Among the ten PCI components, Hanoi has continued to score high in areas considered its strengths. Most notably, the “Labour and training” sub-index scored 7.43 points, ranking first out of 63 provinces and cities, up two places compared to 2022.
Many sub-indices see declines
Based on a survey of over 700 businesses, when asked about recruitment, companies indicated that Hanoi is a locality with many advantages for hiring technical staff and management supervisors. Businesses have also highly rated the quality of vocational education and general education in Hanoi.
“In general, the quality of education, vocational training, and workforce is a strength of the capital city. This is a particularly important factor in attracting FDI and high-quality investors,” commented Dau Anh Tuan, Director General of Legal Department and Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI).
In the PCI ranking, Hanoi consistently scored well in the “Business support services” sub-index, reaching 7.38 points in 2023 and ranking 6th nationwide (up three places from the previous year). When businesses were asked about administrative procedures supporting them, such as access to credit, legal advice, market information, business start-up training and business management, they acknowledged positive improvements in Hanoi.
The city’s “Transparency and access to information” sub-index and the application of information technology were also rated relatively well, with 52% of surveyed businesses reporting regular access to the website of the Hanoi People’s Committee, placing Hanoi 14th out of 63 provinces and cities.
Despite these traditional strengths, several sub-indices of Hanoi dropped in score and ranking. For instance, in the “Entry costs” sub-index, Hanoi ranks 54th out of 63 provinces and cities. An objective reason for this is the overwhelming workload.
Do Van Tinh, Head of the Business Registration Office (Hanoi Department of Planning and Investment), said that each officer at the Business Registration Office receives and handles about 37 files each working day, with the total number of files processed daily amounting to around 1,050 — five times higher than the number handled by other provinces and cities.
Businesses also pointed out challenges in fields like land use, construction, fire prevention, market management, and social insurance. According to the VCCI survey, businesses commented that the land administration procedures at the city, district, and commune levels have not been significantly reformed.
A representative of HTC Global JSC stated that during the development of the Van Tu Industrial Cluster (Phu Xuyen District, Hanoi), the company faced numerous difficulties in land clearance and land related procedures. However, the authorities and relevant agencies took a long time to resolve these issues, causing the company’s capital to stagnate, thus negatively impacting investment efficiency.
Additionally, the communication and behaviour of some city officials, civil servants, and public employees are still lacking in professionalism, causing frustration among citizens. Vice Chairman of the Hanoi People’s Committee, Ha Minh Hai, admitted that these limitations have reduced the city’s competitiveness compared to other provinces and cities.
Striving to return to the top 20
In the face of the falling PCI index in 2023, the Hanoi People’s Committee has issued a plan to improve the PCI, striving to be in the group of the 20 leading provinces and cities nationwide.
Specifically, Hanoi requires its units to maintain the ranking of the “Labour and training” sub-index, increase the “Business support services” sub-index by three places or more, increase the “Transparency and access to information” sub-index by at least five places, and increase the remaining seven sub-indices by 10 places or more.
Deputy Minister of Home Affairs Truong Hai Long said that the city needs to focus on innovation in thinking, technology innovation, and innovation in working methods, boldly piloting new models and methods to create breakthrough results.
In particular, it should focus on removing bottlenecks in institutions, mechanisms, and policies, especially those directly related to production, business, and enterprise development activities.
To return to the top 20 in terms of PCI index as well as improve the investment and business environment, Hanoi has strengthened the rectification of the attitude and working style of its officials.
Thanks to the issuance of a series of directives and documents on strengthening of discipline and responsibility for handling work, the number of overdue tasks has been reduced by 12%.
In addition, Hanoi also promotes information technology and digital transformation such as the use of online public service system, digital signatures, and electronic offices to handle work more quickly.
Recently, the city has put into use the Digital Capital Citizen application (iHaNoi) — a real-time interaction channel between people, businesses and authorities — to promptly listen to and handle all recommendations and feedback from people and businesses.
In 2024, Hanoi has also organised many meetings with enterprises in various sectors in a bid to remove difficulties for business activities.
The city also requested relevant localities and agencies to shorten the time required to carry out administrative procedures related to investment and construction of industrial clusters by 50%.
Thanks to these efforts, the capital’s economy has maintained a fairly good growth rate and Hanoi is still an attractive destination for investors. In particular, the city attracted 1.4 billion USD in FDI capital in the first eight months of 2024, an increase of 71% over the same period in 2023. About 20,400 newly established enterprises were recorded with total registered capital of 198.7 trillion VND.
Vice Chairman of the Hanoi People’s Committee Ha Minh Hai said that, based on the results of the PCI index, each sub-index must be thoroughly assessed to propose specific solutions to improve scores and to build a city in support of the people and businesses.
