Business environment is really "bright", isn’t it?

As many as inappropriate and unnecessary business conditions and ineffective management have not been reduced. Picture: ST.

Not really simplified

Experts say that the business environment has not really been improved, which is one of the reasons why businesses are frustrated and leaving the market is rising. According to data from the General Statistics Office, the number of enterprises temporarily suspended in the first 9 months of 2018 is 73,103 enterprises, an increase of 48.1% over the same period last year.

Commenting on the matter, according to economist Pham Chi Lan, we are constantly talking about improving the business environment and the Prime Minister also focused on improving the business environment, "I went and met a lot of companies and asked about their real feelings, the real sharing of enterprises to improve the business environment, and many businesses said that the business environment has not improved as much as desired." The example of the current administrative procedure is a single window, but expert Pham Chi Lan stressed, "In order to go through that window, it is necessary to knock on many other windows beforehand, and the window must "lubricated" before that can be approved. Even ministries, they say, improve, but the reality is much more harassing."

"We take a lot of time and effort to try and improve the business environment on different levels, but the results are not equal to what we did. As the world moves so fast, we keep on skipping this one, choosing the other one, without having our own way, and this is the reason why some enterprises give up the market," expert Pham Chi Lan emphasized.

In the latest report on the implementation of Resolution No. 19 of the Government on continuing the implementation of major tasks and solutions to improve the business environment and enhance national competitiveness, the Ministry of Planning and Investment shows that according to reports from ministries, agencies and localities, most of the targets have been met, but the review found that many contents were not meaningful. In some cases, the report stated the general enforcement action, sometimes only repeating the content of the Resolution, was unclear (especially the reports of some localities).

Up to now, there have been two decrees amending business conditions (including Decree No. 08/2018 / ND-CP on amending some decrees relating to business conditions under the Ministry of Industry and Trade’s management scope, and the Government's Decree No. 100/2018 / ND-CP on amending, supplementing and abolishing a number of regulations on business investment conditions in the State management domains of the Construction Ministry). 858 business conditions are reduced, simplified. "The reduction in business conditions is only 30% of what is required. In addition to these two decrees, no further decree on the modification of business conditions has been issued,“ the Ministry of Planning and Investment (MPI) said.

Some of the revised business conditions may be just word corrections or correction of content, but it is not really simplified. There are still inappropriate and unnecessary business conditions; ineffective management has not been reduced. For example: The regulations on training, certification by the state management agencies are still quite common. The business conditions hidden under the "comply with the regulations of the Ministry" has not been removed. Particularly, some of the content changes are more formal, rather than reformed targets for business. Therefore, the spirit of "cutting down" has not been demonstrated. Even more, the preliminary review shows the addition of new business conditions, in particular the draft Decree amending each of the Decrees issued by the Ministry of Transport.

To review the causes of enterprises leaving the market

Regarding to business environment, Dr. Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM) said, "We have solved many difficulties for enterprises, such as determination to abolish 50% of business conditions, improvement of investment environment.” However, Dr. Nguyen Dinh Cung also said that the production and business activities of enterprises are not really secure because businesses not only face the risks of the market but also many juridical risks.

According to Dr. Nguyen Dinh Cung, the reason is our legal system still contains many limitations such as not specific, unclear, not transparent ...; the application of arbitrary rules is unclear, which makes it impossible for businesses to respond. With these risks and to avoid the hassle of inspection, the solution of enterprises is that they do not want to widen their scale of business, besides, in many cases the company wants to grow larger, but it is impossible.

On this issue, representatives of a coffee business enterprise said that for the implementation of regulations on food hygiene and safety, at same time the regulator must publish the quality of products. There are times when there is no need and each time the change is so complicated, it takes a lot of time. According to this company, domestic sales are more difficult than the procedures for export products, so businesses are looking forward to the administrative procedures of state management agencies becoming increasingly clearer, transparent and with good regulations.

Many opinions suggest that we have gone through 5 years implementing Resolution 19 on improving the business environment, and 3 years implementing Resolution 35 on business development. According to the target, by 2020 we will strive to have 1 million businesses, so there are two more years to accomplish this goal and to achieve this there is much more to think about. However, the problem of reaching 1 million enterprises by 2020 is not as important as many businesses are leaving the market. If only considering the number in 2018, now there are about 345 new businesses that have entered the market, but corresponding to that there are about 270 enterprises that have left, a number worth pondering. Having businesses enter or leave the market is a normal issue of business production, but clearly, the number of enterprises that have stopped operating is high, up to 48% compared with 2017. It is time to review, find out specific causes, see what percentage of them are due to the rules of the market, the business strategy or the barriers of the business environment, in order to have support measures with a view to limiting this situation.

According to Dr. Nguyen Dinh Cung, to grow more powerful Vietnamese companies, it is necessary to change the system of thinking, which is the basic principle of institutional development. Concern about the situation of enterprises will be large enough to stop it, for example as in the case of Duc Viet sausages of entrepreneur Mai Huy Tan - one of the leading enterprises in the food industry had to sell the business for a business in Korea because of many problems when expanding his business. Dr. Nguyen Dinh Cung emphasized that institutional reform is not reform of administrative procedures, because administrative reform is not enough, and the fundamental issue is institutional reform.