of former vice-President of the Asia Commercial Bank establishment Council, Nguyen Duc Kien, on 20 August last year, is a strong signal to investors that Viet Nam was facing serious economic problems.
The report found that within 20 days following the news, the confidence of both foreign and domestic investors in the country reduced by half.
Further analysis showed that respondents believe that the macro-economic crisis was. Macro-economic instability, 48% of foreign investors regard as one of the top three primary risks they faced in Viet Nam.
"Viet Nam should reforms aimed at mechanism-related issues, such as improving the transparency, restructuring of the real estate market, improvement of prevention of corruption and increase the quality of human resources to create a favorable business environment for companies," said Loc.
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