Vietnam's business environment increased by 14 ranks, but 4/10 indexes decreased in rank

Although it has increased 14 places compared to 2016, Vietnam still has many challenges in improving the business environment.

The World Bank has just announced the Doing Business 2018 Ranking, in which Vietnam has made significant improvements, ranking 68/190 economies, up 14 places compared to last year (ranked 82). This is the highest increase in the past decade, demonstrating the Government's efforts in implementing solutions to facilitate businesses. However, in reality, there are still many barriers to the business environment in Vietnam.

Explaining the improvement in the business environment, the World Bank said that the Vietnamese Government has implemented many reasonable economic reform measures in the past year. As a result, 8/10 indicators increased sharply, of which, 5 indicators had the most positive impact on the general business environment in Vietnam including: Loan index, tax payment, access to electricity, international trade, and contract enforcement.

There are still many challenges in improving the business environment in Vietnam. (Illustration photo: KT)

In fact, this year, businesses have more favorable opportunities to access credit with banks reducing interest rates from 7%/year to 6.5%/year from July 2017 for agricultural, supporting industry, small and medium-sized, high-tech enterprises; expanding the scope of collateral assets...

Thanks to that, the credit access index in Vietnam increased by 5 points and improved by 3 ranks, reaching 29th place out of 190. Notably, the tax payment and social insurance index increased the most points and ranks (up 14.78 points and 81 ranks, respectively), reaching 86th place out of 190.

However, there are still many challenges in improving the business environment in Vietnam. For example, in granting construction and investment permits, businesses still have to go through dozens of steps. While the Prime Minister requires businesses to be inspected no more than once a year, in reality, many businesses still have to receive many inspection delegations, which wastes time and costs.

Mr. Mac Quoc Anh, Vice President of the Hanoi Association of Small and Medium Enterprises, said that in terms of administrative procedures, applying for an investment license takes nearly 40 steps, so we need to try to reduce the procedures to make it more convenient for businesses.

“The Prime Minister has issued Directive 20 requiring that businesses not be inspected more than once a year, but in reality, it still happens at the grassroots level. Currently, online services are available but still at level 3, businesses still expect to upgrade to level 4 to minimize negative aspects such as unofficial costs,” said Mr. Mac Quoc Anh.

According to Ms. Nguyen Minh Thao, Head of the Business Environment and Competitiveness Department, Central Institute for Economic Management, currently 4/10 business environment indexes have decreased in rank, of which, starting a business has decreased by 2 ranks, registering property ownership has decreased by 4 ranks, resolving business bankruptcy has decreased by 4 ranks. The decrease in rank is not because the indexes have not improved, but because other countries have improved better than Vietnam on these indexes.

Currently, Vietnam ranks behind 4 countries in the ASEAN region, including Singapore (2nd); Malaysia (24th); Thailand (26th); Brunei (56th) and above Indonesia (72nd), Philippines (113th). Notably, this year, along with Vietnam, 3 countries including Thailand, Indonesia and Brunei also have increased their rankings significantly and even faster than Vietnam.

According to statistics from the Ministry of Planning and Investment, since the beginning of the year, the country has had 105,000 newly established enterprises, 97% of which have revenue and pay taxes, showing that Vietnam's business environment is having favorable conditions. However, along with Vietnam, countries in the region are also strongly reforming the investment environment.

Therefore, the solutions proposed in Resolution No. 19 on improving the business environment and enhancing competitiveness; Resolution No. 35 on supporting business development need to continue to be implemented vigorously, while promoting institutional reform, cutting cumbersome administrative procedures, reducing costs, abolishing unnecessary business conditions, reducing costs... to create a favorable business environment and enhance national competitiveness in general./.

According to VOV