'Running'… business conditions

(Baonghean) - According to the provisions of the Enterprise Law and the Investment Law, from July 1, 2016, only three agencies, namely the National Assembly, the Standing Committee of the National Assembly, and the Government, have the right to issue regulations on business conditions. This means that up to 3,299 business conditions in circulars and decisions issued by ministries and agencies will be abolished and cease to be in effect.

Illustrative image. Source: Internet

Therefore, there seems to be a quiet and hurried sprint to "transfer" business conditions from the form of circulars to the new official "playing field" of decrees.

According to VCCI statistics as of June 10, 2016, out of a total of 49 new decrees guiding business conditions that needed to be issued, only 38 had been submitted to the Government, while 11 had not yet been submitted. Of those, only 24 decrees had been submitted to VCCI for comments. Many draft decrees are being accelerated in their drafting and submission for approval, skipping many steps in the process, such as posting the draft online, soliciting business opinions, assessing impacts, organizing workshops, explaining, clarifying, and incorporating feedback; in fact, the intensity is so high that as many as 44 draft decrees of this type were reviewed by a single coordinating ministry in just one week… Therefore, some old business conditions are still being “copied and pasted” from old circulars or “added” in the new draft decrees…

Recent experience shows that, among the 267 conditional business sectors (recently adding the 268th sector, meteorological and hydrological forecasting and warning), 98 sectors require business licenses or certificates of eligibility; 69 sectors require professional certificates or licenses; and 31 sectors require statutory capital or deposits.

There are 6,475 business conditions at various levels, of which 3,299 are currently regulated in 170 circulars and decisions of various ministries. Furthermore, unnecessary "certificates of certificates" still exist, such as "certificates of eligibility for business"; "documents recognizing or confirming eligibility..." of various kinds. Stopping these "business conditions" – these "sub-licenses" – has been creating harsh and stringent pressure on businesses, potentially discouraging or stifling business ideas, and easily becoming a means of harassment for businesses by some officials and civil servants in ministries, sectors, and localities who have the power to grant licenses and business conditions…

Business conditions are an important component of the business environment; minimizing and increasing their transparency is a driving force for business development. At the same time, they reflect the competitive quality of the business environment, as well as the goals, metrics, and criteria for evaluating the quality of the institutional apparatus, the professionalism, capacity, effectiveness, and efficiency of state management in general, and for businesses in particular.

The removal of illegal, outdated, and unnecessary business conditions creates the expectation that Vietnam will have a transparent, favorable, and equitable business environment, free from harassment, extortion, and corruption, enhancing competitiveness at both macro and micro levels, and meeting the requirements of international integration. Anyone who, irresponsibly, intentionally or unintentionally, wants to include old business conditions or modify and "upgrade" them in the new decree goes against this trend.

Global and domestic experiences have provided profound lessons about the costly consequences of debt crises resulting from a lack of control over subprime debt and derivative instruments. Maintaining subprime business conditions within legally compliant legal documents will not only lower the quality of these documents but may also lead to unforeseen negative consequences in their implementation later on…

The "accelerated" process of shortening the timeline and procedures for drafting decrees—a kind of "rush" to create business conditions (which should have been carefully prepared long ago)—inevitably foreshadows prematurely issued, low-quality decrees, and even implicitly contributes to the burden of business conditions, a "new bottle, old wine" situation that has, is, and will continue to cause frustration for the business community and society as a whole.

Dr. Nguyen Minh Phong