PCI 2017: 40 per cent of FDI firms to expand in Vietnam

08:00 | 22/03/2018
Around 52 per cent of Vietnamese companies and 40 per cent of internationally invested companies will expand their business in the next two years, according to the Provincial Competitiveness Index (PCI) 2017.

The Vietnam Chamber of Commerce and Industry (VCCI) will release PCI 2017 this morning. PCI 2017 studied over 10,000 private firms and nearly 1,800 foreign-invested enterprises (FIEs).

"One notable finding in this year’s PCI is the high level of confidence expressed by both local and FDI companies," said Michael Greene, mission director of USAID, which has been collaborating with VCCI to conduct the PCI study for over ten years.

“Both international and domestic investors look at a range of factors when deciding where to invest to expand their businesses. They look at everything from political stability and geographic location to the well-trained work force available. They also look at infrastructure, particular locations, and the legal system. These are all factors that are reflected in the PCI," he said.

pci 2017 40 per cent of fdi firms to expand in vietnam

Both international and domestic investors look at a range of factors when deciding where to invest to expand their businesses. They look at everything from political stability and geographic location to the well-trained work force available. They also look at infrastructure, particular locations, and the legal system.

Regarding the highlight areas in this year’s PCI, Greene said entry costs for businesses and perhaps business support services have been improved in some provinces and so there is a number of areas that have shown improvements.

"However, the interesting thing we have noticed this year, which is highlighted in our report is the correlation between good governance and infrastructure. And then many provinces have shown major improvements in infrastructure and good governance. They are creating what we call “zones of prosperity,” where these two factors together seem to be important. The provinces we are looking at are Danang, Binh Duong, Bac Ninh, Dong Nai, and Vinh Phuc," he told VIR.

The PCI study has a tremendous impact on improving the business environment and increasing investment in Vietnam. Especially, since 2014 when Resolution 19 began to require that provincial authorities focus on improving their PCI score, there has been an increasing focus and local government officials have actually developed interesting action plans and created new ideas to improve the business environment.

"Vietnam should be very proud that it was the pioneer and led the way in PCI development and that many other countries are following and developing their own PCIs. The USAID has not provided financial support to other countries that are developing the PCI, but we are in contact with most of the countries that are developing PCI. We provide them with advice from our experts and on-going technical assistance. 11 countries are developing PCI, including many countries in Asia which compete directly with Vietnam, like Cambodia, Laos, Myanmar, Malaysia, and other countries around the world. Again, Vietnam should be quite proud that it is the leader in this important tour," he noted.

"In the coming years, we will continue to support the PCI, but we will also focus more on ensuring the long-term sustainability of the PCI, because it is important for the country and it lasts beyond any donor’s support."

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