Governance for Sustainable Growth

Vietnam has had considerable success with export-led economic growth in recent years. However, problems with governance and competitiveness represent potential challenges to continued growth and international integration. USAID supports Vietnam to strengthen the country’s legal and regulatory framework in order to promote investment, economic growth and rising incomes. Working directly with the Government of Vietnam (GVN), the private sector and other stakeholders, USAID supports Vietnam’s transition to a rules-based market economy more fully aligned to international markets and standards. This includes support for more transparent and participatory public policy processes related to economic governance and trade.

CREATING AN ENABLING BUSINESS ENVIRONMENT

Now in its fourteenth year, the Provincial Competitiveness Index (PCI) is a nationally and internationally recognized index ranking measuring the effectiveness of economic governance across Vietnam's 63 provinces. This robust national annual survey of 130,000 domestic and foreign invested companies provides policy-makers with reliable indicators and recommendations on how to improve local regulatory and institutional quality to support private sector development. Each year, provincial diagnostic workshops are held to promote public-private dialogue.

ENHANCING GOVERNANCE FOR TRADE FACILITATION

Over the past two decades, Vietnam has become one of the most open economies in the world, but its inefficient border procedures are preventing Vietnam from improving its trade competitiveness. To help Vietnam and its trading partners reduce the time and cost to trade, the five-year USAID Trade Facilitation Program is supporting the GVN to adopt and implement a risk management approach to customs to strengthen implementation of the World Trade Organization's Trade Facilitation Agreement. The USAID Trade Facilitation Program is working to streamline border clearance procedures, harmonize implementation of risk-based approaches between national and provincial level entities, train customs officers on risk management, and facilitate dialogue between customs officials and businesses.

STRENGTHENING LINKAGES FOR COMPETITIVENESS

USAID Linkages for Small and Medium Enterprises (LinkSME) aims to strengthen the supplier-buyer relationships between Vietnamese small and medium enterprises (SMEs) and multinationals located in Vietnam to help local firms participate in global value chains. USAID LinkSME will improve the business environment by lowering costs for foreign firms located in Vietnam to source locally while representing a huge opportunity to grow Vietnam’s SME sector and build its middle class, major consumers of American products. The project is also helping to improve Vietnam’s regional competitiveness, by making it a more attractive and predictable investment climate and supporting the Indo Pacific Strategy’s competitiveness pillar.

Last updated: April 11, 2019

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