Vietnam's business environment has improved, but many challenges remain

According to the Doing Business 2017 report just announced by the World Bank on October 26, 2016, the economic environment Vietnam's business this year was recordedIt has improved the most since 2007, increasing 9 places (from position 91/189 to position 82/190 in the rankings). With 10 indexes calculated, Vietnam has 5 indexes that have increased in rank.

In which, Investor Protection increased the most with 31 places (from 118 to 87) thanks to the reforms of the 2014 Enterprise Law. Next was the Cross-Border Trade Index, which increased 15 places (from 108 to 93) thanks to reducing the time to carry out export and import procedures (export decreased by 39 hours, imports decreased by 39 hours). The Government's efforts in the past two years on reforming customs procedures and specialized management have contributed to the increase in score and ranking of this index. The third index with a significant increase in rank is Paying taxes and social insurance (up 11 places) with a reduction of 230 hours (from 770 hours to 540 hours). Access to electricity improved by 5 levels, mainly due to continued shortening of timedown to 46 hours (last year it was 59 hours). The 5th index to increase in rank is Enterprise Bankruptcy Resolution, up 1 rank (from position 126 to rank 125), but this index increased in rank not due to changes or reforms but due to a decrease in the reference score, thus Vietnam's ranking score increased.

In addition to 5/10 indexes increasing in rank, the remaining 5 indices of Vietnam decreased in rank. Among them, Starting a business (down 10 levels); Construction licensing, Access to credit (each index decreased by 3 levels); Property ownership registration, Contract dispute resolution (each index decreased by 1 level). Most of the downgraded indexes are partly due to Vietnam's lack of reform in these areas and partly because other countries have improved better than Vietnam.

According to the assessment of Ms. Nguyen Minh Thao, Head of the Department of Business Environment and Competitiveness, Central Institute for Economic Management, Ministry of Planning and Investment, the World Bank's business environment ranking results show that the Government's efforts in recent years to improve the business environment, especially the implementation of the 2014 Enterprise Law and Resolution No. 19, have brought remarkable results. Compared to ASEAN countries, Vietnam is a country with good improvement in rankings (9 places), behind Brazil (25 places) and Indonesia (15 places). Some countries, such as Malaysia, have always had good improvement in the past, but this year they dropped one rank due to the rise of other countries.

Although Vietnam has effectively implemented a number of solutions to improve the business environment, there are still many areas that have not been focused. The World Bank recently recorded that Vietnam has 3/10 reform areas (which are Minority Shareholder Protection, Tax Payment, Cross-Border Trade Transactions), while Indonesia has 7/10 reform areas, Brunei has 6/10 reform areas. It is worth noting that most of Vietnam's indicators have not reached the average of ASEAN 4 or even ASEAN 6 countries. Some countries in the region have implemented more reforms and progressed faster than Vietnam (typically Indonesia and Brunei). Thus, to achieve the goal of parity with ASEAN 4 countries requires Vietnam to continue efforts to reform globallypresent, more and faster in the fields of business environment to keep up with and exceed the reform speed of countries in the region./.

Thuy Quyen
Ministry of Planning and Investment