Three provinces lead PGI

The Provincial Competitiveness Index (PCI) report has been published annually since 2005. The report is a comprehensive set of 10 indices that assess the business environment in Vietnam. These indices include market entry costs, land access and land use stability, transparency, time costs, unofficial costs, the dynamism of local government, fair competition environment, business support policies, labor training, the legal framework and security.

Bac Ninh, Lang Son and Tra Vinh were honored in the top spots of the PGI index

This year, the PCI report has introduced the Provincial Green Index (PGI), a set of indices that evaluate and rank localities based on their environmental friendliness from a business perspective. The PGI assesses factors such as the level of environmentally friendly technology application by local businesses, their level of management and environmental behavior, and level of interest and readiness of local governments to invest in environmental issues. The first-year results of the PGI index reveal that Tra Vinh, Lang Son, and Bac Ninh are the top three provinces in terms of environmental friendliness from a business perspective.

According to Aler Grubbs, Mission Director for Vietnam, United States Agency for International Development (USAID) which supports the VCCI in compiling the PCI report, the index has played a crucial role in promoting dialogue, discussion, and effective actions on business environment-related issues for almost two decades. The introduction of the PGI is a significant step towards making the private sector more aware of the importance of environmental issues for business efficiency and long-term economic growth.

VCCI and USAID hope the PGI index will encourage provincial and city governments to pay greater attention to economic development linked to environmental protection. Its aim is to provide timely information to support provincial and city governments in formulating policies that attract investment in sustainable development, promote business-friendly environmental ecosystems, direct investors towards environmentally conscious practices, and encourage environmentally friendly projects in Vietnam.

Tra Vinh is ranked among the top three provinces in the PGI index

Feedback by nearly 12,000 firms

The PCI report was released as the VCCI marks its 60th anniversary (1963-2023) and the Comprehensive Partnership between Vietnam and the United States marks its 10th anniversary (2013-2023). The report was based on feedback from 11,872 businesses, including 10,590 private enterprises and 1,282 foreign-invested enterprises operating in Vietnam. Since its inception, a total of 176,496 businesses have participated in the PCI survey, reflecting the diverse aspects of the business environment in Vietnam.

The 2022 report ranked Quang Ninh, Bac Giang, Hai Phong, Ba Ria-Vung Tau, and Dong Thap provinces in the top five places in terms of high economic governance, with Quang Ninh coming in first for the sixth consecutive year. The report also reflects the business community and provincial government efforts in the first year of recovery from the COVID-19 pandemic. Domestic and foreign businesses continue to have a positive experience in light of the ongoing administrative procedure reform, designed to reduce time and the unofficial costs of doing business in Vietnam.

Nonetheless, the challenging economic environment is mirrored in the 2022 PCI poll, with business optimism remaining low and perceptions of reform in many sectors stagnating. Companies report various challenges, ranging from lack of funds, human resources, and infrastructure to the quality of grassroots government.

VCCI Chair Pham Tan Cong believes that in order to overcome these difficulties, provincial governments must continue to promote more supportive policies, as well as ensuring stability and a favorable business environment to compensate for global market instability.