18/09/2009 | 10:28:00

Hanoi to push for investment reforms

Hanoi set a target to jump 10 positions in the Provincial Comparative Index, from 31 of 63 provinces and cities in 2008 to number 21 in 2009.

To achieve this target, Nguyen Huy Tuong, Vice Chairman of the Hanoi People’s Committee, said that the city would focus efforts to improve the investment climate while implementing administrative reform in accordance with Government Project 30 – the Master Plan for Simplifying Administrative Procedures.

There were different reasons behind the low ranking of Hanoi ’s PCI in 2008.

According to Frank Donovan, Chief Representative of USAID in the VNCI-USAID (Vietnam Comparative Index-USAID), the city’s expansion in August 2008 was one of the leading causes of the low ranking.

Frank said that following the expansion, Hanoi became one of the 17 largest cities in the world – a great challenge for city authorities.

Meanwhile, the city was a lucrative investment destination for many investors. And of course, the PCI was an effective tool to collect responses from investors about the city’s investment climate, employment opportunities and people’s living conditions.

Le Thu Hien, representative from VNCI-USAID, cited results of a survey on Hanoi ’s PCI over the last four years, saying that the city was ranked in the mid 30s among the nation’s 63 provinces and cities.

The results of the survey identified the six weakest areas that the city needed to improve, such as land access, timing, preferential policies, legal frameworks, unofficial costs and dynamism.

Interpreting the survey’s results, Dau Ngoc Anh, from the Vietnam Chamber of Commerce and Industry (VCCI), had a few other points of view.

“The top five challenges facing investors in Hanoi are capital, land, administrative reform, human resources and infrastructure,” said Anh.

Figures from the 2008 PCI survey in Hanoi revealed that 41.28 percent of the responding enterprises said that 66.18 percent of their bank credits were in terms of less than 12 months. In order to have such credits, 94.44 percent of the enterprises said they had to use collateral, including certificates on land use rights (70.83 percent).

Regarding project land, almost 65 percent of the responders said that they would want to expand their investment scales if they had more land.

For questions relating to administrative reform, only about 40 percent of the enterprises said that they were satisfied with the friendly attitude and performance of staff members working at functional agencies.

More than 22 percent of the responders said that they were appalled by the poor infrastructure, particularly in regards to electricity and tele-communications.

Almost 40 percent of the enterprises said that human resources was a big problem for Hanoi , as there was a severe shortage of skilled workers.

Nguyen Dinh Duong, director of the Hanoi Institute for Socio-Economic Studies, recommended that municipal authorities thoroughly consider the six areas suggested by the VNCI if they really wanted to jump 10 steps in the PCI 2009-10 rankings.

Vice Chairman of the Hanoi People’s Committee Tuong said the city leadership had highly appreciated the PCI conducted by the VNCI-USAID project.

Tuong said in March that the Hanoi People’s Committee held a meelting to discuss measures to improve the city’s PCI survey by 10 steps in the 2009-10 period.

Tuong said that one of the key measures was to improve administrative reform to facilitate conditions for investors to do their business.

“But Hanoi will not attract investment at all costs,” said Tuong.

He said that the city would only grant investment licenses to projects using top technologies and highly-quality services.

Referring to the land problem – a hot issue not only for Hanoi but many other cities – the Vice Chairman promised to publicise the city’s construction planning strategies and order the Department of Natural Resources and Environment to review the city’s land fund and publicise it for the public to view.

Tuong said that the city would do all it could to enable investors to have land to build their workshops and capital to do their business.

But he also called on investors to use the land efficiently and effectively./.

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