Vietnam is grappling with inefficiencies as it works towards the equitisation of State-owned enterprises (SOEs).
Vietnam has carried out continual reforms over the past two decades, reducing the number of SOEs from more than 12,000 in the 1990’s to the current 5,600, only 800 of which are completely owned by the State.
However, the proportion of equitised funds at privatised firms is still limited, even less than 5 percent at some major groups.
Minister of Planning and Investment Bui Quang Vinh said since 95 percent of the stake in those instances are owned by the State, their operations and administration remain unchanged despite their privatisation.
Director of the Central Institute for Economic Management Nguyen Dinh Cung said the critical question is not the number of equitised SOEs but rather how to improve the management and use of the State capital at those firms as well as the efficiency of their administration, production, and business activities, he added.
Minister Vinh said the SOE privatisation will not be efficient unless the presence of shareholders is increased and they are capable of changing the business administration.
Many economists pointed to an excess of objectives set for SOEs as an obstacle to their performance. Meanwhile, almost all SOEs are operating in various fields and have complicated finances, demanding too much time to prepare and call for major investors.
To enhance equitisation, the Ministry of Finance plans to deploy an array of measures such as pushing SOE equitisation according to sectors regardless of their management agencies and turning enterprises unqualified for independent business into subsidiaries of economic groups or corporations.
Director of the Vietnam Institute for Economics Tran Dinh Thien underscored the necessity of adjusting equitisation targets and pace to focus on the ultimate goal of improving business performance, thus promoting the economy’s competitiveness and restructuring.
SOEs currently contribute 85 percent of Vietnam’s electricity and oil and gas output, 90 percent of telecommunication services, and 56 percent of financial and credit services.
The SOE equitisation is part of efforts of SOE restructuring under the economic restructuring scheme stated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan for 2011 to 2015. Public investment and the banking system are also undergoing restructuring.-VNA
Vietnam strives to improve SOE equitisation efficiency Related image(s)
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