HANOI – Vietnam ranks 99th out of the 185 economies worldwide, or stands at the
top of the bottom half as in previous years, according to the Doing Business
Report 2013, which experts said fails to clarify problems faced by local
enterprises.
The report by the World Bank (WB)
and the International Finance Corporation (IFC) was released in Hanoi on
Tuesday.
Nguyen Van Lan at the IFC office
in Hanoi said: “Does this year’s ranking reflect the difficult situation faced
by businesses? My answer is no.”
The business environment of
Vietnam has similar ranks in the reports of IFC for several years, whereas
local firms have been struggling over the past two years, he said. “The report
captures just a small part of the Vietnam business environment picture.”
Speaking at the launch of the
report in Hanoi on Tuesday, senior economist Pham Chi Lan said Vietnamese
enterprises were now facing the greatest problems since the introduction more
two decades ago of the economic reform policy, reflected in the large number of
bankrupt companies, rising bad debt and mounting inventories.
She cited the data of the
Government, saying that some 40,000 firms had been disbanded in the first nine
months of 2012 and 53,000 businesses had gone bust in 2011.
“It is to say the number of
bankrupt enterprises in these two years account for half of the total number of
some 200,000 since the launch of economic reform,” she stressed.
Meanwhile, the firms that have
survived are in trouble, as they have to cut their production capacity by 20%.
“Such a capacity reduction is
just like 30% of the 450,000 remaining companies having gone bust,” she said.
“Many businesses have told me that they are very anxious about the coming
time.”
The Doing Business Report 2013:
Smarter Regulations for Small and Medium-Size Enterprises finds that Vietnam
has made only one reform this year, which is to allow local companies to print
value added tax invoices on their own.
All ten ranking criteria of WB
and IFC are deemed impractical by Pham Chi Lan.
For example, Vietnam ranks 28th
in terms of dealing with construction permits, with 11 procedures, 110 days and
cost equal to 67% of the average income per capita (US$1,260)
“I’m suspicious of this criterion
as there are in fact many projects have been delayed for years, sending costs
up. We live here, so we grasp the situation better than the report,” she said.
In terms of getting credit,
Vietnam occupies the 40th rank. “This is not the case either, because
enterprises are facing rising bad debt and lending rates,” she noted.
As for paying taxes, Vietnam
takes the 138th place, with the number of payments being 38, total time being
872 hours and total tax rate standing at 34.5% of profit.
The total tax rate at 34.5% of
profit, versus the corporate income tax rate of 25%, points to the corruption
situation in Vietnam, said Lan.
It seems the Government’s plan
for administrative reform has not produced positive results. Likewise,
Resolution 11, in which the Government commits to remove difficulties for
enterprises and improve the business environment, has not been as productive as
expected.
“Businesses asked me for advice,
but I did not know what to say. I just told them to rescue themselves first,”
said the expert.
Tu Hoang - The Saigon Times Daily
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