San Francisco and Hanoi, January 19, 2006 — The Asia Foundation and the Vietnam Chamber of Commerce and Industry (VCCI) recently released the Provincial Competitiveness Index (PCI) 2005 report. The PCI assesses and ranks Vietnam’s provinces by their regulatory environment for business, and the work has garnered significant attention from the Vietnamese media, the private sector, and national and provincial governments. The PCI was developed as part of the USAID-funded Vietnam Competitiveness Initiative (VNCI), managed by DAI, which aims to promote a regulatory environment that encourages entrepreneurship.
The survey showed that the presence or lack of raw materials and geographic advantages are not enough by themselves to account for why the private sector flourishes in some provinces but not in others. The attitudes of local officials and the policies they adopt are also key determinants of a province’s success or failure. Private sector investment is stronger in provinces that keep business registration and paperwork requirements to a minimum, facilitate access to land, and have transparent rules and procedures.
Details of the report were originally announced in Hanoi in May of 2005, leading to an immediate response by provincial officials seeking to improve or maintain their ranking. Ha Tay province, which finished with the very poorest score of the 42 provinces covered by the research, has already undertaken a variety of measures to improve the local business environment. Other provinces, including An Giang, Tien Giang, and Bac Ninh, also immediately implemented measures to improve the local business environment and attract new investment to their regions.
More than 16,200 firms were surveyed as a part of this first survey, and the 42 provinces covered in the report represent more than 90 percent of the Vietnamese economy. In 2006, the survey will be expanded to include many of the provinces that were not covered in the initial report.