Missing out: Tourists taking pictures in front the National Assembly Building in Hanoi. Minister Dung says one of the biggest barriers for foreign investors is the absence of consistent and favourable mechanisms and policies. — Bloomberg
HANOI: It took Dubai just five years to build a 600ha city with 500 buildings worth US$20bil, but in Vietnam with a maze of regulations, it might take 1,500 years.
The remark was made by Planning and Investment Minister Nguyen Chi Dung at the current session of the National Assembly, as deputies discussed amendments to four laws related to investment, including the Law on Planning, the Law on Investment, the Law on Public-Private Partnership, and the Law on Bidding.
Dung said he told this vivid story so that every deputy could see the root of Vietnam’s existing problems, asking them to make changes and hasten reforms for the country’s development in the new era.
“It becomes pressing for Vietnam to look directly into the reality and remove bottlenecks in mechanisms and policies to improve the investment environment.
“One of the biggest barriers for foreign investors when investing in Vietnam is the absence of consistent and favourable mechanisms and policies,” he said.
Dung said that he had witnessed numerous foreign investors excitedly coming to Vietnam to study investment opportunities, then leaving to invest elsewhere.
The difficulty was not only for foreign investors but also for domestic companies, especially in the context that a majority of domestic companies are of small and medium sizes.
“The maze of regulations’ is a huge obstacle for new enterprises to enter the market and for existing enterprises to grow rapidly,” he said.
Such a business environment is undermining Vietnam’s competitiveness through pushing up compliance cost and time, while increasing the risk to businesses.
“Countries around the world are constantly innovating. If we are slow in the race, foreign investors will leave,” Dung said, adding that it is vital to create an environment in which investors could be confident to pour in the money.
According to Nguyen Quoc Hiep, president of Vietnam Association of Construction Contractors, the real estate industry in Vietnam is regulated by 15 different laws.
In addition, these laws lack consistency, which causes difficulty in enforcement.
He also pointed out that several projects must undergo 177 steps and it could take years for a construction site to be cleared.
Pham Thi Ngoc Thuy, director of the Private Economic Development Research Board’s Office, said bottlenecks in administrative procedures were among the top three challenges that businesses face.
The general secretary of the ruling party, To Lam, stressed that law-making must be in the direction of stipulating principles, strengthening decentralisation of power and thoroughly removing bottlenecks in operation and development.
Minister Dung said: “The world is developing rapidly, we cannot delay any longer.
“The draft amendments on the agenda at the National Assembly’s meeting are expected to be a revolution to meet the requirements for the country’s development.
“The mindset of banning what it is difficult to manage, or the ‘ask-give’ mechanism of approval should be abolished.”
The centralisation of power must also be tackled, he said, stressing the orientation of shifting from pre-inspection to post-inspection, stronger decentralisation and more substantial simplification of administrative procedures.
“Legal procedures must be simple and concise to reduce time and cost for investors and not to take away opportunities of investors,” he said.
“The line between state management and development facilitation is very fragile,” he added, stressing that law-making must ensure both efficient management and facilitating conditions for development.
Notably, the Planning and Investment Ministry has proposed streamlined procedures for high-tech projects in the draft amendments to the Law on Investment.
Accordingly, special procedures will be applied for projects at industrial, processing and high-tech zones in the fields of innovation centres, research and development centres, semiconductor, integrated circuit, polyethylene and high-tech products.
“We want stronger reforms towards a ‘one-stop shop’ model to avoid a process that might take several years to complete, causing businesses to miss out on all investment opportunities,” Dung stressed. — Viet Nam News/ANN
