A reduction of 2,000 conditions is an appropriate approach

Mr. Dau Anh Tuan

Recently, the Ministry of Planning and Investment has proposed to reduce 2,000 sub-licenses. Could you tell us about consequences caused by barriers for enterprises?

Many enterprises and economists have reflected the troubles from the business condition system. Therefore, in order to create a favorable business environment, simplification and reduction of inappropriate business conditions are very necessary. However, it is difficult to make statistics on a number of Vietnam’s business conditions. The VCCI with a criteria system listed more than 5,700 business conditions and the Central Institute for Economic Management preliminarily listed more than 4,200 conditions. I think that it is necessary to count existing business conditions causing troubles, and business conditions, which are not consistent with the standards of progress in business regulation, reducing the creative ability, development motivation of enterprises.

Could you give some examples of business conditions that cause troubles enterprises?

A review of some of VCCI's business lines shows that many business conditions interfere in the autonomy of enterprises. For example, the issue of the business conditions for auto transportation business, enterprises must submit an appropriate business plan to state agencies for certification. But, how can state agencies certify whether business conditions are appropriate or not and whether the business has declared a true business plan with a government agency or not? For the gas business, enterprises must set up a distribution system, have general distribution agent This is completely the autonomy of enterprises, enterprises will choose the best appropriate distribution model.

For sea transportation business, enterprises are required to have a legal department. But, the enterprises said that they hire the international leading law firm instead of establishing a legal department in the enterprises.

Gas business conditions are considered as inappropriate.

In addition to causing troubles, some conditions that do not comply with the actual situation, still are applied. Why does this situation take place, sir?

State agencies considered the requirement for business license and control regulations as their state management needs. This can be understood from the view of the state management agencies and from the previous management habits. But a question that should be mentioned here is that “ why is such management ineffective?".

For example, for the declaration of conformity to food safety regulations in Decree 38/2012 / ND-CP, many enterprises and experts recommended that this is an ineffective solution because this is the control in the paper, at the office to certify, which does absolutely not affect the quality of food safety. The sample is brought by the enterprises, the management agency also does not control the quality of samples. When the enterprises present the samples for testing, they removed the unsatisfactory samples. The experience of countries in food control is on-the-spot controls, probability controls, and imposing severe penalties for violations of regulations. It is required to focus on high-risk groups when using such solutions, but Decree 38 is controlling the groups, which are considered to be at low risk. 99% of poisoning cases occur in the street, collective kitchens, but state agencies on food safety have not focused on those areas but only focused on packed food, which is considered as food of lower risk of food insecurity than other foods as reported by the Government. As a result, the management agencies are focusing on licensing low-risk food, while not focusing on high-risk groups. Change on management, dialogue with businesses, consultation with experts to apply the experience of countries must be implemented to have solutions to reform the areas to be licensed.

With an objective of reducing 2,000 business conditions, what is the solution to implement the objective, sir?

The proposal of reducing 2,000 business conditions is a very audacious proposal of the Ministry of Planning and Investment. Despite ambitious proposal, this is an appropriate approach. Its priority is the successful lessons of countries such as the reform of Korea's business regulations 10 years ago when they set a hard objective of cutting 50% of business conditions and they had implemented drastically.

In Vietnam, the objective of cutting 2,000 business conditions - a shocking number but a good opportunity to review business conditions. During the discussion on the reason for the reduction of business conditions, the ministries, experts, and enterprises will see what to hold and what to remove. We are expecting the discussion process of the proposal. Now, at the recent Government’s meeting, we are glad that the head of Government has concluded the study to prepare to issue a decree on regulations on business conditions and procedures on business condition and re-start the implementation team of Investment Law led by the Minister of Planning and Investment. This group has attempted to cut business licenses and business conditions over the past years.

I think that these will be specific solutions and I hope that the review to cut business conditions is not as frantic period as last year and then it faded gradually but must be a regular activity in the context where Vietnam is trying to promote high growth and compete with other countries in investment attraction and enterprise development.