Nghe An's PCI ranking and issues raised

Construction of coastal road through Nghe An. Photo: Tran Chau

The Importance of PCI

It must be affirmed that PCI is a tool to measure and evaluate the quality of economic management at the provincial level in a fair and impartial manner; reflecting the actual experience of enterprises in aspects of local economic management activities.

PCI results are comparable to those of other provinces and cities and help promote reform efforts, including increasingly better administrative reform. For the business community, PCI enhances the private sector’s monitoring role in government operations. For potential investors, PCI compares and ranks the business environment in localities, serving as a basis for decisions on choosing investment locations.

PCI also has the impact of promoting Programs and initiatives to improve the business environment. Series of Resolutions 19/NQ-CP (from 2014 to 2018)aboutthosemission,main solutioncontinueimprove business environment, improving national competitiveness; Resolution 35 (2016) on supporting and developing enterprises until 2020; a series of Resolutions 02 (2019 - 2022) on key tasks and solutions to improve the business environment and enhance national competitiveness in 2020; Resolution 139 (2018) promulgating the Action Program to reduce costs for enterprises and Decision 288 (2022) on the framework for assessing the implementation of socio-economic development goals, have proven that.

Housing area for experts and workers in VSIP Industrial Park. Photo: My Ha

What can we see from Nghe An's PCI in 2021?

The methodology for constructing the Index started from the first version of the PCI Report in 2005, with adjustments made every four years in 2009, 2013, 2017, and 2021. The new methodology for 2021 will continue to be maintained from 2022 to 2027. The change in the 2021 assessment is basically aimed at assessing the direct results of the management activities of provincial leaders such as issuing policies and procedures, instead of indicators showing the business investment environment - which are indirect results of management behavior. In other words, the 2021 PCI Index tends to assess the results with a direct causal relationship of the management activities of provincial and municipal leaders/authorities instead of assessing the results brought about by many parties.

In 2021, Nghe An province's PCI score was 64.74, an increase of only 0.01 points compared to 2020, but its ranking dropped by 12 places (from 18 to 30 in the National PCI Rankings). This result shows that the quality of improving the investment, business and administrative reform environment of the province still has many bottlenecks and clearly does not meet the requirements.

Nghe An organizes a workshop to find solutions to improve PCI ranking. Photo: Thanh Duy

Accordingly, while the informal costs of localities continue to decrease due to positive results in anti-corruption activities, with new variables, Nghe An is rated quite low. Especially with 2 indicators of "informal costs when carrying out procedures" and 5 new indicators of "informal costs for officials" still high.

Mr. Dang Quoc Vinh, Director of Investment, Trade and Construction Joint Stock Company, said that although Nghe An's administrative reform work has had many changes, unofficial costs when carrying out procedures are still common in some sensitive departments and branches.

Nghe An’s investment attraction in recent years has had many bright spots, especially being in the Top 10 largest FDI attraction in the country. However, the province tends to attract strategic investors and large enterprises to create a breakthrough momentum for overall development. In addition, the impact of the Covid-19 pandemic in recent years has made it difficult for small and medium enterprises to recover and expand production and business.

Local governments in the country continue to promote dynamism and support for the private economic sector. Government dynamism has achieved the best results ever.

Regarding this issue, Mr. Nguyen Danh Nhan - Director of an agricultural enterprise said that the policy from the province and departments and branches is basically very determined, creating all conditions to support investors. But in reality, when it comes down to the lower levels, with small projects, there are still many barriers and problems that are not easy to handle overnight.

“My company has invested in a high-tech agricultural project in the locality. Partly due to the pandemic, partly due to the lack of unity between authorities at all levels and the lack of attention from the district authorities, so far, the project is still… on paper. But we are determined to do it, despite the difficulties, because it is also the honor, sustainable development of the business and jobs for workers,” Mr. Nhan shared.

Nghe An province's PCI in 2021 still has many other important issues and indicators that need attention and consideration: The field of equal competition has a second-to-last ranking with all indicators being rated low; Legal institutions and security and order, which have had low rankings since previous years, have now dropped further; Land access and stability in land use have not only not improved but also fallen to the bottom of the Top...

Conclusion

Although administrative reform in general and Nghe An's PCI ranking in particular have improved in recent years (except for the 2021 PCI which decreased as analyzed above), in reality, there are still issues that the government needs to consider seriously, receptively and objectively. That shows that many bottlenecks, barriers and inadequacies in management and operation have been and are major issues affecting the confidence of businesses and investors.

Here is a quote from Mr. Dau Anh Tuan - Deputy General Secretary of VCCI, Director of PCI Project: To create more trust for the business community, Nghe An needs to continue and strengthen dialogue activities between the government and businesses. Along with that, gradually build the image of a dynamic and friendly government to create all favorable conditions for businesses to attract investment more and more effectively. Besides those efforts, provincial leaders also need to proactively learn, contact, exchange and learn from experiences from provinces in the region.

Phan Duy Hung (VCCI Nghe An Branch)