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Remarks of Ms. Nilguen Tas, Chief and Deputy to the Director of the Competitiveness, Business Environment and Upgrading Unit Business, UNIDO Headquarters at the Kick Off Workshop of MPI-UNIDO-SECO Project

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Date:   15 April 2014

Event:  Kick Off Workshop of MPI-UNIDO-SECO Project

Venue: Grand Plaza Hotel, Hanoi, Viet Nam

Excellency Mr. Dang Huy Dong, Vice Minister for Planning and Investment
Dear Mr. MiroslavDelaporte, Head of SECO, Swiss Cooperation Office for Viet Nam,
Dear Colleagues from the Agency for Business Registration, General Department of Tax, Business Registration Offices,Viet Nam Chamber of Commerce and Industry, the private sector, Embassies, international organizations, UN and UNIDO
Distinguished Ladies and Gentlemen,

Let me startby warmly welcoming all of you to the kick-off workshop of the project on Expansion of the National Business Registration System, as we like to call it, the NBRS, to new commercial entities in Viet Nam. This project is the result of continuing fruitful collaboration between MPI, SECO and UNIDO, and builds on our partnership including with NORAD from 2008-2013. Allow me also to say how pleased I am to see so many participants at this workshop and thank all of you for your interest in this event.

You already have a good idea of what this new project on expansion of NBRS to new commercial entities aims to achieve, thanks to the remarks made by Vice Minister Dong, and colleagues from SECO, ABR and VCCI. Presently, NBRS captures information on only those enterprises that are registered under the Enterprise Law, and the Government would like to expand the coverage of NBRS to all commercial entities. This is a challenging objective; however, with the capacities and experience built up within Viet Nam in the course of the previous project, combined with international best practice knowledge and expertise from UNIDO, it is an achievable objective.

Today, the more important questions to respond to are: What value will this new project add? Is it worth the considerable amount of effort and the money that will be invested? What will the stakeholders gain?

The recent global financial crisis was a wake-up call for all of us. As we saw, and still see, job creation and job quality are key factors of social and economic order and development and it is the enterprises that create the jobs we all need. So, how well the enterprise sector copes with crisis is significant. During some of those more difficult times when the global crisis was also hitting Vietnam rather harshly, Leaders in the country needed information on the health of the economy, particularly on how the enterprises were dealing with the challenges. Can you guess how the top-level leadershipmonitored the health of the enterprise sector?

At every Cabinet meeting and sometimes more often, the Prime Minister and Ministers received reports on the number of enterprises that registered, that suspended their operations or dissolved in the period. Leaders were also able to look at these statistics at the level of sub-sectors and even at the level of main business lines. Going deeper into data, they were able to track what was happening at each province and compare this information with the picture in the last month, last week or, if they wished, with the previous day. Among other considerations, the leadership used the information provided by NBRS to make decisions to support the enterprise sector and the economy through those turbulent times. An independent evaluation team calculated what the leaders saw in the reports from NBRS: even in the most difficult times, with many enterprises closing down, the economy was able to support the creation of new enterprises at the net rate of 4%, meaning about 25,000 new enterprises were created per year. Policies were guided and better focused on areas where needs were more acute by this valuable information. Such information was not available before the NBRS.

Although NBRS proved its value in more than one way, it does not yet provide the full picture about the enterprise sector in Viet Nam; foreign invested enterprises, some state owned enterprises, credit institutions, enterprises registered by the management boards of industrial and export processing zones, scientific and technological enterprises, law firms, education firms, and many other types of legal, commercial entities are not in the NBRS. In other words, presently, NBRS shows only a partial picture of the economy, and as its name implies, the project we are announcing today aims at assisting our partners to incorporate all commercial entities into the NBRS.

A full picture of the economy; covered in a fully-grown NBRS, is not only important for policy makers. In my personal opinion, it is more important for the business community itself. After the break, you will watch a short demonstration of the National Business Registration Portal. You will see that, through the Portal, anybody in Viet Nam and abroad, can access the Portal to study the profile of an enterprise registered in the country. Let us say you are foreign manufacturer interested in investing in Viet Nam. One of the first things you would want to know is the availability of suppliers. You can get this information quickly and very inexpensively through the Portal; all you would need to do is to query the national database, using the business lines of your potential suppliers. Or, you may be the owner of a business located in Da Nang and want to do business with some shareholding companies in Ho Chi Minh City. Before you get into a commercial relationship with your potential partners, for example, extending trade credit to them, you would want to know how well they are doing, financially. Looking at their annual financial statements will give you an idea of their financial capability. So, using NBRS reduces the risks of doing business for you: a very valuable and inexpensive tool that you can access from your desk at your office, at the airport in anywhere in the world or in the comfort of your home, because it is web-based and available 24/7, and time zones do not matter. Thus, it is important to cover the whole population of commercial entities in Viet Nam in the NBRS, so that irrespective of ownership, type of business or business line, legally valid information on enterprises is always available to the business community, the public sector and the public at large.

I’m sure you noted, I have not talked about the benefits that the enterprise sector gained due to simplification of registration procedures and their computerization, because, as I have tried to demonstrate with some examples, what NBRS offers is not simply limited to “registering a business”; it is much more than that. On the other hand, simplifying registration also resulted in significant gains. According to the estimates made by the International Finance Corporation (IFC), which, as you know, is an entity in the World Bank group, enterprises registering for the first time in 2010 saved about US$ 4 million due to simpler procedures. This estimate did notinclude either the cost of time saved or the cash costs of amendments that already registered enterprises incurred. When these are included, total cost savings from bureaucratic procedures at least doubled to around US$ 8 million. The savings estimated were made in the birth year of NBRS, when the system was operational for only about 6 months! Expanding the NBRS to all commercial entities in Viet Nam will also expand the savings to the whole of the enterprise sector in the country and to the economy, and I’m sure the business sector can put such savings to better uses such as investing in people, technologies and so on.  

Today, we are at the start of a new endevor and with your permission; I would like to recognize the hard work of a very large team of people who brought us here, before I conclude. High-level commitment and strong leadership was provided by the MPI leaders and leaders of Ministries of Finance and Public Security. Without their leadership, none of this would have been possible.

The Agency for Business Registration under the leadership of Mr. Le QuangManh and his whole team worked day and night with the UNIDO team led by my colleague Mr. Gunnar Koren. Scores of national and international experts gave their best to achieve the results that we proudly share with you today. Around 600 business registration officers from 63 provinces of Viet Nam contributed not only to the design of NBRS, but also learned how to operate it in the most customer oriented way and will continue to partner with the core team, when we start on the journey to expand the system. Communities of NBRS friends in the legal and financial sectors, within business membership organizations, Ministries and Agencies, all the way to the Office of the Prime Minister were first introduced to the reforms on business registration by our core team, and then they became supporters and provided the motivation to move forward. Finally, our development partners SECO and NORAD trusted both their funds to this Vietnamese initiative and provided their valuable ideas and suggestions in the true spirit of a partnership.

On behalf of UNIDO and as the project manager, I thank all those I mentioned, and those who I might have inadvertently missed, most sincerely. I am looking forward to our continued collaboration and teamwork in the next 4 years with them and to adding many more stakeholders to our partnership, as expansion of NBRS to all commercial entities in Viet Nam progresses.

Many thanks, also to all of you, for your support and attention.