Vietnam’s Governance, Admin Reforms Improve: PCI 2021

Vietnam Briefing highlights key features of Vietnam’s Provincial Competitive Index 2021. For the fifth year in a row, Quang Ninh province topped the list making the province a role model for growth with a positive business environment. Vietnam’s business landscape continues to demonstrate positive signals for both domestic and foreign investors despite the effects of the pandemic.

The Provincial Competitive Index (PCI) introduced in 2005 is a collaborative report developed by the Vietnam Chamber of Commerce and Industry (VCCI) and the United States Agency for International Development (USAID).

The PCI methodology is periodically recalibrated every four years to reflect changes in the business and regulatory environment as well as developments in the business community in Vietnam.

The PCI measures 10 sub-indices:

  • Low entry costs for business start-ups;
  • Easy access to land and security of business premises;
  • A transparent business environment and equitable business information;
  • Minimal informal charges;
  • Limited time requirements for bureaucratic procedures and inspections;
  • Minimal crowding out of private activity from policy biases toward the state, foreign, or connected firms;
  • Proactive and creative provincial leadership in solving problems for enterprises;
  • High-quality business support services;
  • Sound labor training policies;
  • Fair and effective legal procedures for dispute resolution and well-maintained law and order.

This year, the PCI was included as a key indicator to evaluate provincial performance in administrative reform as per Decision 288/GQ-TTg Issued by the Prime Minister on specifying a framework for assessing the implementation of established socio-economic development goals.

This speaks volumes for the important role of PCI as an effective tool to measure economic governance promote administrative reforms at the provincial level.

Highlights from PCI 2021

Quang Ninh tops list for five years in a row

For the fifth consecutive year, Quang Ninh province led in provincial competitiveness among all of Vietnam’s 63 provinces and cities. This achievement resulted from significant efforts Quang Ninh made in 2021 when the provincial government issued Resolution 05-NQ/TU on strengthening administrative reform and improving the business environment and provincial competitiveness.

In 2021, Quang Ninh conducted reviews to improve and simplify administrative procedures, reducing the regulated processing time by 40 to 50 percent.

One of the most remarkable initiatives of Quang Ninh is the introduction of an investment enabling task force, known as the Investor Care panel, which aims to facilitate non-state investments into the province by helping investors address difficulties and obstacles related to investment and land procedures , land clearance, and project operation-related procedures. The provincial authorities also expanded the use of digital media and social networks to actively gather information from businesses and promptly address emerging issues.

Regarding the province’s response to the COVID-19, Quang Ninh effectively implemented the central government’s policy and directions, initiating measures to help businesses safely resume operations, especially in the tourism industry. Aside from tax incentives, fees, social insurance, and credit access, the province also worked with businesses to assure the circulation of goods to facilitate manufacturing, and prevent supply disruption.

Top provinces

Hai Phong came in at second place for the first time, with a score of 70.61, moving up five places. The province sealed its highest PCI ranking ever, thanks to its improved local business environment.

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