Insubstantial improvement in Vietnam’s business environment

Unreasonable regulations and policies

According to Decree 10/2020/ND-CP, enterprises providing contract passenger transport services must provide the content of the transport contract by email to the Department of Transport before each trip.

This regulation faces opposition from many transport businesses. Because there are businesses that organize hundreds of trips every day, if they were forced to send emails for each trip, the compliance costs would be huge. Management agencies also encounter difficulties when receiving such a large number of emails.

Another regulation also opposed by businesses is the mandatory addition of iodine to table salt for food products that use salt. According to businesses, adding iodine can cause food to change color and flavor, not to mention some foods already contain iodine so supplementation is unnecessary.

In addition, some foreign markets do not accept iodine-supplemented foods, making it difficult for businesses to have two separate production processes for the domestic and export markets.

In 2018, the Government directed the Ministry of Health to amend this regulation, however, it has not been implemented yet.

Slow reform

For many years accompanying the provincial competitiveness index (PCI), Mr. Dau Anh Tuan, PCI Project Director, Deputy General Secretary of the Vietnam Confederation of Commerce and Industry (VCCI), said that recently, the work of reforming administrative procedures and improving the investment and business environment has achieved many positive results.

However, some plans to reduce administrative procedures and business conditions are still formal and lack breakthroughs. Typically, the above regulations and many other regulations have been reflected but have not been reviewed or amended by the competent authorities.

In addition, Mr. Tuan also pointed out that documents currently in the drafting process add many new barriers, making businesses confused and worried.

Agreeing with Mr. Tuan, Ms. Ly Kim Chi, Chairman of the Ho Chi Minh City Food Association, acknowledged that the reform of the business investment environment is slowing down, which can lead to businesses losing confidence and motivation.

An ongoing reality is that recently many businesses in the food industry have transferred and cooperated with foreign businesses and investment funds. This shifting trend may continue, threatening national food security if there is no uniform and consistent legal policy to help reduce the burden on businesses.

Research by the Central Institute for Economic Management (CIEM) also shows that many barriers in professions and business fields still exist.

Dr. Nguyen Minh Thao, Head of CIEM's Business Environment and Competitiveness Research Department, commented that efforts to reform administrative procedures in some localities are not substantive because they do not closely align with the practical needs of businesses.

Source: CIEM, VCCI

Compiled by VietnamCredit