Removing obstacles for transport businesses

Saturday, 2018-04-07 12:04:03
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Dr. Phan Duc Hieu, Deputy Director of Central Institute for Economic Management.
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NDO – The Ministry of Transport (MOT) is reviewing its business conditions, planning to amend and abolish more than 61% of the business conditions which have been hindering businesses. In an interview granted to Thoi Nay (Present Day), a publication of Nhan Dan newspaper, Dr. Phan Duc Hieu, Deputy Director of Central Institute for Economic Management (CIEM), said that the reform of procedures and reduction in business conditions at the MOT, as well as in other ministries and sectors, should be implemented in a stronger and more substantive manner.

Q: What do you think about the changes made by ministries and sectors in reforming business conditions and abolishing sub-licences? Have those efforts worked to remove the “true knots” in the spirit of facilitating and serving enterprises?

A: At present, excluding the Ministry of Industry and Trade (MOIT) which has abolished its 675 business conditions pursuant to the PM’s recently signed decree, other ministries are only in the process of reviews, while some ministries have yet to even take action. Thus, it will have to take at least from five or six months to one or two years to turn the results of the reviews into reality. In the current context, if we keep stagnating, we will miss or suffer the impacts, which are difficult to respond to, from the new development trends. On the other hand, the majority of the current business condition reviews only touch the top part of the story on the reforms and the abolition of business conditions, instead of the root, while many other criteria, such as the business conditions restricting competition and creation and interfering too deeply in businesses’ internal administration have yet to be abolished.

Q: Specifically, the MOT is currently reviewing business conditions under its management, towards abolishing and simplifying 352 out of the 570 conditions. What is your opinion on this?

A: As for the MOT, I highly appreciate its methods of implementation as the ministry has reviewed all of the business conditions within the sector in a comprehensive and relatively scientific manner. But in my opinion, the MOT should consider more drastic actions in cutting the business conditions that are not highly necessary.

The fact that many business conditions have been transformed into regulations governing transport operations, or that the responsibilities proposed by the ministry are simply moving from one status to another, not eliminating! For example, in the road sector, there are conditions stipulating that business units must have a suitable parking plan in order to ensure fire safety and explosion prevention; and that transport businesses must be equipped with computers and must have internet connection. These are all business conditions that could be considered for abolition rather than just stopping at the point of switching them.

Reforming procedures and reducing transport business conditions need to be accelerated in a more substantive fashion.

Q: Regarding the legal problem which is troubling the MOT in the management of transport connection services such as Grab. In order to promote the development of these services, what is your advice on the issue?

A: The development of science and technology has created many new business models, which poses a big legal challenge to state management agencies in harmoniously managing these models and promoting their development. Uber, Grab or similar services are the fruits of technological application. What’s the most important thing here is the need to see them as new business models; however, they target only a few sections in the business chain. Specifically, Grab and Uber only join in organising connection and part of the process of pricing, collecting money, and allocating money, while neglecting other steps in the traditional “taxi” operations. As a result, all previous regulations have become obsolete, both redundant and inadequate, requiring new regulatory frameworks for management.

To solve this problem, we need to approach it in both directions. Firstly, a new legal framework must be developed to limit the risks that the new paradigm causes to the law and create a fair business environment for firms. Secondly, it is necessary to eliminate unnecessary business regulations for “traditional taxis”, thus helping businesses to reduce costs and improve their competitiveness.

Q: Previously, the PM’s Decision No. 19/2000/QD-TTg on the abolition of licenses contrary to the Law on Enterprises, eliminated almost all of the business licences in the transport sector, but then completely restored all of them, even issuing many additional business conditions. In your opinion, how should we avoid repeating the above situation?

A: Controlling business conditions in the future is a huge problem without any effective solutions if the ministries and sectors themselves are not aware of this. In the meantime, what should be done is to call on the ministries to consider the reviews of business conditions as one of the priorities to be implemented annually. It best to maintain a permanent body in order to assist the ministers in controlling, examining and evaluating regulations that will be promulgated in the future. Next, the Ministry of Justice (which examines all legal documents before submitting them to the Government) must be an effective “gatekeeper”.

Thank you very much!

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