Da Nang leads the way in competitiveness report.
The Provincial Competitiveness Index 2014 (PCI 2014), released on April 16, shows that optimism is improving among foreign invested enterprises (FIEs). “The PCI-FDI business thermometer is at its highest point since 2006,” Dr. Edmund Malesky from Duke University said. Disturbances by workers at VISP Binh Duong and Formosa Ha Tinh last May had clearly not influenced the belief of FIEs in Vietnam’s business environment.
Significantly, of 1,491 foreign firms surveyed, 79.61 per cent and 82.85 per cent said that the disturbances caused by workers at Binh Duong and Ha Tinh, respectively, in the wake of last year's East Sea dispute did not affect their investment in Vietnam.
There were four strengths of Vietnam relative to its competitors in 2014, the Index reported: lower taxes, less expropriation, less policy uncertainty, and more policy influence.
On the other hand, there were four weaknesses relative to its competitors: corruption, infrastructure, the public service, and regulations. “Vietnam seems to pay more attention to petty corruption than big corruption,” said Mr. Dau Anh Tuan, Director of the Legal Affairs Department at the Vietnam Chamber of Commerce and Industry. He mentioned that loopholes in bidding and stipulations were utilized for bribery and corruption, and he emphasized that this was not a problem of any one city or province but the system.
Additionally, FIEs were very confident about the security of their property, Dr. Malesky said.
Lastly, enterprises’ ability to predict the impact of changes in law remained stable, the PCI report said, but had not improved a great deal each year.
Da Nang earned the highest score in the PCI 2014 report. The city is the only location where investors did not perceive declining infrastructure quality between 2013 and 2014. Moreover, it was the only city or province with less than two annual inspections conducted on each FIE. It was also evaluated as being the easiest location for foreign employees to obtain a work permit.