Business environment records positive signs
08:08 | 03/04/2019

VGP – Under the Provincial Competitiveness Index (PCI) 2018, the bribery rates for obtaining official permissions for such thing as land use, company registration, and foreign direct investment were on the decline in comparison with the previous periods. 

Illustration photo

The PCI 2018 which was recently published acknowledges the positive recognition of the business community for the Government’s recently endeavors against corruption and unofficial costs. Accordingly, in 2018, all measurements of unofficial costs got better since 2006. 

Declining informal charges

Under the PCI 2018, the problem of “petit” corruption, a small bribery costs which enterprises have to pay for obtaining official permissions has dramatically decreased. Specifically, the bribery rates dropped to 54.8%, the record low over the past five years (with66.3% in 2015). 

The scale of informal charges was also smaller in which only 7.1% of enterprises responded that they paid over 10% of their revenues for all types of unofficial costs (the rate was 11.1% in 2015). 

Up to 58.2% of enterprises complained of official harassment. The rate was lower than then record level in 2014 with 65.6%. 

Under PCI 2018, large-scale corruption cases were on the decline. Only 30.8% of enterprises said that they had to pay informal charges to speed up procedure progresses for land use rights. More impressively, 39.3% of enterprises responded that they had to pay inoffiical charges for investigators and inspectors. The rate was lower than that of 51.9% in 2017. 

In addition, 48.4% of enterprises agreed to pay commission costs to win bids (down from 54.9% in 2017. Finally, only 28.8% of respondents were concerned over popular penalty lobby cases in court legist ration (down from 31.6% in 2017).

Fairer business environment

The PCI 2018 showed that the equality among SOEs and FDI enterprises was improved. 

Specifically, the rate of respondents wondered of local authorities’ preference for SOEs and their difficulties for enterprises dropped from 41.2% in 2017 to only 32.4% in 2018. Only 37% of respondents reported that localities prioritized FDI sector than private sector. The figure decreased sharply from 45.7% in 2017. 

However, the report stressed the necessity to take more drastic measures to offer fair environment for the private sector. 

In 2018, 46.2% of respondents said that local authorities were positive with the private sector. Over 76% of respondents commented that the municipal and provincial People’s Committees flexibly complied with the law to generate a favorable environment for the private sector. The figure was the highest one over the past five years. 

Finally, 60.9% of respondents said that local authorities were proactive and creative in handling emerging issues. 

Progresses in administrative reform

The PCI 2018 showed that 30.7% of respondents said that they sent over 10% of time in finding out and complying State regulations (down from 35.5% in 2015). Up to 74.7% of enterprises said that they were satisfied with State official performance (up from 67.4% in 2015). Over 74% of them assessed that paperwork was simple (up from 51.2% in 2015). 

Moreover, investigation and inspecting activities showed positive improvements. 

Tax investigation hours were shorter. The outcomes showed that the Directive 20/CT-TTg of the PM on reorganizing inspection of enterprises is working./. 

By Khanh Phuong

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