Prime Minister's gift for businesses

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc congratulated the Government on successfully launching the "second wave of reform", recalling the Prime Minister's gift to businesses before the conference.

At the 2017 Prime Minister-Business Conference with the theme "Accompanying Businesses", the Chairman of VCCI presented a report on the results after 1 year of implementing Resolution 35 on supporting and developing businesses.

The Prime Minister has done things that warm the hearts of businesses.

Mr. Vu Tien Loc said that the Prime Minister and Deputy Prime Ministers have been very close, urging and playing a pioneering role in promoting the implementation of the Resolution with the spirit that in the new Government "there is no room for retreat".

Prime Minister with delegates before the opening of the conference. Photo: Quang Phuc

"The Prime Minister has done heartwarming things that really support businesses," he said, referring to his inspection trips to localities, listening to opinions from localities and businesses, the Prime Minister's direct direction of grassroots reforms, and the Prime Minister and the Government's rapid efforts to open the market.

The results of a quick survey by VCCI in late 2016 and early 2017 showed that 75% of enterprises assessed the impact of the 5 groups of tasks and solutions set out in Resolution 35 as positive.

"However, we are still not satisfied with what we have achieved," said Mr. Loc.

Specifically, VCCI said that enterprises are still in an extremely difficult situation. The return on assets of enterprises in the economy has decreased from 6.6% in 2012 to 3.2% in 2015.

In the first months of 2017, the number of newly established enterprises increased, but the number of enterprises ceasing operations and dissolving was also half the number of newly established enterprises.

"The main reason is that the business environment still has countless difficulties and problems that need to be solved and resolved. The results achieved are only the first step and are still too small compared to the existing shortcomings that have accumulated over many years," said Mr. Loc.

Regarding unofficial fees, according to the results of the Provincial Competitiveness Index PCI-2016 study by VCCI, 66% of 11,000 surveyed enterprises confirmed that they had to pay this type of fee, said the VCCI Chairman.

"Corruption in handling procedures for businesses is still common in many places," he said.

Reducing costs for businesses is an urgent requirement. But reducing costs is not everything. According to the Chairman of VCCI, when talking about a creative government, we often talk about support, incentives... but what businesses need most is not support, especially financial support. If there is any support, it should be in the direction of helping businesses improve their management capacity.

VCCI surveys show that many localities have not yet properly implemented the requirement of inspection and examination once a year as set out in Resolution 35.

It is a common practice for businesses to receive 6-7 inspection and audit delegations a year, not to mention unofficial inspections, many of which are related to food safety and hygiene: market management, health, and measurement inspections.

Hot above, cold below

But the main reason, according to VCCI, is that the instructions of the Government and the Prime Minister have not been seriously implemented.

With the unclear mechanism of dividing authority and responsibility, the situation of "hot above, cold below", "top tells, bottom doesn't listen" is still common in many times and places.

VCCI proposed that after the conference, the Prime Minister will issue a directive to promote Resolution 35, clarifying the specific tasks and goals to be achieved this year, and specifying the deadline for implementation, clearly defining the responsibilities of sectors and levels in the implementation stage and having sanctions to ensure implementation because there should be such a directive every year.

Prime Minister's gift

Also in his speech, Mr. Loc congratulated the Government for successfully launching the "second wave of reforms", recalling the Prime Minister's gift to businesses right before the conference, and representatives of Vietnamese businesses thanked the Prime Minister for issuing a document directing the rectification of inspection and examination work to create a favorable environment for businesses to invest in production and business.

Mr. Vu Tien Loc recounted the case of Circular 37, a regulation of the Ministry of Industry and Trade, requiring testing and inspection of formaldehyde and aromatic amine content in imported textile products.

This regulation costs a medium-sized business $45,000 per year in testing costs and customs procedures will delay each shipment by 3-7 days.

In total, with about 6,000 textile and garment companies in Vietnam, the textile and garment industry pays about 135 million USD/year for this specialized inspection process.

This issue was raised by the Chairman of the Textile and Garment Association at the first conference between the Prime Minister and businesses.

Based on the recommendations of the business community and the direction of the Prime Minister and Resolution 35, the Ministry of Industry and Trade has proactively abolished Circular 37 and removed the inspection requirements. This decision was announced on October 12, 2016 on the occasion of Vietnam Entrepreneurs Day.

Many businesses have benefited from this change. Ms. Pham Kieu Oanh, Deputy General Director of Nha Be Garment Corporation (NBC), said she was “crying tears of joy” when she heard that Circular 37 was abolished.

Continuing this spirit, the Ministry of Industry and Trade has also planned to abolish 15 administrative procedures and simplify 108 others.

According to Vietnamnet.vn