31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Oct 18, 2021 / 13:43

Enhancing economic competitiveness to help Vietnamese businesses regain confidence: Experts

More cities/provinces are now focusing on the quality and effectiveness of policy implementation, instead of issuing new ones.

At a time when the business community is facing severe hardship due to the Covid-19 impacts, experts suggested a strong push for reform and eventually greater economic competitiveness would help regain business confidence in the positive outlook.

 Production at Hanoi-based Garment 10 for exports. HNT Photo: Thanh Hai

During the first nine months of 2021, the total number of newly-established enterprises declined by 13.6% year-on-year to 85,500, while around 90,300 temporarily suspended operation, or an increase of 15.3%. This averaged 10,000 enterprises exited the market every month.

“More than ever, this is the right timing for the Government to push for greater administrative reform and create more favorable conditions for businesses and people to enhance their resilience against future shocks,” President of the Vietnam International Arbitration Center (VIAC) Vu Tien Loc told The Hanoi Times.

According to Loc, the move remains in line with Vietnam’s long-term goal of becoming one of the most business-friendly countries in ASEAN.

“As part of the economic recovery process, the Government should accelerate reform efforts to improve the business environment towards higher transparency and competitiveness,” he said.

In the mid-and long-term, Loc said Vietnam remains an attractive investment destination, thanks to a solid macroeconomic foundation and political stability.

Nguyen Minh Thao, Head of the Department for Business Environment and Competitiveness Research under the Central Institute for Economic Management (CIEM) noted there has been a lack of consistency in carrying out administrative reforms at provinces/cities or ministerial level.

“Along with direct support in terms of fiscal and monetary policies, including waiving and freezing taxes and fees payment, lowering lending rates or speeding up public investment, removing obsolete business conditions and simplifying administrative procedures during the pandemic is essential for enterprises to recover,” Thao said.

Thao said it is imperative for Vietnam to give priority to administrative reform programs to improve the business environment and better meet growing demand from investors.

“Boosting the quality of infrastructure or human resources is important, but would not be enough if the country is to compete with others in the region to attract investment capital,” she continued.

Meanwhile, Director of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI) Dau Anh Tuan suggested flexibility and adaptability are two key factors for enterprises to survive the pandemic and asked the Government to refrain from introducing new business conditions or carrying out specialized inspections.

Tuan also said new incentives are required to encourage more enterprises to embark on the digital economy.

“When businesses are ready with new changes in the market, a favorable and safe business environment is the most important factor to keep hold of enterprises in the market,” he said.

“A constantly-improved business environment is what the businesses are looking for and also the target that the Government should aim for,” Tuan stressed.

Hanoi with strong results in administrative reform

Along with other cities/provinces, such as Quang Ninh, Bac Ninh, Vinh Phuc, or Haiphong, Hanoi has made significant steps in realizing instructions from the Government to address concerns of local businesses.

The capital was among the first few to announce the administrative reform plan for 2021-2025 right from the beginning of the year. During January-September, the city’s authorities proposed the removal or streamlining of 87 administrative procedures.

In the latest move, the city is scheduled to hold a dialogue with domestic and foreign businesses on October 19 to further support businesses and understand their concerns as the city is gradually reopening the economy.

For the past months, the Government has been holding separate talks with foreign business associations to receive feedback and address their preoccupations.

At the provincial level, local authorities have set up task forces chaired by the city leader to work on business difficulties.

On the recent moves by both central and local governments, Tuan from VCCI suggested there has been a change in the mindset of the authorities.

“More provinces/cities are shifting their focus on the quality and effectiveness of policy implementation instead of issuing new ones,” said Tuan, adding this would help ensure a healthy business environment for enterprises to commit long-term plans.