Red Tape and Bureaucracy

Are we finally going to see a defining moment in the reduction of red tape and bureaucracy and time consuming reports and submissions to local authorities and other Government departments? Well it certainly is starting to look that way if recent recommendations are implemented.

According to the Central Institute of Management[1] there are 5,719 business conditions and requirements related to 243 conditional business fields regulated by 237 legal documents, including 3 ordinances, 66 laws and 162 decrees. A staggering number when in 1988 there was only a foreign investment law and a civil code to speak of.

Under a proposal from the Ministry of planning and Investment, following on instructions from the Prime Minister, there are over 2000 requirements and business conditions recommended for removal. The Prime Minister had ordered that all ministries and government agencies review and erase all unnecessary business conditions currently affecting enterprises and investors and adopt the OECD principles of “a competitive market”[2]

One of the areas will be the removal or reduction in sub-licenses which we have seen introduced often in conflict to changes in laws in compliance with various trade agreements.

There seems to have finally been an acceptance and understanding of the fact that the current regulatory environment erodes competitiveness and creates higher costs for business putting local companies at a disadvantage, especially on SME’s and of course hampering the Government’s efforts to improve the business environment.

This also heralds a move towards self-regulation by companies but with random inspections, however, for this to work successfully there will need to be clear and transparent guidelines.

The key challenge will be getting local authorities and provincial government departments to implement changes in accordance with the spirit of the law.