Ho Chi Minh City

HCMC determines to improve trading, investment environment

SGGP

According to the 2019 Provincial Competitiveness Index (PCI) issued in May 2020, Ho Chi Minh City (HCMC) is ranked at the 14th position with 67.16 points. To achieve the target of being in the Top-5 as announced in the Resolution of the 10th Congress of the HCMC Party Committee, the municipal authorities have introduced several solutions to improve the PCI score.

Residents in HCMC easily search for information at electronic kiosks in the People’s Committee of District 12. (Photo: SGGP)

Residents in HCMC easily search for information at electronic kiosks in the People’s Committee of District 12. (Photo: SGGP)

Out of the 10 sub-indices, HCMC has 4 indices with only an acceptable score of around 5. Its highest score belongs to ‘Business Support Services’, at 7.39 while its ‘Law & Order’ index is the second lowest nationwide. Therefore, from occupying the 4th position in 2014, the city gradually degraded to the 10th and 14th position in 2018 and 2019 respectively.

A closer look at all the sub-indices, certain categories of HCMC still gain quite a good score, like ‘Business Support Services’ (at 7.39) or ‘Labor Policy’ (at 7.3). The overall score still rises year after year, yet this increase is too slow compared to other provinces, not to mention many categories with disappointed scores, leading to a drop in the position.

Head of the Law Department under the Vietnam Chamber of Commerce and Industry (VCCI) cum Director of OCI program Dau Anh Tuan shared that the 2019 PCI is calculated based on the investigation on 12,429 businesses nationwide, including 10,846 private and 1,583 FDI ones in 21 provinces.

Thus, HCMC voiced that opinion collection from merely a group of businesses cannot comprehensively display the whole picture of provincial competitiveness and the true development of each region.

However, the municipal authorities also admitted that the renovation in HCMC is not as expected.

Therefore, the HCMC Steering Committee for Administration Reform has proposed several solutions to improve both the trading and investment environments in the city.

Accordingly, HCMC is going to maintain the high-scoring indices, and boost them if possible, in the period from 2020 – 2025. To fulfill that goal, the city is going to help businesses tackle their trouble, especially the ones related to capital, land use, and technology upgrading in order to increase their performance.

Acceptable-scoring indices like Entry Costs, Transparency, and Time Costs need long-term solutions.

HCMC is planning to strictly observe the regulation of publishing bidding information and selecting contractors online in accordance with the rules of the Planning & Investment Ministry. Particularly, in 2020, the city will choose contractor online for all cases of open bidding in the categories of goods, non-consultation services, consultation services worth no larger than VND5 billion (approx. US$214,700), construction and assembling worth no larger than VND10 billion ($429,000).

Low-scoring indices like Access to Land, Informal Charges, Policy Bias, Proactivity, and Law & Order require urgent attention.

To improve the Policy Bias score, HCMC is going to attract investment in focused constructions and key fields of the city in accordance with the law while ensuring the fairness in accepting information from both domestic and foreign businesses, from private enterprises sited in the city.

As to Law & Order, which is the key factor in an investment environment concentrating on high value-added services, the municipal authorities are going to introduce a mechanism and procedure to help businesses report any corruption of state offices.

Meanwhile, HCMC is planning to closely collaborate with VCCI to find more feasible solutions to improve its PCI.

Director of the Institute for Policy Studies and Media Development Nguyen Quang Dong said that HCMC has great potentials to increase this PCI.

He explained that depending on the strategic planning, a region may not stand at the first position, but it should be the leader in certain indices. HCMC is now focusing on trading and services while limiting simple industries with low-level laborers, it should prioritize service-related, policy-related indices and refer to PCI as a channel to understand investors rather than a ranking pressure.

In addition, due to high awareness, businesses sited in the city generally hold higher expectation towards the authorities. HCMC is rated quite low regarding law and order or corruption report. This needs immediate attention.

Director Dong also mentioned the establishment of a smart city and an e-government in the near future to reduce the time to process administration documents and informal costs.

By Mai Hoa – Translated by Thanh Tam

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