The situation of Vietnamese enterprises in 2023 and the first 2 months of 2024 tends to decline in investment demand, business and resilience. Illustration photo: H.Anh

The return of Resolution 02

The business environment is an important pillar of institutional reform to create the most favourable conditions for enterprises of all economic sectors to develop; making a meaningful contribution to the economic development of the industries, localities and country. With that importance, the Government determines that improving the business environment and enhancing competitiveness are an important and regular task which are implemented throughout from 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 incorporated the task of business environment reform into a content of Resolution No. 01 to affirm that the business environment was a task in socio-economic management and development. However, because it was only one of the tasks of Resolution No. 01, the level of interest and motivation for reform of ministries, branches and localities was weaker.

For the above reasons, the Government has restored the Program on reforming and improving the business environment by issuing Resolution No. 02 dated January 5, 2024 to create pressure and arouse motivation. reform spirit of 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 confidence of investors and enterprises; arouse motivation and entrepreneurial spirit; thereby promoting economic recovery and development.

Speaking at the conference "Implementing Resolution No. 02/NQ-CP: Reform creates a fulcrum to promote enterprise’s development", Dr. Tran Thi Hong Minh, Director of the Central Institute for Research and Economic Management (CIEM) said, forecasting that in 2024, advantages and difficulties would continue to mix, but the difficulties would be more. This reality showed that enterprises were facing many challenges and more than ever, efforts to reform the business environment need to be accelerated and implemented in a practical way to strengthen trust and create business motivation for enterprises.

In Resolution No. 02 of 2024, the Government continues to determine reform goals according to international practices, selective focus to suit the problems, shortcomings and limit ations of each year. At the same time, the Government also determines a specific target for the number of enterprises entering the market to increase by at least 10% by 2024 compared to 2023; The number of enterprises withdrawing from the market in 2024 will increase by less than 10% compared to 2023. The ultimate goal is for more enterprises to be established, operate more conveniently and effectively, and the number of enterprises stopping or temporarily suspending operations reduce, increasing the number of enterprises with innovation, green transformation, and digital transformation activities.

Unleash motivation

Looking from a perspective of enterprises, 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 favourable aspects (simplified documents, shorter procedure time, more popular for electronic implementation method, amendment of many problematic regulations related to business conditions...), currently a number of plans on reduce and simplification were also in form; the proposals on cutting lacked breakthroughs, and some calculations of cutting costs were still inaccurate. Many problems reported by enterprises were not considered. “In addition to reviewing and cutting current documents, there is a phenomenon that documents being re-drafted are added new barriers. Enterprises are not favourable 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, Dr. Nguyen Minh Thao - Head of the Business Environment and Competitiveness Research Committee at the conference (CIEM) said that Vietnam's ranking in 2024 was at "average freedom". Vietnam ranked 59th globally, 11th out of 39 economies in the Asia-Pacific region. The situation of Vietnamese enterprises in 2023 and the first 2 months of 2024 tended to decline in investment demand, business and resilience. The business environment was still unattractive, registered capital had decreased and labour attraction had not been achieved level 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 industry 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 reform change is still slow, and there are even areas with heavier barriers.