Investment News

Promoting business freedom so that Vietnam can 'turn into a dragon'


The trend of improving the business environment is slowing down, even the level of State intervention in the market shows signs of increasing. This shows that business freedom in Vietnam still has a lot of room for reform.

Freedom of business is still limited

Dr. Nguyen Minh Thao, Central Institute of Economic Management, said that if the 2014 version of the Investment Law stipulates 267 conditional business lines, the 2020 version of the Investment Law has reduced to 227 sectors. conditional business. Looking at the number has decreased, however, the actual review is still much higher. The reduction of the Nomenclature, mainly in the form of consolidating industry names or using a broader range of industry names, to reduce the number. A typical example is in the field of agriculture and rural development. For example, the regulation on "Trading in aqua feeds and animal feeds", which are two different areas of State management including "aquatic feed" and "animal feed", has been approved by the Government. mechanically assembled together into one, to reduce the quantity. The same is true for the business of “Trading in plant varieties and animal breeds”; The industry is "Business and testing services for aqua feeds and animal feeds"...


In the two fields of agriculture and construction alone, in fact, the number of conditional business lines is three times higher than the list stated in the Law on Investment 2020. This shows the reform of the business environment. Business is still more of a formality than a substance, Ms. Thao commented.

Along with that, there are many other outstanding problems such as: the situation of "installing" business conditions in circulars issued by the ministerial level is still overwhelming, land procedures are still very difficult, inconsistencies, etc. overlapping laws in various fields.... Making the business environment still full of barriers and restricting people's freedom to do business.

Fred Mcmahon, from the Fraser Institute (Canada), said that business freedom plays a very important role in promoting economic growth in other countries and Vietnam is no exception. Business freedom is associated with a healthier society, a cleaner environment, a higher GDP per capita, human development, democracy, and poverty alleviation.

Change to "turn into a dragon"

There is little freedom in business, so economic freedom is always ranked low. According to the assessment of the Fraser Institute, from 2000 up to now, Vietnam's economic freedom ranking has always been below 100. Specifically, in 2000, Vietnam reached 5.58 points (on a 10-point scale). 105th rank; in 2010 reached 5.9 points, ranked 128th; in 2015 reached 6.04 points, ranked 126th and in 2022 reached 6.42 points, ranked 113, out of a total of 165 economies.

The Heritage Foundation's economic freedom ranking is similar, in 2022 Vietnam ranks 84th out of 160 economies. In Southeast Asia, Vietnam is only ranked above Laos (151) and Cambodia (106), the rest are inferior to other countries.

The Fraser Institute data also shows that in the most economically free countries, only 2% of the population lives in extreme poverty ($1.9/day), compared with 31% of the free nations. at least. GDP per capita/year in the freest countries is $48,251, while in the free countries the lowest is $6,542.