Binh Duong PCI in light of foreign investment attraction

During the first 3 months of 2016, Binh Duong province absorbed $581 million of FDI capital, including 38 new projects and 22 projects adding more capital; 88% projects invested in industrial parks (IPs). Until now, registered FDI capital inflow to the province reached more than $ 24 billion; and Binh Duong is one of the five nation-level localities that reached $20 billion of FDI. These results implied that Binh Duong has been an attractive destination to foreign investors.

In recent years, Binh Duong has been one leading locality in investment attraction nationwide. Photo: Manufacturing activities at NewChoice Foods Co. in VSIP 2

A slight but solid increase

Provincial Competitiveness Index (PCI) of 2015 announced by Vietnam Chamber of Commerce and Industry of Vietnam (VCCI) and US Agency for International Development Cooperation (US-Aid) showed, Binh Duong was ranked 25^th nationwide. However, in the view of each sub-index, Binh Duong had encouraging changes. Namely, market entry points of the province reached 8.08 (7.83 in 2014); access to land 6.55 points (6.28 points in 2014); proactiveness 5.58 points (4.32 points in 2014); cost of time 6.85 points (6.59 points in 2014)… These are important sub-indices of the PCI scoring system.

Recently, at the Coordinating action conference of trade facilitation organized by PPc in collaboration with VCCI, local and foreign participants appreciated the efforts of the province to improve the PCI. The most striking evidence was that Binh Duong was still the top locality in terms of FDI inflow. However, the most concerned issue of Binh Duong is the integration trend into ASEAN Economic Community (AEC) and Trans-Pacific Partnership (TPP). At the conference, VCCI representatives shared, although the ranking was not high, Binh Duong made efforts in areas, such as infrastructure, administrative procedure reform, improving transparency... This was why many foreign investors want to make long-term cooperation with Binh Duong.

To improve PCI, from 2013, PPC has devised and implemented The scheme of PCI improvement, which most obviously demonstrates the dynamic, pioneering spirit of provincial leadership; and is one of nine PCI scoring goals, a key solution of Binh Duong, Currently, the PCI improvement has been carried out promptly and decisively by Binh Duong leadership in order to create an open working environment, attract strongly investments, resources into the province. This is the largest goal, is not just simply about the ranking.

At the conference, participants evaluated the impacts of free trade agreements (FTAs) on trade and investment field, and made recommendations to the province. Besides, at the meeting, participants discussed the issues should be concerned by Binh Duong to improve provincial business environment through the analysis of PCI sub-indices and surveys on taxation, customs.

According to Nestor Scherbey, Senior Advisor of ASEAN Free Trade Area (VTFA), TPP and EVFTA would have major impacts on investment attraction. Commercial activities in the twenty-first century require an integrated global supply chain to “flow” intermediate goods and finished goods around the globe.

Preparing for the integrated playground

According to VCCI representatives, the PCI competition is taking place at nation- and even continent-level. Therefore, right at the domestic market, PCI improvement is a critical thing to help in heightening the national competitiveness index.

Currently, in ASEAN, Vietnam is ranked 7th in terms of competitiveness, just higher than Laos, Cambodia and Myanmar. Among TPP’s members, Vietnam is ranked last in terms of competitiveness; regarding infrastructure, Vietnam is just higher than Peru, and is the last in the technology ranking chart. This is an issue concerned by all provinces, cities to better the business environment, attract investment, especially when the integration process is going on rapidly and strongly. The advantages of Vietnam are that 65% of the population is under 35 years of age, 78% of the population is 15 and above years of age, the literacy rate in the15-60 age group is 98.25%; the average minimum wage is below $140 / person / month.

According to experts’ assessment of Binh Duong competitiveness, provincial exports are increasingly diverse in type and quality; and Binh Duong may become the largest manufacturing and exporting center of the country. To prepare for the long-term integration strategy, Binh Duong signed a cooperation agreement with VCCI to focus on the key issues, such as: conducting researches, surveys of the business environment in Binh Duong; advising on administrative procedure reform, business environment improvement to enhance PCI; VCCI will assist the province in implementing, introducing economic potential, investment prospects of Binh Duong to domestic and foreign investors.

In addition, VCCI and Vietnam Alliance of Trade Facilitation in collaboration with Department of Justice and related agencies will collect opinions, feedbacks of companies, business associations on administrative procedures, policies in order to constantly improve the business environment.

At the same time, provincial agencies, sectors will support VCCI in realizing projects assisting provincial businesses through business’s participation in projects; extensive sharing of the actual situation at the locality, and good experiences, practices of projects. VCCI will coordinate to make researches on markets, needed skills to adapt to the international standards of the global market; approach specialized services related to international standard conformation; as well as deploy projects, programs assisting businesses in developing e-commerce business, technological information search, improving innovation, branding and promotion. ..

Reported by Phung Hieu – Translated by Ngoc Huynh