Da Nang in central Vietnam held its position as the top-performing province for the third year in a row in the country’s 2010 Provincial Competitiveness Index (PCI).
Ho Chi Minh City dropped seven places to 23rd place and for the first time was not among the 22 provinces and cities ranked in the Excellent and High Tiers, said the report, which was released Wednesday in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI).
Hanoi dropped 10 places to 43rd position among the 63 provinces and cities in the six annual survey.
Lao Cai in the north came second while Dong Thap in the Mekong Delta was third. The Mekong Delta continues to show steady and consistent improvement across the region. Including Can Tho and Long An, the delta region accounts for 9 of the 22 provinces and cities ranked in the Excellent and High Tiers.
The survey represents the views of 7,300 Vietnamese enterprises.
According to the sixth PCI survey, enterprises indicate notable improvements in labor training and business support services, but declines in business entry costs, access to land, legal institutions, transparency, and time costs reveal increased compliance burdens on the private sector.
VCCI President Vu Tien Loc said in a statement, “PCI is a useful tool to assess the ease of doing business, economic governance, and administrative reform efforts by local governments of provinces and cities in Vietnam, in order to promote the development of the private sector.
“There are several good examples of reform initiative this year that one province could learn from others.”
Mr. Tran Van Minh, Chairman of the Da Nang People’s Committee, said in the statement, “The PCI has been adopted as a primary data source by local governments of provinces and cities including Da Nang to assess their socio-economic governance, particularly in respect of policy making, enhancing investment - business enabling environment.
He added, “The PCI is also a useful information channel for businesses to decide on investment locations or weigh their plans for production and business expansion to achieve the desired effect. The PCI, therefore, recently has contributed to promoting Da Nang as a destination for many foreign and domestic investors.”
Of specific interest to the business community and policymakers is the first-time survey of 1,155 foreign invested enterprises from 47 different countries whose operations are located nationwide. The results provide valuable insights into the existing foreign direct investment footprint in Vietnam and the challenges of attracting higher value-added investment to sustain economic growth.
Francis Donovan, Director of the United States Agency for International Development in Vietnam, said in the statement, “The 2010 PCI survey suggests that as Vietnam explores strategies to move to the next stage of development, the country could look to ways to attract higher quality investment to increase productivity and prosperity.
“This will require improved economic governance and regulation that reduces the costs and risks to investors doing business in Vietnam.”
The PCI 2010 also provides greater details and robust empirical evidence of areas where enterprises pay informal charges. This information can guide government efforts to prioritize areas where enterprises are vulnerable to corruption and introduce integrated technology and management solutions to minimize corruption as well as increase efficiency.
Virginia Palmer, Chargé d'affaires of the U.S. Embassy in Hanoi, said in the announcement, “Improving economic governance requires continued leadership and commitment of government leaders at central and provincial levels to tackle difficult challenges, such as infrastructure, administrative management, corruption, and workforce development.”
The PCI is the result of a collaborative effort between the Vietnam Chamber of Commerce and Industry and the U.S. Agency for International Development’s Vietnam Competitiveness Initiative (USAID/VNCI) Project.
