Improving the business environment: A package of "non-financial" solutions is expected

VCN - The Covid-19 pandemic has caused businesses to face many risks, with great and possibly long-lasting damage. In that context, institutional reform, creating a really open, convenient and safe business environment is the "non-financial" solution package expected by businesses; is an effective way to help businesses and the economy recover and develop.
Car production at Ford Hai Duong factory. Photo: VNA
Car production at Ford Hai Duong factory. Photo: VNA

Quick policy response but not really effective

The business sector is the main driving force, contributing greatly to economic growth, however, the prolonged Covid-19 pandemic has caused many businesses to face the risk of bankruptcy, and the domestic and international supply chains have been disrupted.

To accompany people and businesses, from the beginning of 2021, the Government issued more than 20 documents to remove difficulties and support businesses and people. Some notable documents such as Resolution No. 128/NQ-CP provisionally stipulating "Safely adapting, flexibly, effectively controlling the Covid-19 pandemic"; Decree No. 52/2021/ND-CP extending the tax payment deadline; Resolution No. 55/NQ-CP on reducing electricity bills; Resolution No. 68/NQ-CP, 126/NQ-CP, Decision No. 23/2021/QD-TTg to support employees and employers facing difficulties due to the Covid-19 pandemic.

At the local level, many provinces and cities also took action to support businesses. For example, Hanoi deployed a program to support digital signatures and e-invoices for newly established businesses in 2021, support fees for publishing business registration content, and delivery fees for administrative results about business registration.

With the desire to support businesses to carry out procedures more smoothly in the context of local application of social distancing due to the pandemic, some agencies have applied necessary measures such as Customs allows businesses to submit online documents to clear customs and supplement the paper version when the social distancing measures are eased.

The above support policies for businesses affected by the Covid-19 pandemic have partly removed difficulties for production and business; especially the solutions in 2021 are more feasible and involve simpler procedures. But there are still some support solutions that are still not really effective, not reaching the majority of businesses still facing difficulties.

In that context, improving the open, convenient and safe business environment has been identified as a meaningful "non-financial" solution for businesses to adapt and recover from the pandemic.

This is a long-term, sustainable solution that is expected by the business community. Therefore, the Government's Resolution No. 02/NQ-CP on improving the business environment and national competitiveness in 2021 and 2022 continues to identify a group of solutions to help people and businesses to recover. Restoring production and business, overcoming the negative impact of the Covid-19 pandemic is a key content.

Let the economy return to the growth trajectory

The Covid-19 pandemic has had a heavy impact on people, businesses and the economy, so businesses are looking forward to the government's institutional reforms and improvement of the business environment to remove barriers and contribute to the economy, which helps businesses overcome difficult times to recover and develop.

However, in 2020 and 2021, the Government's solutions focused on fighting the pandemic, supporting businesses in the form of extending tax payment time, social insurance, reducing land rent, and supporting social security.

In fact, barriers to investment and business activities are quite common. This exacerbates the difficulties that businesses are facing. For example, the situation of ambiguity, overlapping, duplication, contradiction, and difference in laws on investment, land, construction, and environment has been a major barrier.

The management and specialized inspection of exported and imported goods have had some positive changes in the 2015-2019 period, but there are still many shortcomings, which are costly for businesses and reform efforts have stagnated over the past two years. The implementation of online public services is not effective, so administrative procedures are still a significant barrier.

The business environment will affect how businesses overcome the pandemic and how well they take advantage of this opportunity. Institutional reform and creating a truly open and favourable business environment are fundamental factors for businesses to recover, contributing to bringing the economy back to a high and sustainable growth trajectory.

This is the time when businesses need the participation of ministries and branches in reforming regulations and procedures, removing barriers so that businesses can feel secure in investment, production and business and take preventive measures.

Therefore, a reform program to improve the business environment for the 2022-2025 period is indispensable, especially in the context of economic recovery and acceleration after the Covid-19 pandemic.

Accordingly, the focus of this program must include cutting investment portfolio, conditional business and reforming business conditions; eliminating barriers to investment due to overlapping, conflicting, unreasonable and different legal regulations; continuing to reform management and specialized inspection of imported and exported goods, ensuring compliance with international practices; promote the implementation of digital transformation solutions in state agencies as well as in enterprises; continue to support businesses to restore production and business, overcome the negative impacts of the Covid-19 pandemic.

By Dr. Nguyen Minh Thao Head of Department, Department of Business Environment and Competitiveness, Central Institute for Economic Management/ Bui Diep

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