The 2015 Provincial Competitiveness Index (PCI) recorded Da Nang as the top province for the third consecutive year...

The 2015 Provincial Competitiveness Index (PCI) ranking recorded Da Nang holding the top spot for the third consecutive year, with a score of 68.34, and this is also the sixth time the city has led the country since the index was announced 10 years ago.

A corner of Da Nang

Hanoi disappoints

According to the PCI 2015 report released by the Vietnam Chamber of Commerce and Industry (VCCI) on the morning of March 31, this agency conducted the PCI 2015 based on feedback from 11,700 enterprises, including 10,200 private enterprises operating in 63 provinces and cities and nearly 1,600 foreign-invested enterprises operating in 14 provinces and cities nationwide.

The 2015 PCI rankings recorded Dong Thap in second place after Da Nang with 66.39 points and Quang Ninh in third place with 65.75 points. VCCI said that the top positions are all provinces and cities that have had many initiatives in administrative reform and innovation in management quality.

The next two localities in the group with good management quality of PCI 2015 are Vinh Phuc (62.56 points) and Lao Cai (62.32 points) - which are provinces and cities that achieved good results in PCI in previous years.

The group of 10 provinces with the best governance quality in 2015 also includes: Ho Chi Minh City, Thai Nguyen, Quang Nam, Long An and Thanh Hoa. These localities all received many positive reviews from private enterprises.

At the bottom of the 2015 PCI rankings are the provinces of Lai Chau, Ha Giang and Dak Nong.

Notably, while Ho Chi Minh City is in 6th place, Hanoi only improved two places on the rankings, ranking 24th with 59 points. Some localities that were expected but still had low results such as Nghe An, Hung Yen, Binh Duong, Ha Tinh, Hai Duong... are all struggling in the bottom half of the rankings.

VCCI Chairman Vu Tien Loc said that Vietnam’s competitiveness is largely determined by the quality of governance and the ease of doing business at the provincial level. Therefore, the dynamism, pioneering and diligence of the local civil service apparatus are determining the speed and direction of Vietnam’s development in the coming time.

The bigger the business, the more "tortured" it is.

According to VCCI, in general, the quality of economic management in provinces and cities continues to improve. Many administrative procedures related to registration, access to information, etc. have also seen positive changes.

However, informal costs are still common, along with an unequal competitive environment that remains a major obstacle, according to many domestic businesses.

Devoting a separate chapter to the business environment, the PCI 2015 survey also recorded signs of improvement in the business environment in Vietnam. The rate of private enterprises increasing their investment capital continued to increase slightly (10.9%), the average capital size of enterprises increased, averaging 16.5 billion VND, double the size in 2006.

The rate of enterprises recruiting additional workers was 12%, double that of 2012. In 2015, nearly half of enterprises said they would expand their production and business scale in the coming time, the highest level in the last 5 years of PCI announcement.

The PCI 2015 report also reflects businesses' opinions on the business environment in 2015. Accordingly, the survey results show that small and medium enterprises have not been able to grasp market opportunities well, most of them are still stuck in the domestic market and their business results are relatively gloomy.

These businesses continue to face difficulties in accessing capital resources, land, updating legal information... while bearing a heavy burden of informal costs and not enjoying quality business support services at reasonable costs.

What is more worrying is that the larger the business scale, the more the burden of administrative procedures and inspections by local government agencies increases.

Most businesses support TPP

Also according to the PCI 2015 report, from the perceptions of 1,584 FDI enterprises, it shows that Vietnam continues to be positively evaluated compared to competing countries in terms of policy stability, low risk of asset repossession, high ability of foreign enterprises to participate in the policy-making process and reasonable tax rates.

However, Vietnam's business environment remains unattractive in terms of informal costs, heavy regulation, quality of infrastructure and public services.

FDI investors are concerned about macroeconomic risks and changes in regulations or taxes that reduce their profits, in a context where information transparency is still limited.

The 2015 PCI survey also showed that the level of awareness and support for the Trans-Pacific Partnership (TPP) Agreement among the business community has increased compared to the 2014 survey. The percentage of businesses aware of the agreement increased from 68% to 78% and the level of support increased from 62% to 72%.

However, domestic enterprises have a lower level of awareness of TPP than FDI enterprises.

According to VnEconomy