PROVINCIAL COMPETITIVENESS INDEX (PCI) AND RECOMMENDATIONS TO THE VCCI RECORDING TO THE PROVINCIAL COMPETITIVENESS INDEX

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS -*** MID-TERM INTERNSHIP REPORT Major: International Business Economics PROVINCIAL COMPETITIVENESS INDEX (PCI) AND RECOMMENDATIONS TO THE VCCI RECORDING TO THE PROVINCIAL COMPETITIVENESS INDEX Full Name: Nguyen Thi Hong Ha Student ID: 1515150041 Class: English 26 – High quality program Course: 54 Instructor: MA Nguyen Huyen Minh Hanoi, August 2018 TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF FIGURE PREFACE CHAPTER 1: GENERAL ISSUES ON THE PROVINCIAL COMPETITIVENESS INDEX 1.1 Overview of The provincial competitiveness index (PCI) Agencies 1.1.1 About USAID 1.1.2 About VCCI 1.1.2.1 General information 1.1.2.2 History of formation 1.1.2.3 Functions and missions of VCCI 10 1.1.2.4 Organization structure of VCCI 13 1.2 About The provincial competitiveness index (PCI) 14 CHAPTER 2: THE COLLECTING DATA PROCESS AND ASSESSING THE QUALITY OF THE PROVINCIAL COMPETITIVENESS INDEX 16 2.1 The process of implementing the provincial competitiveness index 16 2.1.1 Indicators constituting the provincial competitiveness index 16 2.1.2 Methodology of data collection and PCI building 23 2.1.3 The actual process of implementing the provincial competitiveness index in recent years 24 2.2 The PCI collecting data process 25 2.2.1 Position in mid-term internship process at VCCI 25 2.2.2 Details of the PCI collecting data process 26 2.2.2.1 Source data 26 2.2.2.2 The process of collecting data for PCI 26 2.2.3 Response Rate 28 2.2.4 Distribution of PCI respondents 29 2.3 Assessing the quality of the provincial competitiveness index 31 2.3.1 Utility of the provincial competitiveness index 31 2.3.1.1 Advantages of the provincial competitiveness index with related parties 31 2.3.1.2 Impacts of the provincial competitiveness index with related parties 32 2.3.2 Some disadvantages of the provincial competitiveness index 34 CHAPTER 3: RECOMMENDATIONS TO VCCI RECORDING TO THE PROVINCIAL COMPETITIVENESS INDEX 37 3.1 Recommendations to improve the quality of PCI collecting data process 37 3.2 Recommendations to increase the benefits of PCI for related parties 38 3.3 The lesson learnt and personal experiences 40 REFERENCES 43 APPENDIX 45 LIST OF ABBREVIATIONS No Abbreviation Full name VCCI Vietnam Chamber Commerce and Industry USAID The United States Agency for International Development PCI The provincial competitiveness index CDCS The USAID Country Development and Cooperation Strategy SOEs State owned enterprises CIT Corporate incomes tax FIEs Foreign invest enterprises PPC Proactivity and Provincial Leadership SMEs Small and Medium enterprises 10 GTD General Department of Taxation 11 GSO General Statistics Office of Vietnam 12 CEO Chief executive officer 13 LLC Limited liability companies 14 DDCI Initiative of District/Department level Competitiveness Index 15 FDI Foreign direct investment LIST OF FIGURE Number of Name of figure figure Page Figure 1.1 Diagram of organizational structure of VCCI 12 Figure 2.1 The component index of PCI 15 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 The actual process of implemeting the PCI over the years Distribution of PCI respondents by sector Distribution of PCI Respondents by legal form, size and age Statistics on PCI’s impacts Graph of the number of responded enterprises year by year 24 28 29 32 33 PREFACE Rationale In the process of deep integration into the world economy, Vietnam has many opportunities to develop and also face many difficulties and challenges By the time of 2018, the time when the market for goods and services is fully expanded, the issue of raising the competitiveness of the country becomes more urgent National competitiveness is derived from the ability to operate the business environment of each province or city, hereafter referred to as the provincial level Many economists consider the Provincial Competitiveness Index (PCI) to be the most objective indicator of the ability of the local government to regulate the business environment However, the PCI highlights the strengths and weaknesses of provincial governance without indicating the cause or finding a remedy Therefore, the results of the study only help to classify and identify provinces based on PCI, but there are no solutions to help provinces improve this indicator With the knowledge of learning at school, the initial perceptions of approaching the practice and derived from the above thinking, I decided to choose the topic "Provincial Competitiveness Index (PCI) and recommendations to the VCCI recording to the provincial competitiveness index " as internship report The report consists of three chapters: Chapter 1: General issues on the provincial competitiveness index Chapter 2: The colleting data process and assessing the quality of the provincial competitiveness index Chapter 3: Recommendations to the VCCI recording to the provincial competitiveness index I would like to express my gratitude to MA Nguyen Huyen Minh, for his insightful guidance and continuous support He has not only oriented topic for me so that it can match with current situation and my ability but also given me thorough comments for my research from the start I also would like to thank for helps in the Provincial Competitiveness Index Team of the Vietnam Chamber of Commerce and Industry, especially Ms Luu Ngoc Anh – PCI Project Manager and Mr Dang Van Truong – No.1 PCI Team Leader I hope to receive the comments of teachers and friends, so that the ideas in your topic will soon come true CHAPTER 1: GENERAL ISSUES ON THE PROVINCIAL COMPETITIVENESS INDEX 1.1 Overview of The provincial competitiveness index (PCI) Agencies 1.1.1 About USAID Address: 15/F, Tung Shing Building, Ngo Quyen, Hanoi ,Vietnam Tel: (84-24)3935 1260 Fax: (84-24) 3935 1265 Website: www usaid.gov/vietnam The United States Agency for International Development (USAID) is an independent federal agency that provides economic, development and humanitarian assistance around the world in support of U.S foreign policy goals Currently, USAID programs in Vietnam support the country’s progress by focusing resources in health, economic growth and governance, higher education, environment and climate change and vulnerable populations, including persons with disabilities USAID played a key role in helping Vietnam reach out to global markets through its accession to the World Trade Organization and the Vietnam-US Bilateral Trade Agreement In partnership with the Government of Vietnam, USAID continues to promote greater market integration through its support for the Trans-Pacific Partnership under negotiation USAID also supports efforts to strengthen the rule of law and improves economic governance while seeking to further Vietnam’s integration into the global economy as it continues its transition to a market-driven system Working with the Government of Vietnam, USAID promotes transparency in law making, accountability, access to information and increased competitiveness Under the USAID Country Development and Cooperation Strategy (CDCS) for Vietnam for the 2014-2018 period, USAID assistance will be focused on collaborative efforts that support the goal of Vietnam’s continued transformation into a responsible, more inclusive partner 1.1.2 About VCCI 1.1.2.1 General information Address: Dao Duy Anh St, Dong Da District, Hanoi Tel: 84-24-35742022 Fax: 84-24-35742020 Email: www.vcci.com.vn 1.1.2.2 History of formation Vietnam Chamber of Commerce and Industry (VCCI), formerly known as the Chamber of Commerce of the Democratic Republic of Vietnam, was established in 1963 to promote trade between Vietnam and other countries in the world Starting with only 93 member organizations, VCCI has experienced a series of development periods corresponding to the periods of Vietnamese history During the war years, VCCI has focused on the maintenance of trade relations between Vietnam and some countries and territories according to the import and export demand of the country After the war, VCCI expanded its operations throughout the country, establishing relations with many countries around the world, participating in the activities of many economic organizations In 1982, VCCI changed its name to the Chamber of Commerce and Industry of the Socialist Republic of Vietnam and expanded its operations to the manufacturing sector Since Vietnam “opened up”, VCCI has entered a new stage of development through the Second National Congress in 1993 and the third in 1997 VCCI continues to grow in size wide as well as depth, catch up with the pace of development of the country Through its domestic and foreign activities, VCCI has actively contributed to the country's renewal process, playing an important role in the country's economic development and transformation, as well as its integration with international and regional markets In 1998, VCCI became an official member of the National Fatherland Front and expanded its contribution to the development of Vietnam As the representative of the entire business community in Vietnam, Vietnam of Commerce and Industry has been a dynamic and effective consultant to the government in the development of the laws, mechanisms, policies and business and investment environment system in Vietnam VCCI has maintained close coordination with government agencies in guiding business operations and policy change proposals to facilitate economic and trade development VCCI has protected the interests of Vietnamese enterprises in the relationship at home and abroad In promoting trade, VCCI has jointly organized governmental activities such as investment, information and consulting, brokerage in investment and business, marketing, exhibitions, trade fairs, industrial arbitration, etc Thanks to the above activities, the Chamber has become the trustworthy representative and the largest trade and investment promotion center in Vietnam With admiration for organized development, VCCI will play a central role in restoring trade associations, corporations, expanding the Chamber's trade promotion network and in particular attracting more small and medium enterprises VCCI has made a great contribution to improving the business environment in Vietnam and effectively supporting domestic and foreign entities in business activities of households in Vietnam 1.1.2.3 Functions and missions of VCCI The Vietnam Chamber of Commerce and Industry (VCCI) is a national organization that brings together and represents the business community, employers and business associations in Vietnam for the purposes of development, protection and support enterprises, contribute to the socio-economic development of the country, promote the economic, trade and scientific-technological cooperation between Vietnam and other countries on the basis of equality and win-win co-operation The Chamber of Commerce and Industry of Vietnam is an independent, nongovernmental, non-profit organization with legal status and financial autonomy v Function: 10 component index are mutually supportive, although some index may bring out results in the long run such as labor training index, legal institution 3.3 The lesson learnt and personal experiences v About the knowledge learnt - To learn about the knowledge about macroeconomic policies, factors affecting the microeconomic economic and the distribution of economic sectors in Vietnam - Understanding the business environment of the provinces in the country with the advantages and disadvantages that businesses face - Understanding the competitive advantages of each provinces to attract FDI enterprises and can listen opinions of domestic and foreign entrepreneurs about actual business activies in some fields of Vietnam which not appear in curriculum v About attitude in the internship process - This is the first time I contact with the professional working environment, therefore the first days when I go to department, I have not adapted to the style of work such as in time to arrive, arrange the first and final job, and how to complete the deadline and how to combine the rest and work to achieve the highest efficiency So far I have been familiar with the way the department works and adhere to, respecting the cultural values that VCCI has created - As new internship go to work and apprenticeship, in the early days I tried to get acquainted, chat with other people in the department so that people feel sympathy with me But after some time I continued to try to talk, I realized I was disturbing people and influencing work I talked too much while the listener is not excited about the story However, after that, I hesitated to contact, afraid to ask my seniors about issues related to work as well as in life that people not feel my friendliness and attitude of progress I had a lesson in how to communicate as a new employee so that I could listen and talk flexibly, in the right time, in the right place - This internship has taught me how to integrate into the workplace environment, living harmoniously, obey the rules and regulations of the company which set 40 out I have learnt skills, ethics, personality and perfection myself as greeting at the company when going to and leaving, asking the instructor when the schedule is changed or unexpected work, and promised to go to work at the following day - During the internship, I realized there was a huge difference between the knowledge learned in books and the curriculum with what was learned from the actual work For example, when an FDI enterprise in Binh Thuan province asked me about how the business environment in Hanoi attracts foreign investors, I could not answer correctly and satisfactorily without having assistance of Mr Dang Van Truong and Ms Luu Ngoc Anh v Internship in a short period but this is an important time for me to prepare for a long journey ahead After this internship I have learned and practiced some of the skills I can apply for a future job or anything: - Listening and observation skill: The initial confusion between the university environment and the workplace environment has taught me to be proactive in every situation Carefully observation of people, the surrounding landscape is a necessity because the seniors who has many years of experience may be available to guide and help me but they still has their work and can not spend all their time to resolve everything, so I will actively ask when they are free and ready to help - Arranging time skill: In the internship process, I not spend full time to work at VCCI but alternating between working days and studying days to get some necessary certificates There is a lot of tension between the working and the study I feel that I now get used to this by giving reminders of my plans and schedules to get things done in time and gradually reduce my pressure - Self-assessment skill: Through the internship process, I have had take an overview and assess about myself Strengths such as harmony, adaptability, communication have been promoted well, but weaknesses such as time management, teamwork still exist v During the internship process at VCCI I received some comments from the agency as follows: 41 - Good things: get along with people, be polite, not automatically leave without permission; not automatically leave the position during working time; - Reprimanded things: sometime I go to work late, not flexible in dealing with the situation arise, resulting in dependence on the guidance of the senior - Overcoming limitations:   Before doing something, I have to ask carefully about what I not understand or misunderstandings, when everything is clear then to start doing; not anthing personally or emotionally   Prepare the documents in advance that need to be brought to the department for clarification and complete the sections in the report Being able to work in a real working environment, experience work, be involved, and be a contributor to the perfection of the project that helps me accumulate a wealth of valuable experience that I have never experienced, especially the serious attitude to work and responsibility to the work assigned Furthermore, the process of internship has helped me to recognize the difference between theory and practice, and the ways in which these situations can be resolved flexibly and effectively Actually, this time has given me deep lessons to be able to orient the future as well as to develop myself improvement plans in the final year at the Foreign Trade University In the near future, I plan to complete my study programme at Foreign Trade University, and study further courses in Accounting and Auditing, and intend to study abroad for master's degree As for career orientation, after the internship as well as some parttime work, I found myself suitable with the work related to computation and data analysis so that I wanted to become an employee in the field of audit and specifically is the tax advisor I hope that I will be able to complete my at the university and accumulate more knowledge about the profession to pursue in the future so that I can achieve my career goals after graduating from Foreign Trade University in 2019 42 REFERENCES Edmund Malesky and the authors, 2005, Vietnam Competitiveness Index 2005, Full Report, VNCI, Hanoi Vuong Dinh Hue, 2016, Nang cao nang luc canh tranh quoc gia boi canh hoi nhap quoc te, Electronic Portal of the Government of the Socialist Republic of Vietnam, Hanoi Vietnam Chamber of Commerce and Industry, 2006, 2005 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2007, 2006 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2008, 2007 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2009, 2008 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2010, 2009 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2011, 2010 PCI Full Report, Hanoi Vietnam Chamber of Commerce and Industry, 2012, 2011 PCI Full Report, Hanoi 10 Vietnam Chamber of Commerce and Industry, 2013, 2012 PCI Full Report, Hanoi 11 Vietnam Chamber of Commerce and Industry, 2014, 2013 PCI Full Report, Hanoi 12 Vietnam Chamber of Commerce and Industry, 2015, 2014 PCI Full Report, Hanoi 13 Vietnam Chamber of Commerce and Industry, 2016, 2015 PCI Full Report, Hanoi 14 Vietnam Chamber of Commerce and Industry, 2017, 2016 PCI Full Report, Hanoi 15 Vietnam Chamber of Commerce and Industry, 2018, 2017 PCI Full Report, Hanoi 16 Vietnam Chamber of Commerce and Industry, The Asia Foundation, 2005, Good practices in provincial economic governance in Vietnam, Hanoi 17 Central Institute for Economic Management (CIEM), Asian Competitiveness Institute (ASI), 2011, Vietnam Competitiveness Report 2010, Hanoi 18 M.A Nguyen Thi Huyen Tram, 2014, Enhancing the competitiveness of Vietnamese enterprises in the integration period, Hanoi 43 19 Website of Vietnam Chamber of Commerce and Industry http://vcci.com.vn 20 Website of Vietnam provincial competitiveness index http://pcivietnam.org 44 APPENDIX APPENDIX 1: The PCI 2017 Data APPENDIX 2: The methodological changes in 2017 APPENDIX 3: PCI questionnaires sample 2018 APPENDIX 4: PCI phone survey 2018 45 FOREIGN TRADE UNIVERSITY SOCIALIST REPUBLIC OF VIETNAM Faculty of Economics Independence – Freedom – Happiness and International Business -*** - -*** - MID-TERM INTERNSHIP ASSESSMENT Student’s full name : Nguyen Thi Hong Ha Student ID : 1515150041 Class : English 26 – High class program – K54 Major : External Economics Internship at : Vietnam Chamber of Commerce and Industry (VCCI) Mentor : Ms Luu Ngoc Anh (Team leader of PCI Project) Position : PCI Project Intern Telephone number : 0981083397 COMMENTS Hanoi, August 4st 2018 Signature Nguyen Thi Hong Ha 46 47 48 49 50 51 52 53 54 ... competitiveness index Chapter 2: The colleting data process and assessing the quality of the provincial competitiveness index Chapter 3: Recommendations to the VCCI recording to the provincial competitiveness. .. (PCI) and recommendations to the VCCI recording to the provincial competitiveness index " as internship report The report consists of three chapters: Chapter 1: General issues on the provincial competitiveness. .. of the provincial competitiveness index with related parties 32 2.3.2 Some disadvantages of the provincial competitiveness index 34 CHAPTER 3: RECOMMENDATIONS TO VCCI RECORDING TO THE PROVINCIAL