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Vietnam business indicators lower than ASEAN 6 averages

Though Vietnam has successfully implemented a number of reforms to improve the business environment, almost all of its business indicators are lower than the averages of ASEAN 4 and ASEAN 6 nations, said an economist.

Vietnam business indicators lower than ASEAN 6 averages

Nguyen Minh Thao, deputy director of the Business Environment and Competitiveness Department at the Central Institute for Economic Management (CIEM), gave such comments based on data in the World Bank report “Doing Business in 2017: Equal Opportunity for All” released on October 26.

According to the report, Vietnam has moved up nine spots in the business environment ranking for 2017. It now stands at 82nd, versus 91st in 2016.

Of the ten topic sets, Vietnam performed better in five with “protecting minority investors” rising 31 spots, from 118th to 87th, thanks to adjustments in the 2014 Enterprise Law.

The nation stands 93th in “trading across borders”, compared to 108th in the previous report. This improvement is attributable to a reduction in the time needed for import-export procedures, backed by the Government’s effort over the past two years. 

Regarding tax payment, Vietnam moves up 11 notches since the time needed for preparing, filing and paying taxes falls by 230 hours, from 770 hours to 540 hours.

It takes enterprises in Vietnam 46 hours to get electricity, well below 59 hours in the previous report, supporting the country to jump by five places.

Vietnam ranks 125th in resolving insolvency, one spot higher than last year.

Except for the five topic sets, the country’s ranking edges down in five other indicators including starting up a business, construction permits, access to credit, registering property and enforcing contracts. The reason is that Vietnam did not make any reforms in these sectors while other nations made considerable progress.

Thao of CIEM said the WB report showed the Vietnamese Government has concentrated effort on polishing the business environment, especially the execution of the 2014 Enterprise Law and Decree 19 on improving the business environment and the national competitiveness, and creating favorable conditions for residents and companies to do business. 

Compared to ASEAN nations, Vietnam moved up nine spots, after Brunei with 25 spots and Indonesia with 15 spots. Meanwhile, Malaysia’s ranking dipped by one spot.

Thao said though Vietnam successfully implemented a number of reforms in some sectors to make the business environment better, it has yet to pay due attention to other sectors.

The country undertook three out of 10 reforms including protecting minority investors, paying taxes and trading across borders while Indonesia carried out seven reforms and Brunei six reforms.

She said Vietnam’s business indicators are lower than the averages of ASEAN 4 and ASEAN 6 countries. A couple of regional countries like Indonesia and Brunei implemented more reforms than Vietnam did.

Thao said Vietnam will have to implement more reforms in all sectors to catch up with other regional nations.