The Provincial Competitiveness Index (PCI) 2022 is the recognition of the business community on the innovation and creativity efforts of local authorities over the past year. While Bac Giang, a province in the northern midland region, made great progress, ranking second, Hanoi and Ho Chi Minh City downgraded compared to the results in 2021. This reflects fierce competition in development, forcing localities to thoroughly grasp their strengths and weaknesses to make changes to avoid lagging.

Bac Giang province is expanding Nhu Nguyet Bridge connecting with Bac Ninh province, creating favourable traffic conditions and attracting investment. (Photo: DANG GIANG)

Bac Giang province moved up 29 places and advanced 8.06 points in PCI 2022, ranking second among 63 provinces and cities nationwide. The province was highly appreciated by the business community for the dynamism and creativity of the provincial authorities, the improvements to solving difficulties for enterprises and the more transparent business environment.

Worthwhile efforts

Bac Giang led the country in two subindices including informal charges and law and order. Businesses also appreciated the province’s organisation of dialogues to listen to and promptly solve their problems. It is noteworthy that the informal costs of enterprises continue to fall.

CEO of Yadea Vietnam Rong Wen You said, during more than three years of investing in production in Bac Giang, his company has received active support from provincial agencies. The companionship of the provincial leaders as well as the effective settlement of investment procedures by relevant agencies have created confidence for his company, to continue expanding production in the province, he noted.

In 2022, Hai Phong came in third in PCI rankings and the city was listed in the top 10 localities with the best economic management for the fifth consecutive year. Hai Phong had five among 10 subindices of PCI advanced compared to the previous year.

This result was thanks to the city’s solutions to boost administrative reform and build a modern and professional digital government, among others.

This year, the PCI report includes a Provincial Green Index (PGI) for the first time. Lang Son, a northern border province facing many difficulties, was ranked second in terms of PGI. Director of the Lang Son Department of Industry and Trade Nguyen Dinh Dai said, that the province has great potential to develop renewable energy and clean energy, especially wind power.

The province allowed 18 investors to survey and build planning documents for 35 energy projects, including 32 wind power projects, two biomass power projects and one waste-generating power project. BayWa r.e company from Germany is preparing to build three wind power plants in Lang Son, with a total capacity of 240 MW and a total investment of over 9 trillion VND (383.47 million USD), in July 2023.

The northern province of Bac Kan is a poor province with low budget revenue but it moved up 13 places to the 35th in PCI 2022 and ranked seventh in the PGI rankings, thanks to its shift from ‘brown’ to ‘green’ economic development.

Determined to rank up

The PCI 2022 also showed a decline in the ranking of leading economic hubs. Hanoi lost its 10th place, dropping to 20th place, while Ho Chi Minh City dropped 13 places to rank 27th. This showed inadequacies in the business environment of the two big cities, which will affect budget revenue and national economic development.

Hanoi saw declines in seven out of 10 subindices compared to 2021. Notably, entry costs and access to land subindices were at a relatively low position (59th), while the proactivity of the provincial administration ranked 53rd out of 63 provinces and cities.

Hanoi issued Directive No. 13 on improving PCI in August 2022, however, there has been no breakthrough yet.

Enterprises carrying out administrative procedures at the Hanoi Department of Planning and Investment. (Photo: DUY DANG)

Meanwhile, the unattractiveness of the investment and business environment in Ho Chi Minh City has been warned by many economic organisations, businesses and investors, in recent times. According to the Ho Chi Minh City Union of Business Association (HUBA), the city’s administrative reform has not been effective and has not created favourable conditions for businesses.

Information technology has been applied at all levels, but most enterprises and people cannot do it themselves online and still have to hire services. Some procedures such as the issuance of a certificate of land use rights and construction permits remain congested, while enterprises are inspected too much.

Hai Duong is a province with great potential for economic development, located in the centre of the Northern Key Economic Zone, but the province’s PCI dropped 19 places to 32nd in 2022.

With the determination to improve the PCI, the People’s Committee of Ho Chi Minh City issued a plan to enhance the investment environment in 2023, with many tasks and solutions.

First of all, the city will boost administrative reform and enhance the coordination between agencies in the city, to solve difficulties for investors and enterprises. In May 2023, the city will issue a plan to assess its District and Department Competitiveness Index (DDCI) 2023 and a detailed plan for raising the PCI.

Vice Chairman of the municipal People’s Committee Vo Van Hoan said, that the assessment of DDCI will help departments, districts and localities realise their strengths and limitations, to enhance the settlement of administrative procedures, creating a more favourable environment for investment, production and business activities.

To raise its PCI, Hanoi will tighten discipline among public services and public workers.

The leading localities in PCI are also determined to continue overcoming limitations and improving their governance capacity. The leader of Bac Giang province said that the province will focus on solving difficulties and obstacles of the local authorities, at all levels and facilitating the operation of enterprises to create motivation for development.

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