The PCI report for 2021 was made in the context that the economy was heavily affected by the Covid-19 pandemic, however, the feedback from more than 11,300 businesses showed that institutional reform remains an important solution taken in parallel with fiscal and monetary instruments.

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The business community also highly appreciated the authorities of many provinces and cities for their dynamic, pioneering, and responsible working spirit and ability to effectively solve new and urgent problems.

Accordingly, 87% of enterprises agreed that “state employees handle work effectively”, 83% of enterprises said that “state employees are friendly”, and 75% of enterprises agreed with the statement that “firms don’t have to make many trips to complete procedures”.

Anti-corruption efforts are effective in reducing the informal cost burden for businesses. In particular, informal costs that enterprises have to pay to continue the downward trend in most business-related fields. The percentage of businesses having to pay informal charges in 2021 decreased to 41.4% compared to 44.9% in 2020. This is also the lowest level in the past 16 years (it was 70% in 2006).

In addition, the size of informal charges also reduced significantly over time, with the number of enterprises having to spend more than 10% of turnover to pay informal charges decreased to only about 4.1%, significantly lower than five years ago (about 9.1% in 2016).

However, PCI 2021 also pointed out a series of issues that need to be further improved such as reforming procedures for granting business licenses, improving access to land and business premises, and more effective implementation of the Law on Supporting Small and Medium-sized Enterprises, and others.

In addition, the proportion of enterprises paying informal charges remains high in construction inspection (67.22%) and conditional business licensing (61.36%).

Therefore, localities need to conduct further substantial reform of business conditions and economic institutions to create the most favourable conditions for enterprises and improve PCI. Because PCI is a set of action indicators, promoting real action in local governments it is also the basis for reviewing the achievement of results, thereby improving activities in support of businesses.

From the PCI 2021 report, it can be seen that local governments still need to continue reforming, to become a “pedestal” for businesses to stand and develop as well as have more opportunities to participate more deeply in the global economy.

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Registered capital of newly established businesses represents year on year increase

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UKVFTA - Solid lever for Vietnamese businesses

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Source: NDO