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Doing Business 2009 report: Vietnam gets undeserved grade   2008-09-11 - NLD, TBKTVN, VnMedia

Right after the World Bank released Doing Business 2009 yesterday, in which Vietnam dropped five places in the rankings, senior economist Pham Chi Lan affirmed that Vietnam received an unfair grade.


Vietnam drops five places in WB business environment rating


WB releases Doing Business 2009
The country ranked 92nd in the Doing Business 2009 report, down from 87th in the previous report. It ranked fifth in Southeast Asia, after Singapore, Thailand, Malaysia and Brunei.


Lan said that some factors used to assess Vietnam’s business environment were ignored, while the report compliers chose unsuitable consultants, both of which led to the unfair judgment.


For example, the online business registration in HCM City, which was mentioned in the 2008 report as a breakthrough in administrative reform, was ignored in this year’s report. Vietnam has also made reforms in tax payment and investor protection, which have been recognised by the business community. However, the efforts were not mentioned by the report compilers.


“To begin researching Vietnam’s business environment, the compilers consulted foreign law firms and some Vietnamese lawyers. However, the problem is that foreign law firms do not provide consultancy services for Vietnamese businesses. The ranking does not reflect reality, because the report compilers chose the wrong persons to consult,” Lan said.


Lan also said that the ‘credit picture’ in Vietnam is quite different from what the report shows. While Vietnam assigns a ranking based on four indicators, the World Bank relies on legal documents. That explains why the World Bank’s report did not show what is happening with Vietnamese businesses, especially small- and medium-sized ones.


Explaining the gap between the figures in the report and the actual figures, Director of the International Finance Corporation (IFC), the arm of the World Bank, Sin Foong Wong admitted that the compilers used the figures of two years ago for some indicators. The report compilers referred to the business registration ranking of two years ago; therefore, renovations in business registration procedures are not reflected in the latest report.


Martin Rama, Chief Economist of the World Bank in Vietnam, also said that the report referred to 2007 data about tax payment, before Vietnam’s tax reform was kicked off.


Mr Rama said that the World Bank and IFC are ready to discuss these issues with the Vietnamese side at a suitable moment to find out accurate and reliable figures, in an effort to help foreign investors understand Vietnam and its business environment more correctly.


Lan, on one hand, said that Vietnam unjustly got a lower grade, on the other hand, said that the ranking is worth thinking about. Vietnam has made a big leap in reforming its business environment, but other countries have made bigger leaps, which explains why they have surpassed Vietnam in the renovation process.


Lan said that in the export ranking, Vietnam ranks 67th globally, but it is really less competitive than its main rivals in the region, like China and ASEAN countries.


She also emphasised that the business environment directly impacts the private sector, which is considered the driving force of Vietnam’s economy.

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