People waiting to have their paperwork processed at the Ho Chi Minh City’s Department of Planning and Investment.

Vietnam’s business environment has shown little sign of improvement despite serious reform efforts, said economist Pham Chi Lan, citing a new World Bank report.

Chi told Thanh Nien Weekly on Thursday that the rankings were mainly based on countries’ legal frameworks and practices.

Vietnam strived to improve its business environment in 2009, but some other countries have done much better, said World Bank Country Director in Vietnam Victoria Kwakwa at a Hanoi video conference about the report.

Kwakwa said the most important indicators in this year’s report were how well countries retained their competitive edge through the crisis and how well they took advantage of development opportunities.

Despite the fall in Vietnam’s overall position, the country’s standing improved or remained the same in some areas. In the business regulation category, Vietnam’s performance improved in several areas, including trade across borders and time for export and import.

Vietnam cut its corporate income tax rate from 28 percent to 25 percent and eliminated the surtax on income from the transfer of land. It also adopted a new enterprise income tax law and value added tax law.

In addition, increasing competition in the logistics industry and the application of new customs administration procedures as part of Vietnam’s World Trade Organization (WTO) membership reform program have reduced trade delays.

But in terms of starting a business, Vietnam ranked 116th this year, compared with 108th last year. Meanwhile, Vietnam fell to 147th in the paying taxes category, compared to 140th last year.

“The degradation is an alert,” said Lan. “This shows that our efforts to improve the situation have not come to life, and have not helped companies here.”

The government has asked agencies to help firms overcome business and production difficulties.

Agencies have implemented stimulus packages, but these have failed to help firms deal with many problems.

And many small-and medium-sized companies have complained that they have been unable to access bank loans under the government’s 4 percent interest rate-subsidy program, Lan said.

“The long-term measure to help Vietnam overcome the economic slowdown will be to help firms boost production and business.”

Administrative reforms

Despite many recent challenges, more governments implemented regulatory reforms aimed at making it easier to do business in 2008-2009 than in any year since 2004, when Doing Business started to track reforms here.

Doing Business recorded 287 such reforms in 131 economies between June 2008 and May 2009, 20 percent more than in the year before, said the report.

Reformers focused on making it easier to start and operate businesses, strengthening property rights, and improving the efficiency of commercial dispute resolution and bankruptcy procedures.

Reported by Bao Van