Slow progress in SOE restructuring needs to be tackled

Slow progress in SOE restructuring needs to be tackled

Illustrative image (Source: VNA)

The restructuring of State-owned enterprises (SOEs) has seen slow progress since it was launched in 2011, leaving significant tasks to complete by the end of 2015.

According to the Steering Committee for Business Renovation and Development, 143 SOEs were equitised in 2014, well below the set target of 200 enterprises during the year.

432 SOEs were subjected to restructuring in the 2014-2015 period.

However, in Decision No. 37/2014/QD-TTg on June 18, 2014 regarding the criteria and lists for the classifications of SOEs, the Government raised the total number of SOEs requiring equitisation to 532.

Assistant Professor Dr. Tran Dinh Thien, Director of the Vietnam Institute of Economics, stated that initial restructuring was rapid, but has since slowed dramatically.

Dang Quyet Tien, Deputy Head of the Finance Ministry’s Department of Entrepreneurial Finance, believes three main reasons have contributed to the slow-down: impacts on Vietnam’s securities and capital markets from the economic crisis in 2011, out-of-date policies, and hesitation on the part of ministry leaders and business executives.

However, Finance Minister Dinh Tien Dung emphasised that an evolution in the programme implementation is needed to make a real breakthrough.

In order to speed up SOE restructuring, Assistant Professor Dr. Tran Dinh Thien maintains the necessity of raising awareness of the role of State-run businesses in Vietnam’s socialist-oriented market economy.

He also considers the most critical component towards a successful restructuring process to be enhancing the operational efficiency of the enterprises, in turn improving the quality of their products and services, increasing their competitiveness, and accelerating the economic restructuring in general.

According to the Finance Ministry, as part of efforts to generate a fair competition environment for all businesses, the ministry will expand SOE restructuring across sectors and business areas regardless of the management bodies and levels of the firms.

The ministry has also asked other ministries, localities and businesses to continue reviewing and supplementing the list of enterprises needing restructuring in accordance with the Government’s Decision No. 37/2014/QD-TTg, while developing specific measures to complete restructuring by 2015.-VNA

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