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