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SOE restructuring requires great efforts (19/02)
19/02/2013 - 18 Lượt xem
Low efficiency
The Ministry
of Planning and Investment said that although SOEs hold 70 percent of
all investment capital, 50 percent of state investment capital, 60
percent of credit at commercial banks and 70 percent of all Official
Development Assistance (ODA) capital, they had contributed only 37-38 percent of the GDP and created less than 40 percent of all jobs.
Apart from many preferences in terms of capital, SOEs have also received priorities in terms of land leases. The National Assembly Standing Committee said that 88 state-owned groups and corporations had leased and used 365,818ha of land by the end
of 2008. However, large amounts of land remain unused or used
improperly, while non-state businesses, particularly medium to small
sized firms and private businesses, lack space for production and trading purposes.
Associate Professor Dr. Nguyen Dang Nam from the Academy of Finance said that despite their many preferences and privileges, SOEs had not worked effectively, failing to match the level of the State's investment. To make VND1 in revenue, SOEs used VND2.2 in capital compared with VND1.2 for the private sector and VND1.3 for the foreign
invested sector. SOEs have also failed to play a good role in leading
socioeconomic development and acting as a major engine for economic restructuring and an important tool for stabilizing the macro economy and regulating the market demand and supply.
The Ministry of Finance attributed the shortcomings for the SOE sector to the slow pace of equitization (i.e. transformation into joint stock companies), unclear definition of state management and state ownership and problems for the existing mechanism on management and supervision of state ownership. SOEs have invested in many areas, rather than focusing on their core businesses. This is the reason why they
have not worked effectively. Many SOEs have suffered from low
managerial ability and have been slow in renewing business
administration to meet international standards. A number of SOEs have
even violated the State's regulations on business administration causing capital and property losses for the State.
Given this, it is urgent to restructure SOEs to transform them into a real driving force for economic development, a major material source and a tool for the State to control the economy, stabilize the macro economy and contribute to boosting socioeconomic development following the socialist direction set at the Sixth Central Party Plenum. This is one of three major tasks to be implemented during the economic restructuring to improve business efficiency of SOEs, to increase SOEs' role in leading the economy and to establish strong and competitive SOEs in the time of increasing economic integration.
To successfully restructure SOEs
2012 was set as a milestone for economic restructuring with SOE restructuring being one of three pillars. For this reason, the Government is set to continue this task in 2013 and future years.
However, Ms. Phan Thi Thuy Linh from the Government
Office said that to successfully restructure SOEs it is necessary to
underline SOEs' advantages and disadvantages to provide a basis for finding a new way and a new itinerary for SOE restructuring and taking actions to achieve the goal. SOE restructuring means not only rearranging and reorganizing SOEs as previously, but also renewing them, finding major reasons for increased or decreased values of SOEs, developing their potentials and overcoming their shortcomings. This is to improve business efficiency, to strengthen their role in leading the economy and to establish strong and competitive SOEs in the time of increasing integration.
World Bank Country Director for Vietnam Victoria Kwa said that economic restructuring including SOE restructuring is necessary as it would help Vietnam make the most of its human resources and stabilize the macro economy. However, to successfully restructure SOEs, the country needed strong political determination and specific actions.
The Republic
of Korea's Ambassador to Vietnam Ha Chan Hoo said that to successfully
restructure SOEs Vietnam had even to suffer "sacrifice" and "pain".
However, if the country overcomes them, it will achieve long-term and stable economic results.
Minister
of Finance Vuong Dinh Hue said that long-term results of successful SOE
restructuring would include increased efficiency and competitiveness of
SOEs, increased support for economic restructuring, a transformation of the growth
model from quantity to quality, and a contribution to solving major
economic shortcomings such as high inventories and bad debts.
With
high political determination and high unanimity Prime Minister Nguyen
Tan Dung adopted a project in July 2012, regarding SOE restructuring
focusing on state-owned groups and corporations. A full array of
comprehensive solutions will be in place to restructure SOEs focusing
on improving SOE management institutions in order for businesses
of all kinds to run in a general and fair legal environment. This would
include improving existing regulations on implementing state ownership
rights and obligations of SOEs, financial supervision and evaluation of
SOEs and partially-state-owned businesses, improving the state capital management model at businesses while drawing-up
a law on state capital management and use, and building capacity and
efficiency of state institutions on support of SOE structuring and
equitization (i.e. transformation from SOEs to joint stock companies).
It
is also important to classify SOEs to focus on major areas such as
national defense, major commodities and public services, major
industries and high and influencing technology. There is a need to adopt the plan for SOE
restructuring and renovation by 2015, make a list of SOEs with 100
percent, over 75 percent, 65-75 percent and 50-65 percent State capital
and others. As for 100 percent SOEs, the Government would build their capacity and strengthen management in order for them to complete their tasks. The remaining SOEs would be equitized following a proper itinerary.
SOE restructuring would be carried out in every sector and in a comprehensive manner regarding the organizational structure, management, human resources, business fields, the development strategy, investment, markets and products.
SOE restructuring would follow the market principle, and the State would withdraw its capital from non-core business areas and joint stock companies, which do not require the State's ruling shares.
The ownership of SOEs would also be clarified. In the short term it is needed to examine and modify decentralization and responsibilities of the Government, ministries and local authorities in owning SOEs, to clearly identify the rights
and responsibilities of organizations and individuals that would decide
key SOE personnel. Meanwhile, it is crucial to build capacity of
corporate finance management and supervision agencies in a step towards
State professional administration of corporate finance./.
Source: VEN
Source: VEN
