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 The
overall legal framework governing the private sector is
transparent and business-friendly, but local authorities often
do not implement laws and regulations appropriately, and are not
always supportive of businesses. From the date of business
registration, it took over eight months of waiting and dealing
with many local government offices before we could commence
operations. In our case, officials from the Hai Phong Department
of Transportation and Public Works intentionally created
difficulties for us because they were being paid off by our
competitor. In that eight-month waiting period, our company
could not begin operations, but still had to pay wages, wear and
tear on the cars, interest on bank loans and so on. After nearly
two years since the business was set up, we have incurred losses
of over 1.7 billion dong. Provinces with corrupt officials,
combined with an opaque regulatory framework, will harm
potential good businesses. Though there is a very clear legal
system that punishes businesses for wrongdoing, there is no such
system for public servants. As a result, local government
officials can do as they please in dealing with businesses
without fear of being punished or sacked.
In addition, SOEs are still treated more favorably. For example,
on national highways 1B and 5, only buses run by SOEs are
allowed to use the available stops, those run by private
companies are prohibited. In bus terminals, state-owned bus
companies are given priority to lease offices in the best
locations, while private companies like us have to split our
operations into several smaller offices, which is very
inconvenient.
Mr. Tran Thien Can, Director, Hoa Phuong Transport Co. Ltd
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 With
regard to the role of local government in promoting private
sector development, attributes such as friendly attitude,
transparency and a commitment to support the private sector are
important. Provincial leaders need to understand that potential
investors should not have to wait several hours to meet a
department head or have their pre-arranged meetings cancelled
without notice. Government employees at all levels, from the
security guard to provincial department heads, should be
friendly and open in order to leave a good impression on
potential investors. In a recent survey in Binh Duong province,
many business owners told VCCI researchers that the friendly
attitude of provincial officials is largely responsible for the
province's economic success.
Transparency is important, because when an investor writes an
investment plan, he or she needs to be able to accurately
forecast anticipated costs and profits. A common concern among
investors is that they cannot forecast accurately, due to there
being too many unofficial paperwork requirements and costs. Many
investors cannot rely on the official input costs published by
State agencies such as land-lease rates or site clearance costs;
they have to seek more accurate information from consulting
firms or other investors.
Strong commitment to promote the private sector by local
authorities is also important to raise business morale. One
company recently reported being "touched" by a statement made by
the Chairman of the local People's Committee that any company
that creates just three jobs will have full support from
provincial leaders. These commitments need to be translated into
action. Besides annual workshops to commend profitable and
developing businesses, provincial officials also need to hold
direct discussions with businesses that face difficulties with
issues such as land and taxes to help them solve their problems.
Mr. Dau Anh Tuan, Specialist, Legal Department,
Vietnam Chamber of Commerce and Industry
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