Ending regulatory abuse will give more space for innovation: expert

Vietnam needs to overcome regulatory abuse as the more laws we have, the greater the compliance costs and the narrower the space for innovation and creativity, writes Dr. Nguyen Si Dung, former vice chairman of the National Assembly Office and a senior expert in political science.

Institutional reform is a process of changing and improving systems to improve operational efficiency and meet the needs of the times and the community. It can be compared to a surgery to remove diseased parts and replace them with new, healthier and more modern ones.

In other words, institutional reform is a process of reviewing and restructuring rules, standards and activities of institutions so that they operate more effectively, dynamically and fairly. It aims to strengthen the institutional framework of societies by handling the following tasks.

First, strengthening the rule of law: Ensuring all institutions operate within the framework of the law, and that the law is applied fairly and equally to all.

Second, improving governance: Improving transparency, accountability and responsiveness of institutions to meet the needs of people and businesses. Developing sound institutional processes and procedures to ensure they operate effectively and dynamically.

Third, anti-corruption: Minimizing corruption and promoting ethical behavior in all institutions.

Fourth, ensuring equality and inclusion: Making institutions accessible and responsive to the needs of all groups in society, regardless of gender, race, ethnicity or socio-economic status.

Thus, institutional reform is an extremely huge task. We need to have not only political will, knowledge and skills, but also resources and time.

According to a 13th Party Congress resolution, the institutional reform that we need to prioritize is the reform of economic development institutions. Although the above-mentioned institutional reform tasks are intertwined and have an interactive impact on each other, improving governance is the task that needs the most attention.

To improve governance, we must first ensure transparency. Information about institutions' decision-making processes and results must be public and easily accessible. This is an important condition to build trust and promote public participation.

Secondly, we must encourage diverse participation of relevant parties, especially businesses, in policy planning and promulgation.

Thirdly, we must react flexibly and promptly. As circumstances and needs change, governance must also change accordingly.

Fourthly, we must ensure efficiency and dynamism. Institutions' processes and procedures must be improved so that they operate at minimal cost while still achieving desired results.

This includes cutting unnecessary and complicated administrative procedures to improve efficiency and reduce costs for people and businesses.

Fifthly, we must manage our performance. It is necessary to set out clear performance indicators and monitor regularly to identify and correct weaknesses and waste.

Sixthly, we must allocate resources including finance, human resources and resources effectively.

Looking back at 2023, we see that the results of institutional reforms related to the economy are significant.

According to a Government Office report, as of December 31, 2023, Vietnam had reduced and simplified 2,742 administrative procedures, equivalent to 25.2% of the total. Of which, 1,082 were administrative procedures at central level, and 1,660 at provincial and centrally run city level.

Below are some specific examples of reducing and simplifying administrative procedures in 2023:

Cutting 10 administrative procedures in the field of investment and business registration, such as procedures for granting investment licenses, investment registration certificates and business registration certificates.

Revoking 20 administrative procedures in the construction sector, such as construction permit procedures and planning permits.

Abolishing 50 administrative procedures in the land sector, such as procedures for granting certificates of land use rights and ownership of houses and other assets attached to land.

Thanks to reducing administrative procedures and promoting decentralization, Vietnam's business environment improved significantly in 2023. This is shown through some of the following important indicators:

Vietnam's Global Competitiveness Index (GCI) increased 11 places, from 67th position in 2022 to 56th position in 2023. The country's World Bank (WB) Doing Business Environment Index rose seven places, from 70th position in 2022 to 63rd position in 2023.

The World Economic Forum's (WEF) economic reform index of Vietnam advanced by two places, from 73rd position in 2022 to 71st position in 2023.

But the challenges are not small, including the overlap and duplication of functions between institutions; decentralization not meeting actual needs; and the markets, especially the real estate market and corporate bond market, still being bogged down by many problems.

The most serious and biggest issue today is the passing of work onto others and avoidance of responsibility by many officials and civil servants.

In our country's governance model, land is owned by the entire people, and regulated by the provisions of the Planning Law, Land Law, Environmental Protection Law, Construction Law, Fire Prevention and Fighting Law etc., so almost all production and business projects must be approved and licensed.

If officials and civil servants avoid work and shift responsibilities to others, everything will become congested. Businesses are actually wrestling to implement production and business projects right now.

The problem is that procedural costs, "under-the-table" costs, and opportunity costs have all been inflated, but work is more congested than before.

To overcome this challenge, on the one hand, it is necessary to raise the sense of responsibility of officials and civil servants, and to strictly discipline violators. On the other hand, it is also necessary to ensure their legal security.

To ensure legal security, it is necessary to tackle the overlap and conflicts of legal documents. Obviously, when laws overlap and conflict, officials and civil servants will commit violations no matter what they do, simply because compliance with one law will violate another law.

Clearly we need to improve the law-making process, first of all the technique of drafting legal documents. Currently, these documents are being drafted by many ministries and branches and mostly by people who are not trained in the techniques of drafting legal documents.

It is best that all legal documents are drafted by an entity with deep expertise in this work. Such an agency could be the Department of Legal Document Drafting under the Ministry of Justice.

Specialized ministries should only focus on research and policy development related to their fields. When their proposed policies are approved by the government, they will be transferred to the Legal Document Drafting Department to be converted into legal documents.

Then, not only will the quality of legal documents be improved, but overlaps and conflicts will also be overcome.

We also need to overcome regulatory abuse. We don't know when regulatory abuse first appeared, but every time we face any problem in life, we think that we must enact a law. However, the more laws, the greater the compliance costs and the narrower the space for innovation and creativity.

To do anything, you must comply with 1,001 strict provisions of the law. How can cadres and civil servants dare to think and act?

Ultimately, institutional reform is the most important strategic breakthrough. However, this is a long-term, difficult job. It is important that we set the right priorities and focus on handling the big challenges that I've just highlighted.