Released Monday by the Vietnam Chamber of Commerce and Industry (VCCI), the PCI 2019 report, which analyzes responses from nearly 12,500 Vietnamese businesses, notes Quang Ninh was the most competitive province in the country with 72.4 points, an increase of 3 points over PCI 2018. The northern province increased its score in eight out of 10 component indexes.

The report also notes significant progress made by the Mekong Delta provinces of Dong Thap and Vinh Long and the northern province of Bac Ninh.

The three come next, while the remaining places in the top 10 ranking were taken by Da Nang, Quang Nam (central region), Ben Tre, Long An (southern region), Hanoi and Hai Phong (northern region).

Lai Chau and Bac Kan in the north and Dak Nong in the Central Highlands, despite being in the bottom group, have made dramatic positive changes compared to the previous year in administrative reform, business environment and private enterprises development, the report says.

The PCI is designed to assess and rank the performance, capacity and willingness of provincial governments to develop business-friendly regulatory environments for private sector development.

Dau Anh Tuan, head of the VCCI's legal department, said that a remarkable aspect of the ranking this year was the average of 65 points, the highest in 15 years since the first PCI report was published.

"The gap between the top and last ranking provinces has been "shrinking", showing the change in quality of administration, dynamism and creativity at the provincial level," he said.

"While the lower ranked group have narrowed the gap with the leading one, some "reform stars" have not made expected strides," said VCCI chairman Vu Tien Loc. He added some overlap in legal systems and inadequacies were preventing creative efforts.

In addition, reforms in land-related issues, taxes and social insurance have failed to meet expectations, Loc said. Informal costs have been falling continuously for the past three years but were still high at 53 percent of the enterprise's expenses. More than half the surveyed businesses said they had to bear unofficial expenses.

Some PCI component indicators revealed that 70-80 percent of businesses were satisfied with the behavior of public authorities.

This is also the first time that a PCI report analyzed automation and digitalization trends in production of goods and provision of services; and included predictions of labor and employment trends.

Loc said the post-pandemic world would be different, with international trade and investment flows being reversed. "The global supply chain will be reshaped, more reliably and sustainably, pushing businesses to be more creative and responsible." 

"We have a golden opportunity to restart. Provinces will have the opportunity to welcome investment flows of higher quality. Institutional reform and improvement in PCI and competitiveness will be the most important foundation for the new future," he noted.