Quang Ninh reaches beyond remarkable PCI 2019 results

Quang Ninh reaches beyond remarkable PCI 2019 results

With three consecutive years on top of the ranks of the Provincial Competitiveness Index (PCI), the northeastern province of Quang Ninh has demonstrated its strong commitments to creating a favourable business and investment environment. However, it seems that the rapid economic growth rate is forcing provincial authorities to innovate ceaselessly, both in depth and acceleration.

Representatives from Quang Ninh People’s Committee received a certificate for the PCI 2019 results

Despite leading the way in the 2019 PCI rankings, Quang Ninh did not achieve the highest score in any individual category. This goes to show that the province has a lot of potential to upgrade each score, while the pressure to improve to maintain its top ranking weighs more heavily with each passing year.

For the last three years in a row, Quang Ninh has kept its top position and spent seven years among the top five cities and provinces to be recognised with the best economic management. However, there is a fierce race in the higher echelons of the PCI, with increasing requirements of non-stop and sustainable innovation and creativity from each candidate.

The 2019 CPI results clearly showcased an improvement of the economic management in quality over previous years. Provinces at the bottom of the table had considerable advancement in terms of improving management quality.

In 2006, the first year of ranking, the lowest PCI score for a province was 36. By 2019, the lowest was closer to 60. Meanwhile, the gap between the top and the bottom is narrowing, from 41.5 points in 2006 to 13.4 points in 2019.

Provinces at the bottom of the ranking have also improved their rankings by taking lessons from leading and developed ones such as Quang Ninh, Dong Thap, and Haiphong.

In 2019, the growth rate of Quang Ninh’s regional GDP reached 12.1 per cent, exceeding the set target and the highest in the past 10 years, with per capita gross output twice the national average. Quang Ninh’s budget revenue in 2019 reached VND46.6 trillion ($2.03 billion), of which domestic revenue reached VND34 trillion ($1.48 billion).

Also in 2019, the total social investment capital in the province was estimated at VND76.4 trillion ($3.3 billion), up 11.3 per cent over the same period, accounting for 41.2 per cent of regional GDP. This included VND48 trillion ($2.09 billion) from the non-state sector, accounting for 62.8 per cent, up 14.9 per cent; foreign direct investment (FDI) amounted to VND5.4 trillion ($235 million), accounting for 7.2 per cent, up 11.5 per cent over the same period. The remaining 30 per cent belongs to state capital, with a value of VND22.9 trillion ($996 million).

With such amazing figures, Quang Ninh has surpassed itself in 2019, scoring a record score of 73.40 points, an increase of 3.04 points compared to the previous year.

“However, when studying and analysing component indexes, we realise that businesses are still expecting more from the authority. That is a pressure but also a motivation for Quang Ninh to evolve in the following years,” said Nguyen Van Thang, chairman of the Provincial People’s Committee.

Facing facts

Despite the impressive achievements, at the PCI 2019 analysis conference held in May there was less focus on the remarkable results. Instead, local authorities and leading experts discussed and shared their opinions and practical solutions on how to overcome obstacles to help Quang Ninh gain even higher scores.

At the event, a comparison was made with the expectations set out in Document No.3254/UBND-TM5 of the Provincial People’s Committee issued in May 2019. Accordingly, seven indicators reached the target and three indicators did not.

Of the 128 sub-indices, only 30 out of 128 achieved the target (accounting for 23.44 per cent) and 98 sub-indicators did not meet the target (accounting for 76.56 per cent). Therefore, Quang Ninh still has a lot of missions to fulfil to be truly satisfied, and to ensure it supports business.

The process of improving the quality of economic management and upgrading the level of provincial competitiveness of Quang Ninh last year saw notable highlights, especially in IT. Quang Ninh has applied effectively IT in solving administrative procedures. The number of such procedures at provincial level 3 and 4 reached 84.6 per cent, 71 per cent of which were at level 3 while 13.6 per cent were at level 4.

Payments of fees at public administration centres are more convenient where businesses and citizens can make payment online through internet banking, card payment through a point of sale machine, or also via QR code or cash. This is also the first year Quang Ninh operated its smart city management centre, which standardises the database among different departments, applies the paperless meeting model, and digitalises management data as well as sends and receives inter-branched documents between sectors.

In addition, the province has continuously investigated and published the annual provincial and district competitiveness index with the aim to create a dynamic force to innovate in the implementation quality of local authorities at all levels, marking a significant contribution in improving the overall PCI score of Quang Ninh last year.

Innovation is a must

According to Dau Anh Tuan, head of the Legal Department at the Vietnam Chamber of Commerce and Industry and also director of the PCI project, there are some poor components of the index that are needed to be improved drastically. In 2019, the number of waiting days for land use right certificate increased by 10 days compared to 2018; the number of enterprises facing difficulties increased by 15 per cent; and the provision of information on land is not favourable, quickly increasing by 13 per cent.

Therefore, Quang Ninh needs to strongly improve its access to land and business premises. These are the key factors in attracting investors but also the most challenging index to improve.

“Sometimes, the authority and the businesses will not be on the same side since the business has violated laws for real estate usage,” Tuan said. “What we are trying to improve is the control of these violations to reserve the real estate resources for good investors. Besides, we also try to continuously update and publish our plans so that the businesses are made aware.”

The procedure to register a business also needs to be sped up, as Quang Ninh’s score in this regard is only sixth out of 63 provinces and has the tendency to slow down. Tuan also stressed that the proportion of businesses needing to wait for more than a month to complete their business registration procedure has increased from 13 per cent in 2018 to 20 per cent in 2019.

Businesses are still requiring Quang Ninh to keep reducing processing times for procedures even though Quang Ninh is still in the top ten in this regard. Half of the major companies had to spend more than 10 per cent of their time studying and following the local laws and legislation.

In 2019, the average duration of a tax audit meeting increased from eight hours in 2018 to 22 hours. The number of days businesses need to wait to receive information and documents requested from the local authority also increased from four to five days. The burden of unofficial fees still has not seen any significant improvement during procedures related to real estate.

However, the successful and impressive results of the province in attracting high-quality investors cannot be denied, with prestigious and leading local brand names such as Vingroup, Sun Group, Tuan Chau, and Muong Thanh having a presence.

There is still much to do for Quang Ninh to improve, innovating to meet the demands and requirements of both local and international business communities expected to land in the northeastern coastal province of Vietnam in the near future.

Hoang Trung Kien - Vice chairman, Quang Ninh Economic Zone Management Board We recognise that investors are expecting improvement in official procedures as well as better preparation of facilities in the economic and industrial zones. The official procedures should be improved so that the investors will have the shortest waiting time possible before commencement of their projects. However, according to laws and legislation, this procedure involves many steps: investment confirmation, formation of business, planning, construction drawing, technical design, fire prevention, environmental impact assessment, and more which takes a lot of time. Therefore, the board is instructing the investors to prepare these steps in parallel so that the overall preparation period can be shortened. Dau Anh Tuan - Director, PCI project The encouragement from the local authority has been tremendous. It is very important to keep that encouragement, as the authority is the party that is most familiar with the reality of the situation. They understand the demands of the businesses and the people, therefore they will be able to design the most appropriate policies and models and this has been proven by facts - for example the public service centre model, provincial people’s committee being in charge of various institutions, and more besides. All of them are Quang Ninh’s innovations and have brought positive results, proving the province to be an innovative star for the country.

VIR