Many program policies difficult in practice

NGUYỄN MINH THẢO, Head of the Business Environment and Competitiveness Research Department, at the Central Institute for Economic Management (CIEM), believes that businesses are looking forward to the non-financial support package called reform of the business environment. In a talk with Saigon Investment, Dr. Thảo expressed her views further. 
Illustrative photo.
Illustrative photo.

JOURNALIST: - Ma’am, one of the key tasks and solutions offered by the Socio-Economic Recovery and Development Program are institutional and administrative reforms and improving of the business investment environment as per solution group No. 5. How effective has it been so far?

Ms. NGUYỄN MINH THẢO: - The program of socio-economic recovery and development has been actively implemented by ministries, branches, and localities, with some tasks and solutions gradually yielding results. Thereby, businesses and people have felt the Government efforts to support and overcome the current difficult period together. Accordingly, enterprises have expressed their belief in a safe business environment and the recovery of the economy.

However, trust is still quite fragile. The number of businesses facing difficulties is still very large. Data from the General Statistics Office shows that some localities have low increase in the Index of Industrial Production (IIP) because production and business activities face many difficulties. Many businesses have not yet escaped difficulties, as shown in the number of 94,575 enterprises withdrawing from the market, an increase of 18.7% compared to the same period in 2021, calculated in the first seven months of the year. Most of these enterprises have temporarily suspended business operations and the pressure and challenges in the last months of the year are also increasing.

- Ma’am, how should we continue to support businesses to come back and overcome difficulties in the current situation?

- Although ministries, branches and localities have taken the initiative and made great efforts, many of the program policies are still slow or difficult to put into practice. The solution groups that support business recovery do not seem to have gained momentum, and even many places reflect that it is only support on paper. More attention should be paid to solutions to timely support and avoid the decline of domestic production. In this situation, businesses are looking forward to the non-financial support package which is the reform of the business environment. But reality shows that this group of solutions has not been paid enough attention to and even the administrative barriers are heavy in some areas.

To achieve the goal of economic growth, it is necessary for enterprises to contribute and develop more strongly. Therefore, the group of solutions on institutional reform, administrative reform, and improvement of the business investment environment needs to be paid more attention and also accelerated. This group of solutions not only brings immediate effect to businesses, but also ensures sustainable and long-term effectiveness.

- Ma’am, most enterprises believe that many reforms are still just on paper, while many associations and experts say reforms are slowing down. What do you think of such responses?

- Through practical research and reference to reports of ministries, branches, and localities on business environment reform, we realize that the level of concern of local leaders in this issue is clearer and more drastic, but still mainly reflected in the instructions and documents, not really implemented in practice. This shows that the level of attention of ministries and branches has not been commensurate with their roles and responsibilities, nor has it met the requirements for business environment reform as the Government has directed and the business community expects.

The Government has requested simplifying business conditions and cutting off unnecessary conditions. Looking at the numbers, the number of business registrations has decreased, but in reality, there are still many barriers. Therefore, the reform is only partial and there are still many unsubstantiated reforms. According to our observation, in the first half of the year there seemed to be no move related to this review and reduction. Although some localities periodically organize dialogues with enterprises, but according to enterprises after the dialogues, few issues have been resolved to the end. This fact has made businesses somewhat lose confidence in the government support for them.

I would also like to add, that recently business associations have expressed concern that the pre-check is coming back, and the trend of tightening management is resurfacing. We see that it is true that a tightening trend is emerging. In the draft documents, circulars and decrees, the recent drafting ministries are introducing more regulations of the nature of business registration. Some business barriers that have been removed before are to be restored, even adding some new conditions that are integrated in standards and technical regulations at the circular level.

- Ma’am, in your opinion what should be done for substantial and strong reform?

- Another reason is not that managers do not want to create favorable conditions for businesses, but because they are afraid of making mistakes and facing legal risks. It may be true for one law but wrong for another, so this is a big legal risk. Meanwhile, there is a lack of enforcement protection mechanism for them. With that mentality, there has arisen a situation where a document previously implemented by a department or branch must now consult all departments.

Reform will not be substantive and not strong without pressure from the Government, the community, and stakeholders. The Government must exert strong and constant pressure to regularly promote reform. The Government should immediately create a mechanism to ensure the safety of enforcement officers when handling administrative procedures related to many areas where documents have contradictions, overlaps and differences. Inspection, examination, and auditing activities should be based on the principles of risk management, towards better law enforcement and compliance, and not just nitpicking.

-       Thank you very much.

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