PCI 2008: economic management quality slows down
12/12/2008

 

 

The PCI has been annually released by the VCCI and the Vietnam Competitiveness Initiative project (VNCI) since 2005. The PCI surveys have become an important tool used by government leaders, academics, financial analysts, entrepreneurs, and the media as a way of understanding how leadership can influence economic performance, as well as guide provinces on how to increase economic competitiveness. 

 

For the fourth consecutive year, the 2008 PCI survey is the largest and most comprehensive assessment and ranking of the performance of provincial governments based on the views expressed by over 7,820 domestic entrepreneurs and managers from firms across Vietnam’s 64 provinces, though 2008 scores are generally lower across every level of the PCI rankings. The median province received a score about 2.4 points lower than in 2007, dropping from 55.6 to 53.2. Median scores remain higher than in 2006 (52.41).

Reductions of points occurred most often in the two fields of labour training and policies to develop the private economic sector, reflecting businesses’ displeasure with public service quality and the administration of local leaders. Two new indexes were added to the PCI report this year: an Infrastructure Index and an Information and Communications Technology (ICT) sub-index.

VCCI Chairman Vu Tien Loc said despite progress related to business registration (from 15 days to 12.25 days), taxation policy-related improvements and others, the provincial business environment still faces three problems: administrative formalities, labour and infrastructure.

Troublesome problems associated with administrative formalities increase compared to 2007 with 22.99% of surveyed businesses saying that they spent 10% of their time on this and 22.71% saying that unofficial fees caused difficulties for their business.

Labour and human resources continue to be a problem with just 18.5% saying they were satisfied with labour quality. Infrastructure is also a burden on businesses. Each company lost 7.5 days of work and 71% of production businesses were affected by poor infrastructure. Businessmen also complained a lot about power cuts.

Da Nangachieved the best score this year over Binh Duong, which has held the top ranking three years in a row. Their final scores (72.18 and 71.76) are statistically indistinguishable. Vinh Phuc, Vinh Long, Dong Thap and Long An occupy the following positions. Dien Bien stands at the bottom, replacing Dak Nong. Above Dien Bien are Bac Kan and Bac Lieu. The new feature of PCI 2008 is a comparison of provinces’ previous positions on the list, through which one can see the progress of Ca Mau, Long An and Ha Nam. The two provinces of Binh Dinh and Vinh Long have been ousted from the very good group. Binh Dinh ranked fourth in 2007, to place eleventh in 2008, though it is still in the good group.

The number of provinces which are listed as having very good economic management quality is less than last year while the number of localities with low economic management quality is higher. The index is a way for provinces and cities to realise their weakness and strengths to promote reforms and also a reference for international agencies in defining priority for their aid.

 

                                                                            Source: Using source of Vietnamnet Bridg