More than a week ago, at a conference on implementation of Resolution No.02/NQ-CP on improving the business environment and enhancing national competitiveness, the Ministry of Planning and Investment (MPI) was listening to the voices and concerns of businesses and associations.

“If more than three businesses or associations claim the same issue, we consider it as an issue to study and amend soon to remove challenges for them,” Tran Duy Dong, Deputy Minister of Planning and Investment said after listening to dozens of comments on numerous issues that businesses are struggling with.

Resolution 02 is launched in early January every year. However, many problems voiced for some time have not been tackled yet. More seriously, during the process of amending inadequate regulations, newly released or redrafted rules add even more new problems.

“For instance, Decree No.10/2020/ND-CP asks that passenger transport companies must send the content of their contract to the department of transport of the locality via email before each journey. With hundreds of trips starting each day, this costs these companies a large amount of money, whereas the management unit has to receive a huge quantity of emails per day to process,” said Dau Anh Tuan, deputy general secretary of the Vietnam Chamber of Commerce and Industry (VCCI).

Another issue comes from the Law on E-Transaction 2023, effective as of July 2024, which stipulates that a ‘trust service’ is a conditional business line whose operations include the provision of ‘electronic data authentication services’, licensed by the Ministry of Information and Communications.

However, according to Decree No.52/2013/ND-CP, the service of ‘electronic contract authentication in commerce’ is licensed by the Ministry of Industry and Trade. This seems to imply that a trust service must register for two licences from two ministries.

Yet another inadequacy lies in an issue that has existed for seven years already. As stipulated in Decree No.09/2016/ND-CP by the government, iodine must be added to the salt for cooking and food processing, while wheat flour for food processing must include iron and zinc.

“This goes against the principles of risk management and is not in compliance with the recommendations of the World Health Organization, possibly leading to harmful influences on consumer health,” Tuan said.

The government has already released Resolution No.19/2018/NQ-CP, asking for the amendment of this regulation, yet until now, there is no decree for this, Tuan added.

“Obviously, the introduction of proper policies is a necessary condition to provide a better business environment, but it is the improvement in the capability to carry out those policies effectively that truly forms a friendly and favourable environment for enterprises,” Tuan said.

The General Statistics Office revealed that in the first two months of 2024, Vietnam had 41,100 newly registered or reactivated businesses, a rise of 8.5 per cent compared to this time last year. However, the number of companies permanently stopping their operation was 63,000, an increase of 22.5 per cent on-year.

This has attracted the attention of the government to improve the business environment for a brighter economic picture. It has launched several activities and introduced various resolutions and directions on the matter.

According to experts, there are some reasons for delays in handling business recommendations, including a huge amount of work, with high requirements and tight deadlines, under intense pressure from both above and below. This requires all parties, including state management agencies, businesses, and associations, to be more responsible with recommendations and proposals.

“I remember the first seminars with the tax and customs industry were very tense with many conflicting views between management agencies and businesses, but since then, some surveys on taxpayer satisfaction that were conducted by the VCCI have been used by the General Department of Taxation as data for public service inspection. After 10 years, the tax and customs sectors have been recognised as having the most improvement,” Tuan of the VCCI explained.

Ministries are now reviewing and simplifying business regulations following Resolution No.68/NQ-CP, issued in 2020. Meanwhile, the prime minister’s task force to review legal documents is carrying out its annual mission to adjust any inadequate regulations.

During 2021-2023, it was able to simplify nearly 2,500 business regulations. The prime minister has also approved proposals to simplify more than 1,100 more business regulations.

According to the Central Institute of Economic Management, on international rankings, market development has been improving significantly, from 147th in 2017 to 59th in 2024, and ranked 11th among 39 economies in Asia-Pacific.

The sustainable development index has increased continuously, ranked 55th in 2022. The global innovation index in 2023 was ranked 46th, improving two places compared to 2022.

According to targets stated in Resolution 02, in 2024 market entry (new formations and resumptions) will grow by at least 10 per cent from 2023, while corporate bankruptcies will rise by less than 10 per cent.

Vietnam will rise in the IT Infrastructure Index by at least three places in the rankings, the Environmental Quality Index by at least 10 places, the ICT Services Export Index by at least five places, the Priority Index for tourism and travel by at least five levels, and the Tourism Service Infrastructure Index by at least three spots.

To accomplish these goals, all levels, sectors, and localities must overcome difficulties and boost their innovation and reforms in the spirit of “disciplined responsibility, timely actions, accelerated creativity, and sustainable efficiency,” the resolution states.

In addition, Resolution 02 underlines several key solutions to removing legal inadequacies in investment; as well as invigorating IT applications, communication, and data sharing among state agencies to improve administrative procedures.

Furthermore, the resolution will enhance access and absorption of capital for businesses, stimulating companies to invest and manufacture towards sustainable development. The government also requires leaders of central and local agencies as well as the VCCI to promptly capture and coordinate with each other to immediately resolve difficulties for businesses.

“Resolution 02 is expected to revive the spirit of reforming the business environment and sharpening national competitiveness to complete socioeconomic development plans and state budget estimates in 2024,” said Dong from the MPI. “These solutions aim to clear bottlenecks in the economy because strong reforms and improvements in the business environment are what the business community need the most.”