Vietnam’s legal reform efforts contribute to positive GDP growth: VCCI

Higher quality in newly promulgated legal documents and laws in terms of practicality and feasibility are reasons for a significant less number of circulars issued at ministerial-level agencies in 2020.

The government's effort in perfecting legal framework and policies to support businesses during the Covid-19 pandemic is a major factor helping Vietnam gain the positive GDP growth rate of 2.91 in 2020.

Vietnam, legal reform, administrative procedures, GDP growth, VCCI, covid-19, pandemic, government, laws  Overview of the meeting. Source: VCCI. 

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc gave his view at the launching ceremony of a report discussing Vietnam’s legal environment in 2020 on January 12.

In 2020, government agencies issued a total of 17 laws, 158 decrees, 39 decisions and 310 circulars.

“While the number of laws, decrees and decisions remain the same against previous years, there had been a sharp decline in the number of circulars,” stated Mr. Loc, referring to the corresponding figures in 2019, 2018 and 2017 at 467, 643, and 556.

“Higher quality of new legal documents and laws in terms of practicality and feasibility are reasons for a significant less number of circulars issued at ministerial-level agencies,” Mr. Loc continued.

According to Mr. Loc, this is also in line with the ongoing administrative reform initiated by the government, focusing on reducing the number of legislation pieces and regulations that businesses are required to follow and comply with.

“The works of drafting new regulations have been shifted to the National Assembly and the government, instead of ministries and ministerial-level agencies,” he added.

Last year, as the pandemic wreaked havoc on the local economy, government agencies issued 95 documents to help ensure efficient enforcement of laws and regulations that are aimed at addressing difficulties for local firms affected by the pandemic, including starting a business.

This resulted in Vietnam ranking 49th globally in terms of startup ecosystem, stated Mr. Loc.

Regarding the government efforts in improving the business environment, Mr. Loc pointed to Prime Minister Nguyen Xuan Phuc’s decision in setting up a task force to review and remove obsolete regulations.

“The government has been more active in receiving feedback from the business community, with the response rate of 55% in 2020, up 10% year-on-year,” Mr. Loc continued, while seven business lines were no longer conditional.

Vietnam, legal reform, administrative procedures, GDP growth, VCCI, covid-19, pandemic, government, laws  Director of the VCCI’s Legal Department Dau Anh Tuan.

New mindset required for drafting laws

Despite strong efforts in improving the quality of legal framework, Director of the VCCI’s Legal Department Dau Anh Tuan expressed concern over the overlapping and ambiguity in existing laws, causing difficulties during the law enforcement process.

Mr. Tuan cited an example of enterprises having to present their own business strategy for the authorities, or there remains confusion in differentiating between pharmaceutical materials and foodstuff.

“The issues of frequent inspection by local authorities have also caused inconvenience for businesses,” he added.

Mr. Tuan stressed these shortcomings show the necessity to push for stronger reform to ensure a more transparent and fair business environment, so that Vietnam could soon become among the top friendly-business countries in the ASEAN.

“The government should change the old mindset and adopt international practice in issuing new laws for greater convenience in doing business for enterprises,” stated Mr. Tuan.

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