Business is no longer alone
It is possible that the draft decree developed by the Ministry of Industry and Trade (MOIT), which will replace the Government’s Decree No. 109/2010/NĐ-CP dated November 1, 2010 on rice export, will assure Pham Hoang Lam, General Director of Hung Lam JSC (An Giang province), as the draft document includes the suggestions that Lam had previously put to the Government Office on reforming rice export management in Vietnam, including abolishing procedures for registration of rice export contracts, focused bidding for export contract and standardisation requirements for rice export enterprises’ factories.
This move by the MOIT continues to show the determination of the ministry, following its pioneering role in making public a list of 675 business conditions that will be abolished. Since the beginning of 2017, the ministry has submitted to the Government eight decrees related to the abolition of business conditions in several business lines, such as chemical trading and the liquefied gas business. In particular, the draft decree amending various other business conditions was completed and submitted by the MOIT to the Ministry of Justice in November 2017 for completion before submitting it to the Government.
Nguyen Dinh Cung, Director of the Central Institute for Economic Management, said that the MOIT’s move has changed the" war on sub-licences" in a very positive way, that means enterprise and experts are receiving more support than before.
At this point, a range of ministries have taken positive measures in cutting business conditions. For example, the Ministry of Agriculture and Rural Development (MARD) has proactively reviewed and proposed to abolish and amend 118 business conditions, accounting for 34.2% of the total, of which 65 will be abolished and 53 others will be streamlined.
The Ministry of Health has also announced the proposal to reduce 36 production and business conditions (as stipulated in Decree No. 67/2016 /NĐ-CP) for food production and trading establishments under the ministry’s management. These procedures account for nearly 14% of the total number of conditions for food production and trading establishments managed by the ministry. Specifically, for units producing and trading in functional food and micronutrient enhancing foods, conditions have been reduced from 54 to 46; establishments producing and trading in food additives and food processing aids, reduced from 57 to 48; and production of natural mineral water, bottled water and instant ice from 152 conditions to 133.
It must be stressed that regulations on business conditions have traditionally been implemented under the mechanism of increasing market entry costs and reducing the potential of enterprises operating in each sector. Thus, once the business condition has been lifted, it means that the market access opportunities for enterprises will be expanded, and the market will be pushed towards more competitiveness as well as more equitability.
"There will be many new entrants to the market and also new business ideas and new professions coming out," said Pham Thi Ngoc Thuy, Deputy Secretary General of the Vietnam Private Sector Forum.
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Strong reform in the State management by a range of ministries has created a significant change in the “war” against sub-licences. (Credit: NDO)
Increased pressure for innovation needed
Resolution No. 19-2017/NQ-CP, promulgated by the Government targets improving the business environment and improving the national competitiveness in 201 towards 2020, has entered the fourth year, with a number of detailed activities, many of which deal with the abolition of business conditions. In line with Resolution No. 19, during 2016-2017, the Government issued up to 16 resolutions and directives on improving the business environment and cutting costs for businesses.
However, it is worth mentioning that the implementation of such documents remains sluggish, while some have not been properly implemented. Giving a detailed explanation on this issue, Cung said that the power of permitting or not allowing businesses to enter the market is a big reason for the "fight” against sub-licences and business conditions, which have been lawless for many years. It is a struggle between civil servants and enterprises, in which the protest from the civil servants is very large.
From the perspective of the State management agencies, the pre-check mechanism often brings great powers and benefits to the sections and civil servants directly involved. Even the MOIT, before becoming a star in reform, was also an address of “complaints” by businesses. Furthermore, many of the business conditions that the ministry has committed to abolish in the coming year have also been issues of concern for a long time, such as the conditions on rice exports and gas trading.
This was also identified as the reason for the reincarnation of a lot of the business conditions and sub-licences in the early stage of the fight. Typically, the Ministry of Transport, after eliminating almost all of its business conditions in 2000, has quickly restored them all, and even more conditions have been implemented.
Moreover, when the pre-check thinking still exists, it is impossible to achieve the goal of restricting business conditions, because it is the management tool of this mechanism. "The problem here is that the new way of thinking about governance, which means replacing pre-check by post-check, is to replace management tools and management methods. This needs top-down pressure, from the top leaders, especially from the Prime Minister," Cung said.
This pressure, according to Cung, needs to be put on administrative discipline, forcing the relevant ministries and sectors to comply. "I suggest clarifying the deadline for the abolition of 1/3 to 1/2 of the existing regulations on business conditions in the second quarter of 2018 with the ministries which have carried out reviews on the business conditions abolition. For those who have not carried out a review, they should complete the work by March 2018 in order to finalise a decree on the abolition of business conditions that is no longer needed in the second quarter of 2018," Cung proposed.
Especially, the expert also proposed to publicise the list of ministries and sectors with slow implementation progress to get more pressure from the market and the public on this work. "At the moment, the business environment needs a timely and synchronous change," Cung stressed.
