Excess preconditions drag economy

A report on 2017 Business Conditions by the Central Institute for Economic Management shows that 234 business sectors require new legal prerequisites (Photo: VNA)

Hanoi (VNA) – A report on 2017 Business
Conditions launched recently by the Central Institute for Economic Management
(CIEM) shows that 234 business sectors require new legal prerequisites. There
currently are around 300 legal documents laying out business sector
prerequisites.

Sectors with the most prerequisites include
industry and trade, transportation, health care, finance and agriculture and
rural development.

“All of this legal red tape has been a major
barrier to the country’s progress toward improving the business and investment
climate in recent years,” Phan Duc Hieu, CIEM’s Deputy Director, said.

Business conditions should be classified into
categories such as preconditions concerning legality, production capacity,
human resources and financial capacity.

Vietnam aims to develop a market-based economy,
but the current amount of regulations and prerequisites intervenes too much and
causes “the economy to suffer,” said Hieu.

Hieu pointed out that unreasonable business
preconditions are creating a number of problems: creating business risks,
limiting creativity and undermining business stimulation, eroding
competitiveness, pushing up costs and badly affecting resource allocation and
small and medium – sized enterprises.

“It is important that State management must not
hinder business operation,” Hieu stressed.

Worried about the “distortion” of business
conditions, Dau Anh Tuan, head of Legal Department under the Vietnam Chamber of
Commerce and Industry, said that business conditions are more complicated and
“distorted” into other forms such as notices or plans. “Business conditions are
sometimes issued to eliminate competitors,” he said.

Tuan said that an independent agency should be
founded to evaluate the impacts of business conditions and simplify conditions
to facilitate business operation.

Director of CIEM, Nguyen Dinh Cung, said that a
renovation in thinking is needed.

To boost business development, Cung said that it
was critical to remove conditions that create risks, push up costs, and prevent
competition and unfairness to businesses.

Drastic measures should be taken not only in
removing unreasonable business prerequisites but also in other unwieldy regulations,
he said. “For too long, we have not seen significant improvement.” – VNA



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