Ho Chi Minh City and Binh Duong drop out of PCI top 10

In the 2019 Provincial Competitiveness Index (PCI) released yesterday (May 5), Binh Duong province and Ho Chi Minh City dropped to the 13th and 14th, with significant improvements reported in other cities and provinces.

The upper echelons of the PCI 2019

In the 2019 PCI, Quang Ninh province retained the top place for the third consecutive year with 73.4 points. It is followed by Dong Thap, Vinh Long, Bac Ninh, Danang, Quang Nam, Ben Tre, Long An, Hanoi, and Haiphong. Most cities and provinces are recognised to have achieved remarkable improvements to retain their top ranking.

Compared to the top 10 of the 2018 ranking, Long An and Ben Tre have slipped lower in the top 10, while Binh Duong (6th in 2018) and Ho Chi Minh City (10th in 2018) have actually dropped to the 13th and 14th spots, respectively. The ranking has reported little development at these two localities, which reached a little over 67 points from 66 and 65.3 in last year's PCI.

Meanwhile, provinces on the top of the 2019 PCI commonly improved by 3 points (Quang Ninh, Danang, Quang Nam, Hanoi, Can Tho, Thai Nguyen, Haiphong), or even 6 points (Vinh Long, Bac Ninh).

This information was released in the annual PCI report by the Vietnam Chamber of Commerce and Industry (VCCI) and the United States Agency for International Development (USAID) in Vietnam. Over the last 15 years (2005-2019), there have been 141,011 respondents for the report, including almost 125,162 domestic enterprises and 15,849 foreign-invested enterprises across the nation.

PCI measures the actual quality of the economy through best governance practices already found in provinces, thereby promoting business development. The 10 PCI subindices are entry costs, land access, transparency, time costs, informal charges, policy bias, proactive leadership, business support services, labour training, as well as law and order.

According to Dau Anh Tuan, general director of the VCCI’s legal department and director of the PCI programme, “The 2019 PCI survey result shows a fairly bright outlook for the business environment in Vietnam, with the positive momentum of economic development across provinces and cities maintained.”

The average PCI score has reached a record high. The top-performing province has raised the bar, but the gap between the provincial rankings is narrowing. Infrastructure has considerably improved.

Informal charges continue to shrink, there is less bias towards certain types of firms, security and order are more reliable, and there have been positive changes to administrative procedures.

However, much can be done to further improve transparency, labour quality, and business support services. Strong, substantive reforms are needed to cut down post-registration administrative procedures and improve business conditions.

The report also points out some significant obstacles that private firms are facing, like finding customers, capital, human resources, and some issues related to land, investment, and construction.

“To promote stronger private sector development, timely and effective policies are needed to address the identified problems and foster a transparent, business-enabling environment in Vietnam,” Tuan said.