Remarks by U.S. Ambassador at Launching of the Provincial Competitiveness Index (PCI) 2011

February 23, 2012
The Melia Hotel, Hanoi

Mr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI);
Government and business leaders;
Development partners, and friends;

It is a pleasure to join you today in launching the annual Provincial Competitiveness Index report for 2011. This event marks the seventh year of fruitful collaboration between the Vietnam Chamber of Commerce and Industry and the U.S. Agency for International Development in helping to improve economic governance and competitiveness across the country.

As a barometer of private sector perceptions about the business environment in Vietnam, the PCI is a useful tool by which provincial leaders can identify areas where reforms or improvements are needed. Since 2005, over 50 provinces have used the PCI to assess their strengths and weaknesses in economic governance.
Many provincial leaders have subsequently engaged in a public-private dialogue to build consensus about improvements needed, and have taken specific actions to improve the business environment in their provinces.

The 2011 PCI highlights the importance of economic governance in attracting investment, creating jobs, and supporting economic growth. It shows a continued trend of improvement in economic governance across many provinces, in areas such as, lower entry costs for starting a business, improved access to provincial planning, significant reductions in demands for informal charges, and greater satisfaction with labor quality.

Areas where responses were not positive include: land compensation prices; the proactivity and attitude of local leaders toward private business; and the use and satisfaction with business support services provided by provincial authorities.

For the first time, the PCI sees several provinces rising or falling significantly in the rankings. Some low-ranked provinces have improved their standing substantially. This demonstrates that provinces can improve their PCI scores if they are aware of their weaknesses and seriously implement an action plan to address them. Also, we note that some of the highest ranked provinces slipped in their PCI ranking this year, possibly indicating rising expectations from businesses as to what constitutes a sound business environment.

This year’s report also provides a snapshot of the views of Foreign Invested Enterprises in Vietnam; this is the second year that the PCI report includes feedback from this group which provides ideas for consideration by local and national governments in their efforts to attract higher value-added investment.

In short, the PCI continues to make an important contribution to improving economic governance and making it easier and more attractive to do business in Vietnam. I thank the many private sector firms that responded to the 2011 PCI survey. Without your response to the survey, the 2011 PCI would not be possible. Finally, I am confident that this year’s report will foster new commitments by provincial and national authorities to improve economic governance for the benefit of all the people of Vietnam.

Xin Cam on/Thank you all