Hanoi and Ho Chi Minh City saw their Provincial Competitiveness Index (PCI) ranking tumble by 10 and 13 places respectively last year as investors expect more reforms in their business environment.
The index, which has been studied and published by the Vietnam Federation of Commerce and Industry (VCCI) since 2005, indicates how a locality in Vietnam has been developing its policies to create a business-friendly environment and to attract investment.
Quang Ninh for the sixth time in a row led the ranking with 72.95 index points.
The province since 2017 has always come in first place with its many initiatives to attract investment and conduct administrative reforms. One of its priorities is to use public investment to mobilize private investment.
A typical administrative process of the province is comprised of five steps that can be done within its public administrative center. The province now wants to bring this process online.
Quang Ninh ranked third in attracting foreign direct investment at $2.1 billion last year with a GRDP of 10.28%.
With an index point of 65.86, HCMC fell 13 places to the 27th place in the ranking, while Hanoi lost 10 places, falling to the 20th place.
HCMC was found to rank lower than many localities in terms of proactivity and informal charges, but it ranked top nationwide in business support policy.
Its GRDP plunged from 9.03% last year to 0.7% in the first quarter this year.
Dau Anh Tuan, director of the legal department at VCCI, said that big economic centers in Vietnam have to go through more economic challenges and investors expect bigger reforms than smaller ones.
The index shows that some localities do not seem to be proactive in making changes, he added.
“Amid this challenging economy, local governments need to be more active,” said Tuan. “One company facing difficulties can cause major risks.”
Tuan also hailed the improvement of Bac Giang Province which climbed 29 places to second place at 72.8 points.
Surveys show that businesses highly appreciate the supporting policies of provinces, and in recent years local authorities have been meeting with business representatives more often to untangle their issues.
Hai Phong City secured third place with 70.76 points, down from the second place last year.
Ba Ria – Vung Tau and Dong Thap Provinces rounded up the top five.
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