Thanh Hoa PCI Improvement: Momentum for Development

On March 14, 2017, the Vietnam Chamber of Commerce and Industry (VCCI) and the United States Agency for International Development (USAID) launched the Provincial Competitiveness Index (PCI) 2016. Thanh Hoa province scored 58.84 points, a drop of 2.20 points from 2015, losing 21 spots from the 10th position to the 31st position out of 63 provinces and cities. To enhance its PCI, create breakthroughs in administrative reform and improve the business environment as stated in the Resolution of the 18th Provincial Party Congress (2015 - 2020 term), Thanh Hoa province has carried out many solutions and activities to clear difficulties and challenges against the business community in 2016 - 2017.

Foreseen
This result was anticipated. Thanh Hoa province has clearly identified the toughest bottlenecks in improving the investment and business environment between the business community and authorities. In a broader view, it did not mean “unfair treatment” but businesses expected more than that. In the 2015 PCI rankings, Thanh Hoa province returned to the Top 10. Eleborating on this, Mr Nguyen Van De, Chairman of the Thanh Hoa Business Association, said with delight that it is important to look back into poor indexes like “access to policies” for enterprises to make bigger breakthroughs. However, as mechanisms and policies are being completed with stricter approaches, making enterprises misunderstand that officials are deliberately hindering the business. Therefore, Mr Nguyen Minh Huan, Deputy Director of Thanh Hoa Construction Department, said that enterprises must equip themselves with legal provisions or policy changes to reduce risks and enhance transparency in production and business. These disputes ended when the Thanh Hoa Provincial People’s Committee issued Official Document 8724/UBND-TH dated August 8, 2016 but this also partly affected the sentiment of enterprises when they filled in the PCI survey that VCCI conducted soon after that. Thanh Hoa was ranked 31st out of 63 provinces and cities. Mr Nguyen Anh Tuan, Deputy Director of Thanh Hoa Department of Planning and Investment, said, at the 2016 PCI announcement ceremony, that the low ranking of the province is an unfortunate misstep on the path forward of the province.

Among 10 PCI component indices in 2016, Thanh Hoa province saw two indices advance: Dynamism and leadership of the government climbed from 4.32 to 4.65 and business support looked up from 6.06 to 6.19 while the rest fell by 0.2-0.5, with three dropping most: Time expense losing by 0.57 points from 5.92 to 5.35, labour training slipping by 0.49 from 6.82 to 6.33, and legal institution dipping by 0.48 from 5.83 to 5.35. VCCI President Vu Tien Loc said, different views in building and perfecting policies and mechanisms are normal and necessary. It is important to discuss different points thoroughly to reach consensus. Looking from this angle, these are better signals for Thanh Hoa to build an enabling government to create and serve a transparent and efficient investment environment.

Ongoing efforts
Although the overall index fell slightly, its PCI rankings dropped a lot as other localities have a better business environment. Moreover, according to the 2016 PCI Report, low-ranked localities had made great efforts for impressive reforms. They learnt and applied good practices on improving the business environment from their peers. Meanwhile, higher-ranked ones see more challenges in seeking new initiatives and methods to speed up public administration reform and economic development.

Before innovation and reform pressures, a series of solutions and activities to deal with hardships and obstacles and accompany businesses such as perfecting mechanisms and policies, accelerating administrative procedure reform, enhancing government - business dialogues have been implemented. Mr Nguyen Dinh Xung, Chairman of the Provincial People’s Committee, said, Thanh Hoa will accelerate communications in order to tackle difficulties of enterprises in time.

At present, the Chairman of the Provincial People's Committee meets businesses on the 21st day of every month to learn about their difficulties to better support them. He/she also directs the chairs of the District/City People's Committees to arrange at least one day in a month to receive and address problems and obstacles for enterprises. This is the most effective solution to support enterprises.

The province has also established provincial and district public administrative centres. The Provincial Public Administration Centre is expected to come into operation by October 2017 and all district public administrative centres will be operational by December 31, 2017. Therefore, the settlement of administrative procedures will be strictly supervised and ensure publicity and transparency. The operation of public administrative centre will strictly control the time of settling administrative procedures by state agencies. Mr Nguyen Dinh Xung said that the Provincial People's Committee also hopes that the business community will regularly research and propose specific solutions to the Provincial People's Committee, provincial and local agencies to improve the investment and business environment; develop mechanisms, policies and solutions on business development and business entrepreneur force construction. The serious attitude of local and provincial leaders shows the province’s great determination to sharpen competitiveness and improve the investment and business environment. And, that spirit has been spreading to the entire political system.

Thanh Hoa province’s objectives of improving business investment environment, supporting development and enhancing competitiveness in 2016 - 2020
As per Decision 1025/QD-UBND dated April 4, 2017 of Thanh Hoa People's Committee

General objectives
Continue to synchronously and effectively implement tasks and measures to accelerate administrative reform, with a focus on reforming administrative procedures and raising the quality of public administrative services and public services; strongly improve the business and investment environment, ensure openness, transparency and equality, create most favourable conditions for enterprises and investors to access capital, labour, land and raw materials, information, science and technology to serve their investment and business activities in the province to develop the business force, enhance the provincial competitiveness and achieve contents of the Resolution of the 18th Provincial Party Congress (2015 - 2020 term).

Specific objectives:
- By 2020, ensure that the degree of satisfaction of individuals, enterprises and investors with the settlement of administrative procedures will reach over 90 per cent.
- All records and official documents exchanged among State administrative agencies shall be made in electronic forms; 100 per cent of public services are provided online at Level 3 and 50 per cent at Level 4 by 2020.
- Review, simplify and abolish inappropriate administrative procedures, ensure that compliance costs will be cut at least 10 per cent annually.
- 100 per cent of licensed projects will receive commitments from district/town governments to land clearance and handover schedule (except for force majeure); 100 per cent of petitions from enterprises and investors will be resolved promptly.
- Complete investment, upgrading and expansion of national highways and trunk roads, with rural areas meeting third and fourth grades, mountainous regions meeting fourth and fifth grades; harden 100 per cent of district roads; build synchronous technical infrastructure for industrial parks (No. 3, 4 and 5) in Nghi Son Economic Zone, Bim Son Industrial Park, Lam Son - Sao Vang Industrial Park and Hoang Long Industrial Park; Each district, town or city has at least one well-invested industrial complex.
- By 2020, the province will have at least 20,000 enterprises, or 56 enterprises to 10,000 residents; the business sector over 65 per cent of GRDP, meets 60 per cent of total social investment, and increase average annual labour productivity by 11 per cent in the 2016 - 2020 period.
- Maintain the following indexes in the Top 10 of the country: the Provincial Competitiveness Index (PCI), the Vietnam Provincial Governance and Public Administration Performance Index (PAPI), the International Economic Integration Index (PEII), the Public Administration Reform Index (PAR Index). By 2020, its PCI will stand in the Top 6.
- In the 2016 - 2020 period, the province trains 396,000 workers for the labour market, raising the rate of trained workers to 70 per cent of the labour force by 2020. By 2020, 100 per cent of public employees at provincial and district agencies, 95 per cent of public employees at communal agencies have standard training. At least 80 per cent of entrepreneurs will be professionally trained of business start-ups and corporate governance.