Competitiveness Initiative Simplifies Business in Vietnam

As USAID STAR helped open doors for Vietnam to global trade, another project is helping the country cut red tape across its 63 provinces so its citizens can transact business more smoothly. The USAID Vietnam Competitiveness Initiative (USAID VNCI), also implemented by DAI, supports the government’s Project 30 reforms.

The Prime Minister’s Office of the Government estimates savings to individuals and businesses resulting from Project 30 to be $1.4 billion per year after full implementation of the simplified rules for investment, construction, housing, land, and enterprise establishment.

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To support and enforce reforms, USAID VNCI helped establish the Administrative Procedures Control Agency in the Office of Government, which oversees a system of 87 control units, set up in 24 ministries and 63 provinces and cities with more than 500 professionals coordinating reforms nationwide.

In 2005, USAID VNCI launched the Provincial Competitiveness Index (PCI), which ranks Vietnam’s 63 provinces and cities on transparency, market entry costs, informal charges, land security, proactivity, attitude toward private sector reform, and innovative approaches to economic development, among other factors.

Each year, the PCI rankings draw intense media attention and generate fierce competition among provinces. Selected in 2009 by Vietnam Television as one of the 10 most important economic events of the year, the PCI has been cited in more than 500 newspaper articles and the speeches of two successive Prime Ministers.

USAID VNCI began to survey foreign direct invest- ment in 2010 and 2011 to assess investment deci- sion making, informal charges, the profile of current investors, and issues for improving the investment climate.