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Da Nang ranks as Vietnam’s top business destination for third consecutive year

Da Nang ranks as Vietnam’s top business destination for third consecutive year

The central city of Da Nang has cemented its spot as the easiest Vietnamese locality to do business, topping the country’s Provincial Competitiveness Index (PCI) list for the third straight time.

The central economic and tourism hub, some 850km northeast of Ho Chi Minh City, logged a score of 68.34 in the 2015 PCI report released Thursday by the Vietnam Chamber of Commerce and Industry (VCCI) and the United States Agency for International Development (USAID).

According to the VCCI, the new Center for Public Administration, established by Da Nang in September 2014, plays a significant role in the city’s performance, particularly in providing transparency, reducing transaction cost, and facilitating proactivity.

“The center, which coordinates local policy and serves as an information clearing house, has proven to be effective in saving time, effort, and money for people, businesses and public officials,” the report commented.

Da Nang also topped the 2013 and 2014 lists, with respective scores of 66.45 and 66.87, showing continued annual improvement in performance.

The southern province of Dong Thap and the northern province of Quang Ninh round out the 2015 PCI’s top 3 localities to do business and are considered to be in the ‘excellent tier.' Other tiers are high, mid-high, mid-low, low, and very low.

At the bottom of the list are Lai Chau and Ha Giang, both northern mountainous provinces, and Dak Nong Province in the Central Highlands.

Ho Chi Minh City took sixth place with a score of 61.35, whereas Hanoi stood at the 24th notch, scoring 59.

The 2015 PCI is the 11th edition of the list since its 2004 inaugural issue.

In the 11-year history of the PCI, Da Nang has secured the top spot for six times.

The PCI is designed to assess the ease of doing business, economic governance, and administrative reform efforts by Vietnam’s provincial and city governments in order to promote private sector development, according to VCCI.

“The PCI augments the collective voice of private entrepreneurs in Vietnam regarding economic governance in their province and the country,” it said.

The overall PCI index score comprises ten sub-indices, namely entry cost, land access, transparency, time cost, informal charges, policy bias, proactivity, business support services, labor training, and legal institutions, which all reflect economic governance areas that affect private sector development.

For a province to perform well on the PCI, it must have low entry costs for business start-up; easy access to land and security of business premises; and a transparent business environment and equitable business information.

Other factors include minimal informal charges; limited time requirements for bureaucratic procedures and inspections; minimal crowding out of private activity from policy biases toward state, foreign, or connected firms; and proactive and creative provincial leadership in solving problems for enterprises.

Finally, that province should also have developed and high-quality business support services; sound labor training policies; and fair and effective legal procedures for dispute resolution.

The 2015 PCI survey was carried out on a sample size of 8,335 randomly selected enterprises and had a response rate of about 60 percent, excluding closed businesses and firms with incorrect addresses.

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