Published on April 11, 2023, the report evaluates Vietnam’s business environment.
Edmund Malesky, director of the Duke Center for International Development and professor of political science, serves as the primary author and lead researcher for Vietnam’s Provincial Competitiveness Index (PCI) 2022 report, released on April 11 by the Vietnam Chamber of Commerce and Industry (VCCI).
The PCI, an ongoing, collaborative effort between the VCCI and the U.S. Agency for International Development (USAID), assesses the ease of doing business, quality of economic governance, and the effectiveness of administrative reform efforts in Vietnam’s 63 provinces and municipalities from the perspective of private-sector businesses.
“The 2022 PCI report, based on the responses of over 12,000 firms, reveals the tremendous efforts of both businesses and provincial governments to navigate through the rough waters of the COVID-19 pandemic,” writes VCCI chairman and president Pham Tan Cong in the report’s foreword. “Both domestic and foreign firms reported improvements in administrative procedures, reductions in the time costs of bureaucratic compliance, and liberation from the burdens of informal charges. However, the effects of the challenging economic context are also clear in this year’s report, as reforms in many policy areas slowed and business optimism remained low. Many firms report multiple difficulties in access to finance and hiring employees, limited infrastructure growth, and a gap between central policy and implementation at the grassroots level.”
The report also introduces the Provincial Green Index (PGI), an initiative developed by VCCI with support from USAID and private sector partners, including the Duke Center for International Development. The PGI measures and ranks provincial environmental policies from the viewpoint of businesses with the goal of promoting better business behavior and practices.
“For nearly two decades, VCCI’s successful Provincial Competitiveness Index has prompted feedback and effective action around critical business climate issues,” said Aler Grubbs, USAID/Vietnam Mission Director. “The new Provincial Green Index builds on this prior success, and it signals a greater recognition among the private sector that environmental considerations are equally important for business success and long term economic growth.”
The PCI first began in 2005 as an effort to benchmark the quality of economic governance across Vietnam’s 63 provinces. The annual report and dataset have become critical contributors to Vietnamese national and local policy-making. Over time, the PCI has chronicled tremendous reductions in the burden of regulations and petty bribery. However, more work remains to increase the transparency of government decision-making.
“Whereas the UNDP Vietnam Provincial Governance and Public Administration Performance Index (PAPI) project studies provincial economic governance from the perspective of citizens, the USAID-VCCI PCI project presents the perceptions of business leaders, particular owners and manager of Small and Medium Enterprises (SMEs),” said Malesky, who also serves on the PAPI research team. “The two efforts complement in each other in important ways, illustrating key areas of agreement on transparency and corruption reforms, but also areas where businesses and citizens disagree, such as land access and security of tenure.”