related to business registration procedures, promulgating a new Bankruptcy Law and applying measures to promote contract enforcement, reduce registration costs and transfer of real estate for businesses.
Decree 163/2006/ND-CP on Secured Transactions has allowed enterprises to use existing and future assets, tangible and intangible, as collateral for loans by allowing the description of the type of assets and obligations in the mortgage contract. The new Enterprise Law has many liberal provisions, including the regulation that the main activities of a company must have the participation of investors, while increasing the requirement for information disclosure in related transactions and providing regulations on the responsibilities of directors and members of the board of directors of a company in protecting the interests of shareholders and the enterprise. However, Vietnam also needs to improve in some areas where Vietnam currently ranks low in three areas: investor protection, enterprise dissolution, and tax payment.
Vietnam is among the countries that provide the weakest protection for investors against misuse of corporate assets by directors or board members. The report also said that although the new Securities Law and Enterprise Law stipulate the duties and responsibilities of directors and board members, they do not provide a mechanism to enforce these duties.
The dissolution of enterprises in Vietnam still has many shortcomings. According to this report, the current mechanism for resolving bankruptcy cases in Vietnam is often difficult and time-consuming. For example, a bankruptcy case in Vietnam can take 5 years and the enterprise can only recover 18% of its debt. Therefore, very few enterprises dissolve according to the official regulations and procedures.
Vietnam has made many changes to its legal environment over the past year, contributing to improving the business environment and enhancing the ease of doing business, according to a new report by the International Finance Corporation (IFC) and the World Bank (WB). The report shows that Vietnam has made it easier for businesses to access credit by expanding the range of assets that can be used as collateral. The 2005 Civil Code and Decree 163/2006 on Transactions
The Security Law has allowed businesses to use movable assets – existing and future, tangible and intangible – as collateral for loans by allowing the description of the type of assets and obligations in the mortgage contract. Vietnam has also issued the Securities Law, which clearly regulates the operation of the securities market and securities trading centers. In addition, Vietnam has strengthened investor protection through the issuance of the new Enterprise Law, which stipulates that the main activities of a company must have the participation of investors, while increasing the requirements for corporate disclosure in transactions with related parties, and providing regulations on the responsibilities of directors and members of the board of directors of a company in protecting the interests of shareholders and the company.
In the system of laws related to the tourism sector, the birth of the Law on Tourism promulgated by the National Assembly at the 7th session of the 11th National Assembly and effective from January 1, 2006 is of great significance in institutionalizing the policies and guidelines for tourism development of the Party and State of Vietnam, a fundamental step in the process of perfecting the legal framework in the tourism sector, creating favorable conditions for tourism to develop strongly in the coming period, especially in the implementation of the 5-year socio-economic development plan 2006-2010, as the core to create a breakthrough development of the tourism sector. The Law on Tourism is built on the basis of inheriting the Tourism Ordinance but has many new points reflecting the reality of tourism activities at present and in the future, in line with the general development trend of the industry as well as in line with other policies of the State. In particular, the Law on Tourism has demonstrated the viewpoint of the Party and the State on developing tourism into a spearhead economic sector of the country. The Law on Tourism stipulates that the State has policies to encourage and provide incentives on land, finance, and credit for organizations and individuals investing in a number of tourism sectors; clarifying the sectors that the State implements and the sectors that the State supports to develop tourism, focusing on infrastructure investment, national promotion and advertising, protection of tourism resources and environment; allowing the establishment of a fund to support tourism development, etc. Based on these basic policies, the Government will promulgate
Implement a number of specific, distinctive mechanisms and policies, applied in a certain period to create a breakthrough in tourism development.
The Law on Tourism focuses on enhancing the attractiveness of tourism products. The provisions in the Law detail the identification of tourism resources, management issues, protection of tourism resources and environment, in order to ensure the principle of sustainable tourism development. The content of tourism planning is included in the Law to affirm that tourism development must follow the planning, ensuring the effectiveness of tourism investment nationwide and in each locality; preventing chaotic construction, loss of aesthetics, and negative impacts on the ecological environment in tourist areas and tourist spots. The identification, classification, recognition and management of tourist areas, spots, routes, and urban areas, the basic elements that make up tourism products, will have a positive impact on the formation of unique and attractive tourism products in Vietnam.
In addition, to have a standard legal framework for tourism development, avoiding spontaneous tourism activities, the Tourism Law has mentioned the issue of socialization in the tourism sector, using tourism as an effective tool to eliminate hunger and reduce poverty is more concerned through policies to encourage all organizations and individuals to invest in tourism development, encourage the community to participate and benefit from tourism activities. In the tourism business section, to improve the professionalism and quality of tourism services, ensure the rights of tourists, the Tourism Law supplements some contents to suit the current development situation. Specifically, adding the business line of developing tourist areas and tourist attractions to encourage investment in renovating and building new tourist areas and tourist attractions to satisfy the needs of tourists for sightseeing and relaxation; Supplement regulations on travel agencies and travel contracts, clearly distinguish the responsibilities of the agency-assigning enterprise and the travel agency in implementing the contents of the contract with tourists; prescribe conditions for tourist transport vehicles and tourist service establishments in tourist areas, points and cities to ensure the quality of tourism services; supplement regulations on ensuring security, safety, rescue, travel insurance and handling requests and recommendations of tourists so that tourists can feel more secure when traveling [9, pp. 3-9]
The regulations in the Law on Tourism have basically reached international standards, creating a solid foundation to attract foreign tourism businesses to invest and cooperate in business with Vietnam, while attracting more and more international tourists to Vietnam.
Obviously, the provisions on protection and restoration of tourism resources, tourism planning, recognition and management of tourist areas, routes, destinations and tourist cities; standardization of management staff, service staff, standardization of tourism service establishments; regulations on ensuring security, safety, rescue, travel insurance and handling requests and recommendations of tourists all aim to demonstrate the policy of our State in enhancing the competitiveness and attractiveness of Vietnam tourism, protecting the legitimate rights of tourists and investors and businesses in the tourism sector.
Vietnam becomes a member of the World Trade Organization (WTO): The commitment to implementing the rules in the WTO will help Vietnam promote the reform of domestic management policies to meet the requirements of the WTO, will create a favorable business environment, help attract more foreign investment capital, create conditions for many world-famous hotel groups to continue investing in accommodation business activities in Vietnam, create jobs for workers, improve infrastructure and service quality of the tourist accommodation system, overcome the shortage of high-quality rooms to serve tourists during major events of the country. Opening the market for large hotel groups to invest, on the one hand plays a central role in promoting competition in the domestic market, on the other hand, it also contributes to improving the productivity and efficiency of the entire industry compared to other countries. WTO accession will put pressure on Vietnam to gradually remove institutional barriers to competition in domestic product and factor markets, because these barriers erode the domestic economy's ability to cope with international competition. As international competition increases and trade increases, with access to markets, technology and management skills, Vietnam will have more opportunities to develop its markets. Competition will be a
important factor in encouraging institutional change as well as national growth and competitiveness.
However, the business community’s awareness of the significance of WTO accession is still limited, as Vietnamese businesses (especially small and medium enterprises) have little experience in international competition. Many businesses do not have formal relationships with foreign companies or do not compete with foreign businesses.
Technical facilities and infrastructure: In recent years, infrastructure development in Vietnam has made great progress, with about 9% of GDP invested in infrastructure. As a result, Vietnam is rapidly catching up with neighboring countries in terms of service provision and cost. Vietnam has made spectacular progress in infrastructure such as telecommunications, transport infrastructure and electrification. Many regional comparisons have shown that in some areas such as electricity and water, telecommunications, access is close to that of richer countries in the region. In general, increased infrastructure services lead to service prices becoming closer to regional prices and significantly increase the competitiveness of Vietnamese enterprises, especially in the service sector.
General assessment of the business environment in Vietnam: Although it has been greatly improved, in general, the business environment in Vietnam is still rated low by international organizations compared to other countries in the region and in the world. In 2008, according to the assessment of the World Economic Forum (WEF), Vietnam ranked 70th out of 134 countries ranked in the world. Compared to other countries in the region, Vietnam is only above the Philippines and Cambodia because Laos and Myanmar have not been included in the ranking. This ranking list is based on the main criteria of the economy such as: (1) Competitiveness based on natural weaknesses (natural resources, location, labor force...) (2) Competition based on the efficiency of the economy; (3) the country's creative capacity. According to the assessment of experts of the World Forum, the competitiveness of Vietnam is
The main factors that make Vietnam weak are infrastructure, human resources (training and higher education) and technology readiness [ 5, p.12 ]..
ng 11 5.33 12
c 13 5.28 11
17 5.22 14
21 5.04 21
country 30 4.70 34
34 4.60 28
39 4.54 n/a
a 55 4.25 54
m 70 4.10 68
es 71 4.09 71
109 3.53 110
Source: World Economic Forum (WEF)
Although the WEF's reports and assessments still have some controversial issues or reflect the reality of each country, the above assessments have provided a detailed overall picture of Vietnam's business environment and Vietnam's ability to achieve sustainable growth and development. It is important to note that these assessments and reports also have the participation of prestigious Vietnamese economic research institutes participating with international organizations, specifically:
Central Management Research and Ho Chi Minh City Institute of Economics).
Table 2.1 National competitiveness rankings (WEF 2008)
Ranking 2008 | 2008 Score | Ranking 2007 | |
Singapore | 5 | 5.53 | 7 |
Japan | 9 | 5.38 | 8 |
Hong K | Umbrella | ||
Korea | |||
Speaker | n | ||
Malaysia | |||
China | |||
Thailand | |||
Brunei | |||
Indonesia | |||
Vietnam | |||
Philippines | |||
Cambodia | |||
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Table 2.2 Specific indicators of Vietnam in the ranking Vietnam's weak indicators Ranking
The nature of competitive advantage 126
Average tax rate 126
Investor protection level 123
School Management Quality 120
Quality of the education system 120
Number of mobile phone subscribers 114
Bank strength 113
Port Infrastructure Quality 112
Trade Barriers 110
Level of financial markets 106
Universal high school education 106
Reporting and Auditing Standards 106
Burden of state regulation 105
Power supply quality 104
Obstacles to foreign ownership 104
Inflation 103
Cost of firing workers 103
Road quality 102
Salary Flexibility 101
Universal secondary education 100
Tuberculosis 100
Education spending 100
Source: World Economic Forum (WEF)
According to the specific ranking of each evaluation criterion, Vietnam ranks very low in terms of competitive advantage, investor protection, financial market level, trade barriers, port infrastructure, human resources and average tax rate. It is clear that the above factors of national competitiveness have a direct impact on Vietnam's hotel industry compared to other countries in the world because the hotel industry depends heavily on infrastructure (seaport system, airport), human resources, and investment trade barriers. In addition, these factors are specifically shown in the annual reports of prestigious world organizations such as (WEF) and will have more or less impact on investors because international organizations and foreign corporations often refer to the above reports. In addition, the fact that Vietnam is ranked lower than other countries in the region will also lead to disadvantages for Vietnamese enterprises, especially enterprises looking for foreign investment partners to enhance their competitiveness, because investors often tend to compare different countries according to this ranking before deciding to invest.
2.1.2 Competitiveness of Vietnam's tourism industry in the region (industry-level factors)
Regarding tourism infrastructure: According to many recent studies and surveys on the attractiveness and competitiveness of Vietnam's tourism industry, Vietnam has rich and diverse tourism resources (diverse natural resources and cultural resources distributed throughout the country) with comparative advantages over other countries in the region, but they are only at potential level. In addition, looking at the overall picture, tourism infrastructure is considered a weakness of Vietnam's tourism compared to other countries in the region. The system of seaports, airports and railways has not met the needs of tourism activities. Passenger transport capacity and airport systems are lacking and not synchronized, especially there is no airport large and modern enough to attract major airlines in the world as a hub.