The Vietnam Provincial Competitiveness Index
/I am a bit late to the story here, but there is a new version of the Vietnam Provincial Competitiveness Index (PCI) out (in late March), and it has tons of interesting points. It is mostly composed of survey data, so it is practitioners view on changes int he economy. Key positive data:
Corruption seems to be declining. Only 55% of firms are paying bribes (! That’s still crazy high), down from 66% in 2015. And just 7% of firms pay over 10% of their revenues in “informal charges.” That also seems crazy to me. Uncoincidentally, the main author of the report has already appeared in these pages - February 8, 2019 on competition and firm size. Scroll down to see more.
The business environment is less biased, meaning biased towards FDI (which I have some issues with - see the series on MMT) and state-owned enterprises (SOEs). So smaller local private firms feel that they can compete better.
Local governments are more efficient and friendlier, both of which have improved about 9pps from 2015. Overlapping inspections are lower, and time to completion of administrative procedures is faster for a small number of firms.
Of course, not everything is hunky dory. The “worrisome” trends:
Regulatory procedures are cumbersome, and are getting worse in some cases. It takes longer to finish all steps to start operations (from 10% of firms in 2014 to 16%). And the number of firms negotiating with the tax authority has increased (39% in 2013 to 53% in 2018). And about a third have difficulties with obtaining certificates.
Companies still don’t have access to planning documents, and relationships are still important to get access to provincial documents (according to 69% of firms). This reminds me of my time in Egypt, where it was always so difficult to figure out when government land auctions actually took place. So this is not only a Vietnam problem.
Also, land supply is an issue, at least for a small but significant portion of firms (19%, up from 15% in 2017).
The major points are shown in the graphics below. I will probably write more about this, because I was very surprised at some of the provincial data. Surprisingly, HCMC and Ha Noi, while high, are not even in the top 10% of provinces in terms of rank or overall score.
I will write more on this as I work through the document, but interesting points
SOURCE: VIETNAM PROVINCIAL COMPETITIVENESS REPORT
SOURCE: VIETNAM PROVINCIAL COMPETITIVENESS REPORT