This deputy persists in his opinion because the state-owned economic sector is a very significant field, which has impacts on the economy and national assets.

In November 2009, the 12 NA performed the supreme supervision over the improvement of effect and effectiveness and implementation of policies and laws on managing, using state capital and assets at state-owned groups and corporations. At that time, deputy Lich spoke that the people have assigned the Government to hold over $30 billion of capital and 365,000 hectares of land.

“The State, in the status of State, is already managed by the Enterprise Law but the State, with the status of one who holds $30 billion to invest in business, needs to be managed by a specific law. Others countries have such laws and we must build this law as soon as possible,” deputy Lich said at an NA meeting in November 2009.

The NA then issued a resolution, which was approved by 100 percent of deputies, in which the NA assigned the Government to submit to the NA for consideration and amendment of related laws and to submit the bill on using state capital and assets in business.

Though the NA’s instruction is published in the form of a resolution, which is considered as an NA’s act, NA’s deputies have had to remind the government about this bill at NA’s meetings and other forums in the last two years.

Even the list of more than 100 bills that will be compiled in the NA’s 13th term does not have this bill while some bills which are not urgent at all, for example the Law for Writers, is included in the list.

Nguyen Huu Quang, permanent member of the NA’s Committee for Finance and Budget, confirmed the necessity to have such a law by citing the latest statistics on state-owned enterprises. The state assets and capital owned by state-owned enterprises is estimated at VND638 trillion ($30.4 billion) out of the total state assets of VND1.883 trillion ($89.6 billion).

Holding the assets that are equivalent to nearly a half of the social production capability, Quang stressed that this volume of assets must be managed by a law, not a decree.

The absence of the highest-level legal document to manage state assets and capital is one of the reasons that make state-owned enterprises’ low effects in production and business, Quang added.

A document compiled by the NA’s Committee for Economics cites the latest data of the General Statistic Office in 2011, which shows that around 12 percent of state-owned enterprises incurred losses while it is 25 percent for businesses in general. However, the average loss suffered by state-owned enterprises is 12 folds higher than non-state enterprises.

Speaking at the NA, deputy Quang also said that the state-owned economic sector’s profit this year is around VND150 trillion ($7.1 billion).

“Under the current regulations, at least 70 percent of the profit (over VND100,000 billion or $4.7 billion) must be used for reinvestment annually, equivalent to the government’s entire spending but we do not manage it. I think this is also a gap,” Quang worried.

Both Lich and Quang re-confirmed the urgent need of having such a law, especially when economic restructuring (with restructuring state-owned enterprises as one of the three key tasks) is a burning issue in Vietnam.

Quang said that the NA’s call and resolution are not enough to make state-owned enterprises to improve their business and production efficiency and to participate in the process of economic restructuring.

As an experience businessman, Quang made comparison: for other forms of businesses, the shareholders’ meeting set the annual dividend that the executive board must pay shareholders. Meanwhile, the state gives power and capital to state-owned enterprises but the state does not collect any coin from them and does not ask them to make certain profit a year.

Quang said that if the Decree on management of state capital investment and business is not upgraded into the law, Vietnam will “lose the chance to perform economic restructure.”

As one of several deputies who suggested having the plan on economic restructure in mid-12th NA, deputy Lich said that as of July 1, 2010, the Law on State-owned Enterprises was invalid, creating a gap in managing State-owned enterprises.

The existing Enterprise Law only fine-tunes the operation of enterprises, not the relations between the ownership (state) and enterprises and enterprise managers, nor the aim of using state capital.

With the Law on management of state capital investment and business, the NA will stipulate that all operations of state-owned groups and corporations must be reported to the NA and supervised by the NA.

“If this law is not built in the five years of this NA term, we will not have legal foundation to implement the restructure of state-owned enterprises,” Lich added.

In the closing meeting of the ongoing NA session on November 26, the NA will adopt the Resolution on the law and ordinance making program for the whole term.

This program may have the name of the Law on management of state capital investment and business. But it is also possible that deputies Quang and Lich’s proposal will be still a proposal.

Source: VietnamNet