|At the launching ceremony of the Vietnam Provincial Competitiveness Index
The purpose of the report is to evaluate the overall quality of economic governance, in addition to the wider business environment, and efforts made by provinces and cities nationwide to boost administrative reforms, thereby boosting the private sector’s development.
The 2019 PCI report surveyed approximately 12,500 businesses which operate nationwide, including 11,000 private enterprises based in 63 provinces and cities along with over 1,500 foreign-invested enterprises (FDI) across 21 localities throughout the country.
Vu Tien Loc, VCCI Chairman, stated that between 70% and 80% of businesses have gone on to express their satisfaction with the conduct of public authorities, while the confidence of a majority of firms has increased over the past year.
Of the firms surveyed, over 50% of domestic and foreign enterprises stated their plans to expand business operations over the next two years. In addition, with close to 380 new businesses being established every day last year, the scale of registered capital is significantly increasing.
Loc pointed out that plenty of sectors have not undergone any radical reforms as expected, while unofficial costs remain high despite steady falls in recent years.
Over 50% of businesses said they must pay for unofficial costs and have asked local authorities to continue to implement changes in an effort to better meet the demands of the wider business community.
Moreover, administrative procedures remain burdensome, with 59% of firms who have had construction works done in the past two years stating that they encountered difficulties when it comes to handling administrative procedures related to land, site clearance, taxation, and social insurance.
The report emphasises the need to simplify administrative procedures as a way of shortening construction times and preventing overlaps.
The latest edition provided an analysis of the trend of automation, with 67% of surveyed businesses noting that they had partially automated jobs over the past three years. Most notably, up to 75% of businesses plan to automate new jobs over the coming three years.
Moreover, both domestic private enterprises and FDI firms anticipate automation will replace between 25% to 33% of jobs currently undertaken by humans in the future.
In order to promote automation and digital transformation, Loc underlined the importance of improving the skills of local labourers. In line with this, education should be considered to be a top national policy with a focus on achieving three major breakthroughs, including institutional reform, improvements in the quality of human resources, and infrastructure development.
The PCI 2019 report reflects the state of reform and the business environment at a local level in the nation amid the COVID-19 pandemic, with international trade and investment flows reversing and global supply chains being reshaped to become more reliable and sustainable, forcing enterprises to become more creative and responsible, Loc noted.