No action, no gains

The removal of 675 business and investment conditions by the Ministry of Industry and Trade (MoIT) is considered as a demonstration of the strong determination of the industry and trade sector to create the maximum favourable conditions for enterprises, contributing to building a government of action that nurtures development and serves the people.

Administrative reform in the industry and trade sector has brought about positive results
Administrative reform in the industry and trade sector has brought about positive results

Previously, the ministry had also put forth many solutions to reform administrative procedures and it will continue to boost administrative and institutional reform, and the reduction of business conditions in the near future.

Achievements after moves

Pham Thi Hai, a representative from Ton Dong A Corporation based in Binh Duong province, said that the firm took four to 16 hours to apply for a Certificate of Origin (C/O). However, thanks to the pilot programme launched two years ago that allows enterprises to apply for a C/O via the internet, the application time has been shortened to just one to two hours.

The reforms introduced by the MoIT have helped enterprises to save time and costs, thereby increasing the competitiveness of goods and services, amid integration and fierce competition.

In particular, at the conference held by the MoIT in early January this year, Prime Minister Nguyen Xuan Phuc asked the industry and trade sector to further foster administrative reform and facilitate enterprises. Thus, administrative procedure reform has become one of the most important tasks of the MoIT during this tenure.

However, it is not an easy task as the MoIT's management involves multiple sectors, with as many as 443 administrative procedures, including many cumbersome procedures that are proving problems for businesses.

For instance, textile and garment products were subject to formaldehyde and aromatic amine tests from 2009 to 2015, but no case of high level of formaldehyde was ever detected. Meanwhile, enterprises had to pay hundreds of billions of Vietnamese dong and wasted a lot of time on goods inspection.

Amid these inadequacies, in 2016, the MoIT simplified and abolished 39 administrative procedures out of the 443 administrative procedures in the areas of e-commerce, chemicals, alcohol production and trading, franchising, goods trading through commodity exchange, energy, food safety and electricity.

In 2016, Minister of Industry and Trade Tran Tuan Anh signed a decision to abolish Circular 37/2015/TT-BCT, dated from 2009, on the limits and testing of formaldehyde content in textile products in order to remove difficulties for textile enterprises.

"The abolition has brought about great benefits as it helps enterprises to save roughly VND1.5 million (US$66) per test and shortens the clearance time to 2.4 - 3.8 days", said Truong Van Cam, deputy chairman of the Vietnam Textile and Apparel Association (Vinatas).

In 2017, the MoIT set the target of removing 15 administrative procedures and simplifying 108 procedures in 17 areas defined in 40 legal documents. Furthermore, the ministry will continue to build and upgrade 22 online public services.

Historic decision

Besides administrative reform, the MoIT is also committed to cutting down business conditions that hinder enterprises. At the regular Government cabinet meeting on August 3, 2017, the MoIT was blamed for imposing the highest number of business conditions on enterprises. The ministry managed 27 business categories with business conditions totalling up to 1,220.

Following the meeting, the MoIT set up a special working group to review all of the business conditions in order to simplify or reduce the conditions. As a result, Minister Tran Tuan Anh signed the Decision No. 3610a/QĐ-BCT on September 20, 2017 to simplify and cut 675 business and investment conditions.

The move marked the highest number of conditions to be slashed in the history of the industry and trade sector, which accounted for 55.5% of the total number of business and investment conditions.

Minister Tran Tuan Anh said that this was not an "overnight" decision but it was considered carefully by the ministry to improve the efficiency of State management, while ensuring favourable conditions for enterprises.

Prime Minister Nguyen Xuan Phuc acknowledged that this was the most positive and strongest move made among the ministries in a bid to reform business conditions. This decision has caused the MoIT to become the leading ministry in abolishing a huge volume of business conditions.

Minister Tran Tuan Anh noted that the reduction of 675 or even 1,000 business conditions will only pay off if it brings about substantial results and actually facilitates enterprises.

He added that the simplification and removal of business and investment conditions will be the key task of the industry and trade sector in the near future, aligned with the building and promulgation of legal documents.

Deputy General Director of Garment 10 JSC, Than Duc Viet said the abolition of 675 business conditions have stimulated enterprises and the move will certainly create more convenience for enterprises in conducting business, allowing them to gain more benefits in the time ahead.

Economist, PhD. Vo Tri Thanh also praised the pioneering move of the MoIT, while noting that: "The move is a positive signal, but it is only the first step. More work is waiting ahead which requires further determination and efforts from the MoIT. In particular, it is necessary to create a broad consensus among the MoIT staff to promote the aforementioned efforts”.

It will take more time to measure the practical effectiveness of the strong move by the MoIT. However, this considerable change will create pervasive influence on other ministries, sectors, and localities, contributing to building a government of action that nurtures development and serves the people.