Good governance efficiency nourishes business enthusiasm post Covid-19: Expert

More than 20 years after the Enterprise Law 2000 came into effect, it is more important than ever to maintain the fruits of this law, and to nurture enthusiasm, belief and business aspirations because, in addition to first-time entrepreneurs, a large number of businesses have been wishing to recover from the damage and loss caused by the Covid-19 pandemic and rebuild their careers.

In early December 2021, the Association of Seafood Exporters and Producers of Vietnam (Vasep) has sent its petition to the Government and many relevant agencies, proposing to solve major problems arising in the process of applying the regulation on control of aquatic products used as food. According to Vasep, the above-mentioned problems have existed for six years, and the association has continuously put forward a proposal to solve the problems to the competent state management agencies.

It is worth mentioning during the past six years, the Government has continuously issued resolutions to improve the business environment, improve national competitiveness, requesting the relevant ministries and agencies to review and abolish unreasonable regulations according to their competence or propose competent authorities to remove obstacles, difficulties and barriers to investment and business activities of enterprises.

However, it's ironic when this problem falls on the seafood industry, which has a total export turnover of billions of US dollars each year. Obstacles and difficulties as in Vasep's petition are of individual category while systemic barriers and difficulties threaten to sprout and grow on a daily basis. One of them is conditional business lines and business conditions.

Actually, the legal division of business lines and professions is divided into three categories comprising of industries and trades prohibited from doing business, conditional business, and business freedom. Classification of three categories of business is a breakthrough step in ensuring residents’ freedom of doing business after thousands of sub-licenses were revoked in the early 2000s.

But since 2007, conditional business lines and business conditions (actually sub-licenses) quickly sprang up like mushrooms after the rain. Ministries, agencies, and localities have quietly expanded their domain of power arbitrarily issuing licenses to manage enterprises in an administrative way; thereby, they created tangible barriers to enterprises.

Good governance efficiency will nourish business enthusiasm in a context which has never been so difficult due to the Covid-19 pandemic.

Faced with that situation, the amendments to the Law on Enterprises and the Law on Investment in 2014 closed the list of 267 banned business lines and the list of conditional business lines. Next, the Government for the 2016-2020 term reviewed, gathered, and preliminarily assessed the actual status of corresponding business conditions, discovering nearly 6,000 business conditions prescribed in nearly 300 other legal documents; therefore, the government has eliminated and simplified at least 50 percent of them.

However, banning business lines is not much; thus, the majority of barriers and obstacles in the form of business conditions for enterprises are still there, even the number of new business conditions created may be many times greater than the number to be abolished.

Reform of regulations on business conditions has so far been done on top of the matter but not on the root, which means there are still many lists of conditional business lines. Therefore, the next reform first focuses on cutting the conditional business lines. In comparison with international practice, it is possible to cut out at least half of the current conditional business lines corresponding to the remaining number of conditional business lines.

When strongly cutting off conditional business lines and corresponding business conditions, the new administrative apparatus is forced to change way of thinking, innovate, and find other tools to manage businesses. In the immediate future, the government should focus on cutting groups of business conditions.

For example, regarding the group of conditions, the government should remove requirements such as minimum human resources, years of work experience and the requirement that human resource must be trained by a state agency. In fact, in some fields, professional qualifications are necessary, such as providing medical services, taking care of people's health. For other fields, this requirement is unreasonable.

Other business conditions that should be abolished are the condition requiring companies to organize business in a certain way or have minimum amount of capital. It should be known that the method of doing business is in many cases a business secret and may have to be changed according to market demand.

The amount of business capital depends on the size and goals of the business. When the government imposes requirements on these types of business conditions as a formality; it has no effect on state management but results in invisible administrative interference in business activities of enterprises and reduces the competitiveness of enterprises, increasing investment costs and creating barriers to market entry.

Weaknesses and deficiencies in the above regulations on business investment conditions are going against and hindering the Government's determination and efforts in improving the business environment and cutting costs for businesses.