Improving business environment, the key to economic growth

Acknowledging the nation’s efforts in improving the local business environment in recent times, Amy Luinstra, acting country director of the International Finance Corporation (IFC), said that despite facing complicated developments relating to the COVID-19 pandemic, Vietnam still recorded remarkable achievements. These can be seen through its improvements of the business environment and the overall competitiveness of enterprises.

Thanks to these efforts, foreign investment attraction has sufficiently recovered, coupled with double-digit export growth and a stable macro-economy.

Alain Cany, chairman of the European Chamber of Commerce in Vietnam (EuroCham), emphasised that more than 1,200 EuroCham members all gave optimistic signals for the nation’s "new normal", as shown through the business climate index of EuroCham (BCI) which increased from 42 points to 61 points in January.

With COVID-19 being gradually brought under control, the EU-Vietnam Free Trade Agreement (EVFTA) coming into effect and the EU-Vietnam Investment Protection Agreement (EVIPA) set to be implemented, the country will have the opportunity to attract new waves of foreign direct investment from European nations, Cany noted.

Despite this optimistic outlook, the local business environment continues to face plenty of risks and challenges which are reflected in the level of market decline, affected labour productivity, and the risk of possible disruption occurring in supply chains and increased borrowing.

This not only impacts the operation and competitiveness of the business sector, but also potentially run risks which could affect the speed of economic recovery.

In line with this assessment, many people believe that improving the investment and business environment should be further promoted, considering it to be a key task in order to achieve the goal of high growth and sustainable development.

John Rockhold, chairman of the American Chamber of Commerce in Vietnam (AmCham Vietnam), said the most important factor in creating a favourable business environment, as well as maintaining the supply chain is that the legal environment that must be fair, transparent, and requires innovation.

This will helps to both stimulate and maintain the growth of foreign investment inflows that existed before.

According to Pham Tan Cong, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), as a means of contributing to realising the goals and effectively implementing the tasks and solutions set out by the Government, the VCCI has proposed that the Government facilitate enterprises’ access to information, policies, and regulations. This can serve as a way of helping them to access capital in order to restore production and business activities.

Recognizing the importance of improving the business environment and sharpening the competitiveness, the socio-economic recovery and development programme worth VND350,000 billion, approximately 4% of GDP, was adopted by the National Assembly in January.

This is forecast to be an important premise for the Vietnamese economy to recover and make further breakthroughs moving forward.