Major tasks and solutions for improving the business environment and national competitiveness

GOVERNMENT No. 19/NQ-CP

SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness --------------------------- Ha Noi, March 18, 2014

RESOLUTION

On major tasks and solutions for improving the business environment and national competitiveness

­­­­­­­

GOVERNMENT

 Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Resolution 10/2011/QH13 dated November 08, 2011 of the National Assembly on the five-year socio-economic development plan for the 2011-2015 period;

Pursuant to the Resolution 10/NQ-CP dated April 10, 2012 issuing the Government’s Action Plan to realize the socio-economic development strategy for the 2011-2020 period and the five-year orientations and tasks of the national development in the 2011-2015 period;

Based on discussions among the Cabinet members and the conclusion of the Prime Minister at the Government’s regular meeting in February 2014,

RESOLVES:

Over the past years, our country has gone through significant reforms to improve the business environment and gained achievements, including rather good economic growth. The economy, however, has revealed many shortcomings and weaknesses and it is facing a number of difficulties and challenges with productivity, quality, efficiency and competitiveness remaining low. International organizations ranked Viet Nam’s national competitiveness lower than that of other regional countries and below the average rate of ASEAN countries. It has been slowly improved, especially in terms of the institutional framework, infrastructure and business environment. This is highlighted by the problems with business establishment, protection mechanism for investors, property rights, intellectual property rights, efficiency of the State apparatus, tax payment, electricity access and handling of business insolvency, etc.

The aforesaid shortcomings and weaknesses can be attributed to many objective and subjective reasons. The subjective reasons include the lack of comprehensive awareness among ministries, agencies, localities and businesses on the role and importance of improving competitiveness in the context of deeper international integration and increasingly fierce competition; the absence of national strategies/ programs and systematic approaches to improving competitiveness; and inadequate engagement of socio-political organizations, professional associations, businesses and the public in improving the national competitiveness.

To better the business environment and national competitiveness, the Government tasked ministries, agencies and localities to focus on synchronously implementing the solutions figured out in the Resolutions adopted by the Party, National Assembly, and Government, giving priority to the following issues:

I. TARGETS AND TASKS OF IMPROVING THE BUSINESS ENVIRONMENT AND COMPETITIVENESS

Focus on effectively realizing the three strategic breakthroughs combined with economic restructuring and transformation of the growth model.

Continue improving institutions of the socialist-oriented market economy where the central task is to develop, amend and supplement legal regulations, policies, mechanisms to create a favorable and fair business environment for all organizations, businesses and citizens to do their business. To focus on formulating mechanisms and policies on property rights, intellectual property right protection, protection of investors and minority shareholders, and rules of bankruptcy, dissolution, competition etc. To develop a mechanism to consistently and smoothly operate various markets of commodity, labor, securities, real property, science and technology and others and to ensure the efficient allocation and use of resources for development purpose.

Develop synchronous infrastructure with modern facilities, centering on the transport system and major urban areas to meet the requirements of industrialization, modernization, and international integration. To issue more preferential mechanisms and policies to mobilize non-State resources for infrastructure development. To speed up the application of information technology (IT) in sectors and fields as a new tool of development, to innovate management, production and service delivery processes and to enhance national competitiveness.

Comprehensively realize solutions in order to improve education and training quality, particularly tertiary education and vocational training. To pursue rapid development of human resources, especially high-quality workforce, to improve management skills to meet the requirements of international integration; to focus on radical and comprehensive renovation of education and training in the direction of enhancing the public involvement and international integration with a proper roadmap; to continue renewing the management and finance mechanisms and to improve the quality of education and training and vocational training to meet the requirements of socio-economic development, labor market and sharpen national competitiveness.

Keep on improving mechanisms and policies to encourage enterprises’ investments in scientific research, technological innovation and human resources training. To enhance intellectual property right protection and advocate the development of science and technology businesses.

In the 2014-2014 period, to focus on improving the business environment and beefing up administrative procedure reform through curtailing the time for processing and completing administrative procedures, reducing administrative costs, and strengthening transparency and openness of State administrative agencies. To strive to reach the average of the ASEAN-6 countries with the following concrete targets:

- Simplify procedures and cut the time required to establish new businesses down to the maximum of six days; to improve other relevant steps to shorten the time from business registration to commencement;

- Further reform dossier processing steps and tax payment procedures and reduce the time for businesses to complete tax payment procedures to the average level of the ASEAN-6 countries (the average time to pay tax in ASEAN-6 countries is 171 hours per year);

- Shorten the time for businesses and investment projects to get access to electricity to no more than 70 days (the average time to access to electricity in the ASEAN-6 countries is 50.3 days);

- Improve the regulations on property rights and protection of investors in the Investment Law and the Law on Enterprises towards enhancing the protection of property rights, investors and minority shareholders in accordance with international standards;

- Facilitate and guarantee equality, openness and transparency in market-based access to credits among enterprises, organizations and individuals of all economic sectors;

- Simplify processes, dossiers and procedures related to export, import and customs and reduce the time for import and export clearance to the average of the ASEAN-6 countries (the average time for export clearance in the ASEAN-6 countries is 14 days and import clearance is 13 days);

- Cut short the time for handling business insolvency to no more than 30 months;

- Publicize the information about business performance and corporate finance in accordance with legal regulations international best practices.

II. SOLUTIONS TO IMPROVE THE BUSINESS ENVIRONMENT AND COMPETITIVENESS

1. Ministries, agencies and localities carry out, in a consistent and fruitful manner, all the plans adopted by the Government to realize the 2013 Constitution and the Resolution 67/2013/QH13 of the National Assembly on enhancing the enforcement of laws, ordinances and resolutions of the National Assembly and National Assembly Standing Committee and promulgation of documents on detailed implementation.

2. Ministries, agencies and localities, based on their functions and tasks:

- Renew administrative procedures, especially the procedures relevant to competitiveness rating indicators in order to amend or propose revisions thereof to the Ministry of Justice and the Office of Government to summarize, monitor and report to the Government.

- Publish administrative procedures on the Internet and display them at head offices of the agencies where administrative procedures are directly processed. Actively assign and arrange competent and responsible officers to provide guidelines on preparation of documents, document reception and processing administrative procedures in accordance with the prescribed timelines. Enhance coordination, inspection and examination of completion of administrative procedures during the implementation of investment projects at the local level; detect and strictly punish cadres and public employees whose acts hinder or trouble organizations and individuals while performing public duties.

- Speed up technology innovation and information technology (IT) application in the management, exploitation and operation of the socio-economic infrastructure systems in each sector and the economy as a whole. The top priority is to promote IT development and applications in the industrialization and modernization roadmap of each sector and field in order to create a foundation for fast and sustainable development and improve national competitiveness. Foster the development of IT industry and software industry. Enhance the capacity of technology mastering and effectively and efficiently manage the information infrastructure system and information content to serve the leadership, direction and execution; meet the society’s demand for being supplied with information and information exchange, promote socio-economic development, ensure security and national defense, and protect information safety and security, and national sovereignty in cyber-environment.

- Design mechanisms and policies and instruct agencies and businesses in all fields and all economic sectors to beef up technology innovation and IT application in production and business activities, development and registration of their product branding and improving their competitiveness.

- Accelerate restructuring of public investment, credit organizations and State-owned enterprises (SOEs) and approved equitization schemes.

3. The Ministry of Planning and Investment takes prime responsibility and collaborates with other ministries, agencies and localities to:

- Review and improve legal regulations in order to perfect the business environment and enhance national competitiveness, focusing on amending and supplementing the Investment Law, including streamlining procedures relevant to verification and licensing, the Law on Enterprises for better protection of property rights, investors and minority shareholders in accordance with international standards. Finalize detailed provisions to fruitfully implement the Law on Bankruptcy and minimize the prescribed time to deal with insolvent businesses. Review relevant regulations on investment activities that involve land use and construction in order to detect shortcomings and problems for appropriate amendments, supplement and improvements of legal framework on investment.

- Deploy necessary measures to better protect rights and interests of investors, shareholders especially minority shareholders of joint stock companies, and members of limited liability companies.

- Continue to streamline procedures to start a business; simplify procedures for registration of changes or supplements to business registration as well as reduce costs thereof; set up uniform investment procedures for general application across the country; deploy the one-stop shop mechanism and make information easily accessible by both domestic and foreign investors; curtail the prescribed time to start a business to no more than six days.

- Review, supplement and improve mechanisms and policies in order to encourage IT application in investment projects and production and business activities of enterprises in all economic sectors.

4. The Ministry of Finance takes prime responsibility and collaborates with other ministries, agencies and localities to:

- Review and assess the level of openness and transparency in the State budget allocation process for improvements; streamline administrative procedures relevant to expenditures for development investment and regular spending on non-profit activities.

- Review and re-evaluate the applicable process, dossiers, and procedures for imports and exports; reduce the time to clear imports and exports for business targeting at the average of the ASEAN – 6 group (it takes an average of 14 days to export and 13 days to import in the ASEAN – 6 countries).

- Review, re-evaluate and improve the current process, dossiers and procedures for tax payments; reduce the time for business to complete tax payment procedures targeting at the average of the ASEAN-6 group (the average of 171 hours per year in the ASEAN-6 countries).

- Continue to comprehensively reform administrative procedures for tax, customs and treasury activities; fruitfully deploy the one-stop shop model, enhance the coordination of relevant agencies in processing administrative procedures in these sectors so as to create significant changes from early 2014. Make public administrative procedures in tax and customs sectors so that businesses and public can easily access to and monitor the implementation; enhance dialogues between tax/customs authorities and businesses to promptly deal with the latter’s problems.

- Review, supplement and improve mechanisms and policies on tax and State budget spending to encourage reform initiatives, application of IT and other technologies in investment projects, production and business activities of enterprises in all economic sectors.

5. The Ministry of Education and Training takes prime responsibility and collaborates with other ministries, agencies and localities to:

- Review and improve procedures and conditions to start and operate education and training facilities; encourage and facilitate top international universities to open their training facilities particularly non-profit facilities in Viet Nam; abolish under its authority, or recommend the abolition of, the procedures and conditions that are unreasonable or no longer necessary; as a result of such review, supplement, amend and streamline  the remaining procedures and conditions and reduce the cost of compliance thereof towards further encouraging and facilitating domestic and foreign individuals and social organizations to engage in providing education and training services.

- Expand the discretion of education and training institutions to make their own decisions on entrance examinations, financial issues, training programs and examinations; facilitate education and training service supplies under the market-based mechanism with strict control of quality and outcomes.

6. The Ministry of Labor, Invalids and Social Affairs takes prime responsibility and collaborates with other ministries, agencies and localities to:

- Review, evaluate and take necessary measures to facilitate employment and recruitment practices, ensuring the consistency and flexibility of the labor market.

- Review and improve procedures and conditions to set up and operate non-public vocational training establishments; abolish, under its authority, or recommend abolitions of, the procedures and conditions that are unreasonable or no longer necessary; as a result of such review, supplement, amend and streamline the remaining procedures and conditions and also reduce the cost of compliance thereof towards encouraging and facilitating domestic and foreign individuals and social organizations to engage in vocational training activities.

- Strictly monitor planning-based development activities; and issue appropriate mechanisms and policies to encourage and improve the quality of training and vocational training activities.

- Enhance the discretion of non-public vocational training facilities to decide enrolment, financial issues, training programs, their contents and service products, facilitate supplies of education and training facilities under the market-based mechanism.

7. The Ministry of Justice takes prime responsibility and collaborates with other ministries, agencies and localities to:

- Review and systematize the general legal framework and specific regulations relevant to improving business environment and national competitiveness in light of the 2013 Constitution. Provide guidelines for, monitor, accelerate and summarize results of the realization of the 2013 Constitution by other ministries, sectors and localities.

- Develop and submit to the competent level, the revised Civil Code and revised Penal Code in the direction of protecting and enhancing the development of the socialist-oriented market economy, including improving regulations on property right and intellectual property right protection; mull over the Law on Access to Information and the Law on Promulgating Administrative Decision as a step to realize Viet Nam’s international commitments on transparency of State agencies’ operations and to enhance domestic and foreign investors’ access to open and transparent information.

- Devise and submit to the Government for promulgation of a Resolution on key tasks to reform administrative procedures in implementation of investment projects in order to improve the business environment and lure investment; develop a project for integrated procedures for notorization, registration of land use rights, and assets attached to land and tax. Supervise and speed up other ministries, agencies and localities to comply with the regulations on administrative procedure control; evaluate the impacts of administrative procedures right at the stage of drafting and promulgation of legal normative documents and in enforcement phase; this should be incorporated in the Law on Promulgation of Legal Documents when this Law is amended and supplemented.

- Review, evaluate and provide comments on the procedures for resolution of contractual disputes in particular and civil disputes in general towards simplifying those procedures and reducing both time and costs of dispute resolution particularly in simple cases.

8. The Ministry of Home Affairs takes prime responsibility and coordinates with other ministries, sectors and localities in effectively realizing the Master Plan for Public Administration Reform through 2020; reviews, improves and organize the serious implementation of the Regulations on one-stop shop mechanism and integrated one-stop shop at the State administrative agencies so that local authorities can consistently apply this mechanism while processing administrative procedures in the fields of investment, land and construction.

9. The Ministry of Natural Resources and Environment is responsible for coordinating with other ministries, agencies and localities to:

- Provide guidelines for, and organize fruitful realization of the Land Law (revised).

- Review and improve mechanisms and policies as well as legal framework for efficient management, exploitation and use of land and natural resources; adopt appropriate mechanisms and policies to create clean land fund to facilitate production and business activities and socio-economic infrastructure development.

- Review and improve the legal regulations on environmental protection and sustainable development; adopt appropriate mechanisms to encourage businesses to protect the environment and effectively use natural resources and energy.

10. The Ministry of Agriculture and Rural Development is responsible for coordinating with other ministries, agencies and localities to:

- Devise standards and regulations; revise mechanisms and policies; and make appropriate arrangements to strengthen its apparatus.

- Fruitfully restructure agriculture coupling with the development of new rural countryside in accordance with the approved plan; assess large-scale production models in the agricultural sector following the product value chain for expansion to other localities.

- Implement consistent solutions for planning and IT application in the agricultural sector, particularly in the development of plant varieties, breeds of livestock and farming techniques; focus on adjusting production scale, create favorable conditions for businesses to purchase farm produce and provide agricultural supplies to farmers whereby reducing the costs of brokerage and increasing incomes of farmers.

- Continue to enhance the development of the agro processing industry and technological applications, reduce post-harvest losses.

11. The Ministry of Industry and Trade is responsible for coordinating with other ministries, agencies and localities to:

- Implement and instruct the Electricity of Viet Nam to promptly take necessary measures to streamline procedures for businesses of all economic sectors to get access to electricity for their projects and reduce the time and costs thereof targeting at no more than 70 days (the average of ASEAN-6 countries is 50,3 days).

- Develop supporting industries, focusing on agro-mechanical engineering and textile and garment industry.

- Enhance examination and deal with illegal business activities; fight against smuggling, trade frauds, market manipulation and unhealthy competition while facilitating business and production activities of organizations and individuals.

- Beef up consistent and effective implementation of international trade commitments, firstly towards the establishment of the ASEAN Economic Community by 2015 and entry into free trade agreements with key trade partners.

12. The Ministry of Transport takes prime responsibility and coordinates with other ministries, agencies and localities in taking prompt measures to improve the quality of infrastructure and seaport services, road transport, inland waterway, railway, seaway, and aviation; enhance logistic service system and reduce costs of transportation services to the average of the ASEAN-6 group.

13. The Ministry of Science and Technology takes prime responsibility and coordinates with other ministries, agencies and localities to:

- Adopt appropriate mechanisms and policies to speed up and encourage renovation and creativity initiatives, application of scientific and technological advances in business and production activities, improve business competitiveness during the product development process, support for establishment of a network of science and technology enterprises and a technology market to enable purchases, sales and transfers of technologies, including patents and intellectual property rights.

- Study and implement, within its assigned authority, or recommend competent agencies to take, necessary measures to enhance the efficiency of intellectual property right protection and readiness for mastering and renovating technologies; foster the implementation of the national science and technology programs.

- Design international cooperation programs in science and technology sector, human resource training; coordinate with the Ministry of Foreign Affairs to incorporate these issues in regional and international agendas and bilateral and multilateral dialogues.

14. The Ministry of Construction takes prime responsibility and coordinates with other ministries, agencies and localities to:

- Continue to study and provide public and transparent guidelines for construction licensing procedures to ensure the accessibility by businesses, organizations and individuals; enhance examination and deal with violations in the construction licensing sector in line with Decree 64/2012/NQ-CP; at the same time, recommend additional provisions on fees in the direction of reducing the cost of construction licensing.

- Work with the Ministry of Planning and Investment and Ministry of Natural Resources and Environment to finalize and promulgate a joint Circular on a reasonable and integrated process for processing administrative procedures in the fields of investment, land and construction.

15. The Ministry of Information and Communications takes prime responsibility and coordinates with other ministries, agencies and localities to:

- Review and improve mechanisms and State management policies to create favorable conditions to promote IT development and application in the State management and the economy as well.

- Improve the capacity of mastering IT skills and the effectiveness of managing the information infrastructure and information content to serve the Party and State leadership, instruction and execution; meet the social needs of information exchange, promote socio-economic development, ensure national defense and security, information safety and security, and national sovereignty in cyber-environment.

- Bolster the development of the IT industry, especially the software industry and digital content.

- Develop international cooperation programs in IT development sector; work with the Ministry of Foreign Affairs to incorporate this issue in regional and international agendas and bilateral and multilateral dialogues.

16. The State Bank of Viet Nam pursues monetary policy tools in a reasonable manner appropriate to the macro-economic developments to ensure the monetary market stability; adopts measures to improve and maintain transparency of credit information, ensure smoother access to credit by businesses, organizations and individuals of all economic sectors under the market-based mechanism.

17. Ministries, agencies, within their assigned functions and duties, collect information, review and assess public service delivery, develop solutions to reform the way in which public services are provided towards diversification and elimination of the monopoly held by one or some of their subsidiary units or by the supplier designated in advance; study and recommend the services which might potentially be open for private sector’s participation with appropriate openness level before the promulgation of regulations on opening the market, ensure equal and fair access to opportunities to do business in this kind of services and freedom to chose service provider under the market-based mechanism.

18. The People’s Committees of provinces and centrally-governed cities review their own regulations and implementation thereof, and set a target and a roadmap from now to 2015 to achieve the level of high-ranking provinces and cities under the 2013 Provincial Competiveness Index (PCI).

19. The Viet Nam Chamber of Commerce and Industry, business associations and professional associations:

- Conduct surveys, independent researches and regular assessment of the implementation of administrative procedures, propose recommendations to the Government. Coordinate with the Ministry of Home Affairs and the Ministry of Justice, to design criteria to assess reforms of administrative procedures by ministries, agencies and localities, provide regular reports thereon to the Prime Minister and make them public to the business community and people. Study credibility ratings of ministries, agencies and localities by the business community.

- Proactively and closely coordinate with investors’ community to understand their problems as well as difficulties and shortcomings during the implementation of the administrative procedures in the fields of investment, land and construction and report them to the competent agency for prompt interference.

- Coordinate with ministries, agencies and business associations in conducting programs to assist businesses in effectively developing their competitiveness strategies, applying scientific and technological advances, promoting brand development and performing social obligations in order to gradually improve their business-doing capacity and competitiveness, contributing to the improvement of the national competitiveness.

- Collect comments from businesses on the policies promulgated by ministries, agencies and localities and report them to the National Council for Sustainable Development and Competitiveness Improvement (via the Office for Sustainable Development under Ministry of Planning and Investment) and the Office of Government for final report to the Government and publication on the mass media.

III. ORGANIZING OF IMPLEMENTATION

1. Ministries, agencies and localities, within their assigned functions and duties:

Promptly develop, promulgate and implement their own specific action plans for improving business environment and competitiveness. These plans should be reported, by April 30, 2014, to the National Council for Sustainable Development and Competitiveness Improvement for a submission to the Prime Minister to issue the Government’s Action Plan for improving the business environment and competitiveness, which will be incorporated in the Work Plan of the Government, agencies and localities for implementation. Each of the action plans must include the plan’s objectives, duties, implementation schedule, unit in charge, proposed steps, and a detailed plan for issuing or revising legal documents, expected outcomes and clear-cut analysis of its implications.

- Focus on effective implementation of the tasks and solutions figured out in this Resolution and be responsible before the Government and the Prime Minister for such implementation in the assigned area.

- Frequently examine and supervise the progress and results of implementation of the Action Plan and the Government Work Plan by ministries, agencies and localities; take prompt measures to effectively handle problems; put forth effective instruction and execution solutions.

- Once every six months and annually, make an assessment report on the progress and outcome of the implementation of the Action Plan and the Government Work Plan for improving business environment and competitiveness by each of the ministries, agencies and localities and submit it to the National Council for Sustainable Development and Competitiveness Improvement (via the Office for Sustainable Development under the Ministry of Planning and Investment) and the Office of Government for a final report to the Prime Minister.

By December 31 annually, prepare a report on assessment of the competitiveness of each ministry, agency and locality and send it to the National Council for Sustainable Development and Competitiveness Improvement (via the Office for Sustainable Development under the Ministry of Planning and Investment) and the Office of Government for development of a final report on Viet Nam’s competitiveness before submitting to the Government.

2. Ministry of Information and Communications, Viet Nam News Agency, the Voice of Viet Nam, and Viet Nam Television proactively collaborate with ministries, agencies and localities and the Party Central Committee’s Commission for Propagation and Education in extensively disseminating the Resolution and status of competiveness ratings of international organizations to various sectors and levels.

The Ministry of Information and Communications coordinates with the Party Central Committee’s Commission for Propagation and Education in giving instructions to the mass media to enhance dissemination and encouragement activities to improve businesses’ and people’s understanding of and implement this Resolution. Speed up dissemination of administrative reform, create social consensus and accelerate the reform of administrative procedures at ministries, sectors and localities.

The Viet Nam Government Portal opens up a forum to receive the comments on policies by businesses and the public.

3. The Office of Government coordinates with ministries, agencies and localities in examining, supervising and summarizing the results of implementing this Resolution and report it to the Chairman of the National Council for Sustainable Development and Competitiveness Improvement for submission to the Government in its regular meetings held in the last month of each quarter. The results of implementation of the Resolution will be the basis for evaluating the performance of each ministry, agency and locality at the Government’s regular meeting held in December each year./.

ON BEHALF OF THE GOVERNMENT PRIME MINISTER   (Signed) Nguyen Tan Dung