Businesses' concerns about "institutional bottlenecks"

General Secretary To Lam pointed out three major "bottlenecks" today: institutions, infrastructure and human resources, in which institutions are considered the "bottleneck of bottlenecks".

Enterprises face many institutional bottlenecks, especially when they want to do social housing projects.

After 11 times of consultation, it is still not finished.

Bringing his feelings to the workshop "Removing legal bottlenecks for investment in infrastructure and real estate development" organized by the Association of Foreign Investment Enterprises (VAFIE), Mr. Nguyen Huu Duong, Chairman of Hoa Binh Company shared that since 2000, Hoa Binh Company has switched to the construction sector, currently having 3 housing construction projects and a hotel in Hanoi. Responding to the Government's call to build 1 million social housing units, in 2021, his company applied to build social housing, but could not do so because there were too many bottlenecks.

According to Mr. Duong, the Housing Law stipulates that every year, the provincial People's Committee must allocate a budget for site clearance, infrastructure construction and organize bidding to select investors to build social housing, but up to now, Hanoi has not allocated a single dong of budget for site clearance, infrastructure construction and bidding for investors, so although the 2014 Housing Law has "ended", up to now, in the capital city, there is no social housing project organized for bidding. All social housing projects in Hanoi are applied for by enterprises themselves and the social housing part is within 20% of the commercial housing land fund.

Many provisions in legal documents have many different interpretations and explanations. There are provisions that I don't know who to ask because I don't know which level to ask.

“The Housing Law also stipulates that in cases where enterprises and cooperatives have legal land use rights, are in accordance with planning, and have a need to build social housing, they will be assigned as investors; Decree 30/2021/ND-CP stipulates that after receiving an application for social housing, within a maximum of 20 working days, the provincial People's Committee must issue an investment policy.

Our company has the right to legally use 3,500 m2 of land in Linh Nam ward (Hoang Mai district). On December 30, 2021, I submitted a dossier to the Hanoi Department of Planning and Investment to request to build social housing. According to regulations, on February 22, 2022, the investor recognition result will be received, but the Department of Planning and Investment must consult with departments, branches and sectors, so on May 24, 2022, it submitted to the City People's Committee a request to grant investment policy for Hoa Binh Company to build social housing.

However, the Hanoi People's Committee requested the Department of Construction to invite the investor to announce that Hanoi has a plan to build 5 concentrated social housing areas, so there is no policy to build individual social housing in the inner city, with the reason that inner city land is prime land. Prime land must be sold to rich people, not used for social housing," Mr. Duong was upset.

The Chairman of Hoa Binh Company said frankly that in the minds of many people, social housing is for “second-class citizens”, but in reality, the buyers of social housing are mainly civil servants, public employees, and those working for the political system in the Central and Hanoi. “I also build commercial housing. I make it, whoever has money, I sell it all, including those with ‘criminal records’. Meanwhile, social housing is only sold to ‘decent people’. Most of them are civil servants, public employees because they don’t have money to buy commercial housing”.

“The social housing project is very humane and the investment is carried out in accordance with the law,” said Mr. Duong. The Hanoi People’s Committee could not reject it, but requested to consult with departments and branches on land procedures, and after 11 times of consultation, up to now, the social housing project has not been licensed.

Mr. Duong agreed with General Secretary To Lam's words and shared that Hanoi and other localities, because they do not have money, do not have funds to clear land, build infrastructure and organize bidding to select investors to build social housing. And also because there is no money, prime land must be sold, not used for social housing.

“Tsunami” hinders foreign investors

“Of the three biggest bottlenecks today, which are institutions, infrastructure and human resources, institutions are the bottleneck of bottlenecks,” Dr. Nguyen Anh Tuan, Permanent Vice President of VAFIE, echoed General Secretary To Lam’s words to assess the severity of the bottleneck. Meanwhile, Prof. Dr. Nguyen Mai, President of VAFIE, said that the National Assembly and the Government have made many efforts to perfect the institutions, but unfortunately, they have not met the needs of businesses and people.

Mr. Bruno Jaspaert, Chairman of the European Chamber of Commerce in Vietnam (Eurocham) summarized that Vietnam's legal system is built no differently than building a house without forgetting the foundation.

“To build a house that will last for generations, the first thing is to build a solid foundation. Having lived and worked in Vietnam for many years, I have observed that in recent years, Vietnam has built houses at a fast pace, but has forgotten the foundation,” the Eurocham Chairman said.

The foundation, as Mr. Bruno Jaspaert said, is the transparency of legal regulations. “Many regulations in legal documents have many different ways of understanding and explaining, but they are all the same in that the explanation is most beneficial to the state management agency. The problem is that when businesses ask, local officials and civil servants almost do not have enough expertise to understand, so they have to ask higher levels, leading to a lot of time wasted,” Mr. Bruno Jaspaert complained and said that he had 200-300 specific stories about this.

According to the Chairman of Eurocham, there is a huge “tsunami” that is hindering foreign enterprises, especially large, high-quality enterprises using source technology that Vietnam is encouraging. Many enterprises have to shift their investment to neighboring countries, because the Vietnamese legal system is a bottleneck preventing this capital flow. “For example, the Law on Environmental Protection has many obstacles because the decentralization and division of power between the central and local governments are not clear. When enterprises want to ask whether they are doing right or wrong, or want to consult a state management agency, they do not know which agency to ask,” Mr. Bruno Jaspaert cited.

Sharing the same view, Mr. Phan Van Quy, Chairman of the Pacific Group, gave an example of regulations that he did not know who to ask because he did not know which level to ask, such as regulations on approval and decision on investment policy.

“The Land Law stipulates that in many cases, the National Assembly and the Prime Minister must approve and decide on the investment policy. But it is not known whether the 'National Assembly and the Prime Minister' approve, or if the National Assembly or the Prime Minister simply approves the investment policy. Enterprises cannot understand which cases are under the authority of the National Assembly and which cases are under the authority of the Prime Minister. No one knows when asking,” Mr. Quy was upset.

Dr. Nguyen Anh Tuan said that the Resolution of the regular Government meeting in October 2024 identified that "improving institutions is the breakthrough of breakthroughs" and set out the task of "strongly innovating in the work of building and perfecting institutions and laws; urgently removing legal bottlenecks and bottlenecks to remove difficulties for production and business".

“The General Secretary’s assessment and the Government’s Resolution on institutional bottlenecks have cooled the hearts of domestic and foreign investors and businesses - those who have long had to ‘swallow their pride’ over the heavy losses caused by institutional bottlenecks, losing investment and business opportunities, wasting resources and reducing enthusiasm,” said Mr. Tuan, adding that institutional bottlenecks and delays and inconsistencies in handling investment procedures need to be resolved soon to increase the competitiveness of Vietnam’s investment environment.

Source: https://baodautu.vn/noi-long-cua-doanh-nghiep-ve-diem-nghen-the-che-d230562.html