Vietnams requires greater judicial effectiveness to earn market economy recognition: CIEM
It would prove a safe business environment and effective legal system in place to protect investors rights.
Vietnam requires greater judicial effectiveness to boost the “marketness” level of the economy, according to Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM).
Overview of the conference. Source: Nguyen Tung.
|
Vietnam current stands at 133th out of 190 economies in terms of “Resolving insolvency” and 89th in “Protecting minority investors” in the World Bank’s 2019 Ease of Doing Business ranking, while its overall ranking has moved down one notch from the 68th to 69th.
Cung also expressed concern that Vietnam’s economic freedom score is 53.1, making its economy the 141st freest in global and 35th in regional rank in the 2018 Index released by the US-based Heritage Foundation.
According to Cung, a company’s bankruptcy must be swiftly processed by authorities so the related assets and business opportunities are transferred to others. Similarly, the court must settle a contractual dispute in a fair and timely manner so that all parties could move on.
“These are the required characteristics for a fully operational market economy. Unfortunately, contractual dispute and bankruptcy procedures are among Vietnamese enterprises top concerns,” Cung said.
This is increasingly important for Vietnam as the number of enterprises temporarily ceasing operation in 2018 reached the five-year high of 90,651, up nearly 50% year-on-year, he continued.
In 2014, the Vietnamese government introduced the first Resolution No.19, which later was issued annually, as a bid for Vietnam to become one of the top four business-friendly countries in ASEAN, which incorporates international standards on evaluating business environments, including the Doing Business Indicators of the World Bank.
However, “Vietnam is unlikely to reach its ASEAN-4 target, unless there are significant improvements in those two indicators, requiring a major efforts from Vietnam’s judicial system to be supportive to the business community,” Cung warned.
Cung added that these are important factors for not only locals but also for foreign investors, as they prove to be components of a safe business environment and effective legal system in place to protect their rights.
As a result, there must be a stronger pressure from the government for substantial changes in Vietnam judicial system.
Starting 2019, the government released Resolution No.02 in replacement of Resolution No.19 targeting 5 – 7 places higher in World Bank’s ranking in 2019 and 15 – 20 places higher in the next three years.
A key change in Resolution No.2 is a push for e-payment and e-public services, Cung said, adding that this would minimize the contact between citizens and public servants, and in turn reduce potential bribery and bureaucracy.
At the conference, Dau Anh Tuan, director of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI), said most ministries have attained positive results in removing and simplifying business conditions in 2018 through the issuance of 25 decrees and the revision of other 80.
The move was in response to the government's request of removing 50% of total business conditions at all ministries and ministerial-level agencies before October 31, 2018.
However, there must be a stronger supervision mechanism to prevent the introduction of new business conditions.
In 2019, the government continues to set target of removing 50% business conditions.
In a directive issued last July, Prime Minister Nguyen Xuan Phuc strictly prohibited government agencies and ministries from creating new business conditions or abusing specialized inspection.
According to the PM, business condition removal is one of the key measures for economic growth and efficiency, requiring strong efforts from government leaders and ministers.
22:32, 2025/01/09
Support measures to strengthen Hanoi's small businesses and local industries
In 2025, the geopolitical and economic landscape is expected to remain complex, affecting production, investment and trade activities.
22:24, 2025/01/09
Hanoi's new appartment supply triples to highest level since 2020
In 2025, the new supply of apartments in Hanoi is expected to remain robust, reaching over 31,000 units, higher than in 2024.
22:19, 2025/01/09
Hanoi's foreign trade turnover hits US$60.1bn in 2024
The city will continue to support businesses in exploring new markets, capitalizing on the Free Trade Agreement of which Vietnam is a member.
11:46, 2025/01/09
Vietnam confident of achieving 8% growth rate in 2025
Key drivers of Vietnam’s growth include institutional reforms and decentralized governance.
21:51, 2025/01/08
Hanoi Farmers' Association embraces digital farming and sustainability
The association aims to innovate its approach and strengthen the connection between agricultural production and sales.
17:17, 2025/01/08
European companies endorse Vietnam as investment destination
A large number of European companies foresee an improvement in the macroeconomic outlook for Vietnam in the first quarter of 2025.
- Hanoi's flower market flourishes ahead of Tet 2025
- All-time high for Vietnamese FDI in 2024
- Mechanisms matter to promote energy efficiency in Vietnam's industrial sectors
- Vietnam prioritizes agriculture and renewable energy for access to green loans
- Hanoi targets to become nation’s logistics hub
- Vietnam GDP expands by 7.09% in 2024