For the third consecutive year, Danang placed first in the Provincial Competitiveness Index (PCI) with a score of 68.34.
Aside from the city’s transparency, transactions cost reductions and proactivity, its Centre for Public Administration which opened in September 2014 is the major factor for its successive leads. It functions as a coordinator of local policy and as an information clearing house for the citizens, businesses and public officials, saving time, money and effort. This is based on the PCI 2015 report on March 31 by the Vietnam Chamber of Commerce and Industry (VCCI) with support from the U.S. Agency for International Development (USAID).
The PCI report bases its selection on the following criteria: Entry Costs; Transparency; Business Support Services and Regulatory Reform. Entry Costs mean a short eight-day waiting period for businesses to be fully operational after registration and five days for changing registration certificate. Transparency means access to provincial planning documents such as land use maps and infrastructure maps. Business support services mean openness and usefulness of provincial websites in providing businesses with information and other essential services. For transaction costs, it meant companies “documenting less paperwork, fewer offices to visit, high quality civil servants and more professional receptions. This was exemplified in tax inspections wherein the time lost for firms fell from eight to an incredible 4.5 hours on average.
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The PCI 2015 report also manifested a decline in informal charges among firms and levelling the playing field for private sector competition. Informal charges increased from 50% in 2013 to 64.5% in 2014 and 66% in 2015. Private companies have complained that 10% of their revenues go to these charges and that the government seemed to be partial against businesses in favour of state corporations when processing transactions and other related procedures.
The PCI 2015 survey also showed the awareness and support for the Trans-Pacific Partnership (TPP). Awareness rose from 68% in 2014 to 78% in 2015, while support increased from 62% to 72% as U.S. assured that it would sign the agreement and honour the terms of the negotiations. One section states that access to U.S. markets will be given because this is an important indication of the benefits that the firms can get from the partnership. Domestic firms showed lower awareness compared to their foreign counterparts, but expressed greater support than the latter. But both firms are seen to be optimistic about the provisions of TPP especially in the areas of market opening and behind-the-border reforms, such as labour rights and state-owned enterprises (SOE). The report also showed that domestic firms showed support for TPP members but doubt and even negativity among non-TPP member states.
The report also exposed the limited access of small medium-sized enterprises (SMEs) in foreign-invested enterprises (FIEs) in Vietnam in terms of goods and services. SMEs have limited access to resources such as land, capital and updated policy information. They have to suffer the so-called “unofficial expenses” and have actually been barred from receiving business–support services at reasonable prices. They also have difficulty accessing information on planning; policies; and laws and regulations both from provinces and cities. SMEs have to “negotiate” and pay informal charges just to get their business and other transactions to push through. Micro-enterprises, small businesses and medium enterprises have in fact claimed losses in their first year of operations instead of revenue.
Dong Thap, Mekong Delta Province placed second with a score of 66.39 followed by Quang Ninh with 65.75 points. Vinh Phuc and Lao Cai completed the top five, while the rest of the top ten provinces and cities were HCMC, Thai Nguyen, Quang Nam, Long An, Thanh Hoa, Hanoi City and Dak Nong Province. The Northern mountainous provinces of Bac Kan, Lai Chau and Ha Giang were at the bottom of the list.