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The Asia Foundation Launches the 2006 Vietnam Provincial Competitiveness Index

Washington, DC and Hanoi, May 31, 2006 — First-ever, comprehensive tool to facilitate and drive governance reforms to improve the business environment

In an effort to break business barriers in Vietnam, today, The Asia Foundation announced the largest and most comprehensive survey of Vietnam’s business perceptions of the performance of provincial governments. The Provincial Competitiveness Index (PCI) provides the first-ever full ranking and assessment of provinces based on their regulatory environments to improve private sector growth.

The 2006 PCI — developed and implemented by The Asia Foundation and the Vietnam Chamber of Commerce and Industry as a part of the larger USAID-funded Vietnam Competitiveness Initiative project managed by Development Alternatives, Inc. — polled over 6,300 Vietnamese private sector firms in all 64 provinces, enabling them to voice their concerns and experiences with their respective provincial governments.

The PCI rates provinces on a 100-point scale in an effort to explain why some parts of Vietnam perform better than others in terms of private sector dynamism and growth. The index combines the perceptions of businesses on key aspects of local business environments directly influenced by the actions and attitudes of provincial officials with credible and comparable data from official sources.

In 2005, the first PCI was released based on the perceptions of 2,020 businesses across 42 provinces. It quickly became an important tool to identify and drive areas in need of regulatory, policy, and governance reform. Cited as one of the “Top 10 Economic Events” of 2005 by Vietnamese national TV news (VTV1), the PCI was also a central part of donor efforts to promote private sector development at the provincial level.

With the inclusion now of all 64 provinces and a tripling of the amount of responses, the 2006 PCI takes a more comprehensive and decisive look at areas such as business establishment costs, transparency and access to information, inspections, confidence in legal institutions, and labor training. 2006 has also seen a strong response from smaller, more remote provinces not included in last year’s PCI. This year, strong performers include Binh Duong, Da Nang, Vinh Long, Vinh Phuc, and Dong Nai. The outstanding newcomer is Lao Cai, which performed consistently well across all sub-indices.

“The Asia Foundation is proud to have aided in producing the 2006 Provincial Competitiveness Index,” says Doug Bereuter, President of The Asia Foundation. “It is a landmark assessment that provides a sound resource not only for the Vietnamese Government, but for the private sector interested in Vietnam’s business environment.”

Download and view the full report in PDF format, here (3.47 MB).

Launched in Hanoi today, U.S. events will take place in Washington, DC on June 13, 2006, and San Francisco on June 15.

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