Ho Chi Minh City and Hanoi disappoint, unable to crack the top 5 of the annual competitiveness index
The central city of Da Nang continued its reign as Vietnam’s best place for doing its business for the third year in a row, according to an annual survey released Thursday.
The 2015 Vietnam Provincial Competitiveness Index (PCI)
, conducted by the Vietnam Chamber of Commerce and Industry and the US Agency for International Development, rated all 63 provinces and centrally-governed cities in terms of ease of doing business, economic governance, and administrative reform efforts. Scoring was based on the polling of 11,700 local private and foreign companies operating in the country.
Da Nang topped the list with 68.34 points on a 100-point scale.
The new Center for Public Administration, established in September 2014, is a key contributor to this score.
The center, which coordinates local policy and serves as an information clearing house, “has proven to be effective in saving time, effort and money for the people, businesses and public officials,” according to the survey.
The survey found 70 percent respondents in Da Nang agreed that “our firm does not have to take many trips to obtain stamps and signatures” and 76 percent said “government officials are effective in processing procedures.” Those numbers compared to 67 and 71 percent last year.
In addition, with its ambitious plan to build a “smart city,” Da Nang has successfully developed a model that enables quick development of high-speed online services at low-cost, particularly enabling modernization of public administration and the monitoring of the activities of the state management agencies, according to the survey.
The Mekong Delta province of Dong Thap sustained its second place with 66.39 points. It has focused its efforts on capacity building and improving the performance of the government at all levels, boosting administrative reforms toward a more friendly government.
The provincial government has devised plans to reduce meetings by 30 percent so that the leaders “would have more time to travel and interact directly with the people and businesses to help solve their difficulties.”
The northern province of Quang Ninh surpassed Lao Cai to rank third with 65.75 points. It has been known as a pioneer in strongly promoting public-private partnerships that encourage private providers of services to act in the place of the province’s government.
Ho Chi Minh City, the country’s economic center, fell two places to 6th while Hanoi inched up to 24th from 26th in 2014.
The northern provinces of Lai Chau and Ha Giang and the Central Highlands province of Dak Nong were named at the bottom of the list.
The survey did not take the provinces and cities’ economic advantages and disadvantages such as infrastructure or market size into account. That is why many top-tier cities and provinces known as foreign-investment magnets can be outperformed by lesser-known peers.
Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, has said the survey is a “tool” to reflect the private sector’s evaluation of the local governments’ economic governance.
The new survey also showed about half of foreign-invested companies currently in Vietnam considered other countries, including China, Thailand, and Indonesia before selecting Vietnam as their ultimate destination.
But it also warned that Vietnam must now compete against the three traditional regional destinations for FDI along with several emerging competitors such as the Philippines and Laos.
Vietnam’s biggest competitors for foreign investment: Share of FIEs that considered investing in country over Vietnam (%). Source: PCI 2015 report