The Vietnamese businesses in 2023 and the first two months of 2024 tend to decline in investment demand, business and resilience. Photo: H.Anh

The return of Resolution 02

The business environment is an important pillar of institutional reform to create the most favorable conditions for businesses of all economic sectors to develop; and contribute to the economic development of the ministries, locality and country. Therefore, the Government determines that improving the business environment and enhancing competitiveness is an important and regular task that is implemented throughout from the central to local levels.

Since 2014, the Ministry of Planning and Investment has advised the Government to annually issue Resolutions on improving the business environment and enhancing national competitiveness (Resolution No. 19/NQ-CP and Resolution No. 02/NQ-CP). In 2023, the Government added the task of business environment reform to Resolution No. 01 to affirm that the business environment is a task in socio-economic management and development. However, because it is one of the tasks of Resolution No. 01, the level of interest and motivation for the reform of ministries, branches and localities is weaker.

For the above reasons, the Government has restored the Program to reform and improve the business environment by issuing Resolution No. 02 dated January 5, 2024 to create pressure and arouse motivation and spirit of reform for ministries, branches and localities.

The return of the Resolution carries the message that improving the business environment is a key priority task, demonstrating the Government's level of concern and companionship with the business community, thereby contributing to strengthening the confidence of investors and businesses; arousing motivation and entrepreneurial spirit; thereby promoting economic recovery and development.

Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM) spoke at the conference "Implementing Resolution No. 02/NQ-CP: Reform creates a fulcrum to promote business development". Accordingly, in 2024, advantages and difficulties is expected to have both difficulties and advantages. However, the difficulties will be more. This reality shows that businesses are facing many challenges. Therefore, all efforts to reform the business environment need to be accelerated and implemented more practically to strengthen trust and create business motivation for businesses.

In Resolution No. 02 of 2024, the Government continues to determine reform goals according to international practices, selectively focusing to suit the problems and shortcomings of each year.

At the same time, the Government also targets to increase the number of new businesses by at least 10 percent from 2023, the number of businesses withdrawing from the market in 2024 will increase by less than 10% compared to 2023.

The ultimate goal is to have more new businesses, and they can operate more conveniently and effectively. Along with that, it reduces the number of businesses stopping, temporarily suspending operations, or closing; and increases the number of businesses with innovation, green transformation, and digital transformation activities.

Create motivation

From a business perspective, Deputy Secretary General, Head of the Legal Department of the Vietnam Confederation of Commerce and Industry (VCCI) Dau Anh Tuan acknowledged that, in addition to the more favorable aspects (for example, documents are simplified, procedure processing time is shortened, electronic implementation methods are more popular, many regulations related to business conditions are promptly amended...), some reduction and simplification plans are still formal; the proposed cuts lack breakthroughs, and some calculations of cut costs are still inaccurate.

Many problems reported by businesses have not been handled. “In addition to reviewing and cutting current documents, there is a situation where documents are being re-drafted creating new barriers. Businesses are not favorable in their approach and participation in reviewing, reducing, and simplifying business regulations," Mr. Dau Anh Tuan added.

Assessing the current state of the business environment in 2024, according to Dr. Nguyen Minh Thao - Head of the Business Environment and Competitiveness Department of the Central Institute for Economic Management (CIEM), Vietnam's business freedom ranking in 2024 is at “average”.

Vietnam is ranked 59th globally, 11th out of 39 economies in the Asia-Pacific region. The Vietnamese businesses in 2023 and the first two months of 2024 tend to decline in investment demand, business and resilience. The business environment is still unattractive, registered capital has decreased and labor attraction has not been achieved compared to the time before the Covid-19 pandemic.

At the local level, reform efforts are recognized but the level is still different. The business environment still has many challenges. In addition, barriers to industries and business registration are still major obstacles, increasing compliance costs and reducing motivation to invest and do business.

Monthly Government meetings always emphasize business environment reform. There are many guiding documents from the Government and the Prime Minister on reforming the business environment, business conditions, and administrative procedures, but the change is still slow, and there are even areas with heavier barriers.