The Ho Chi Minh City authorities need to invoke drastic measures to restructure State-owned enterprises as the process faces cumbersome policies and poor corporate governance, experts have warned.

Nguyen Van Dien from the Political Academy said that the restructuring process of state-owned enterprises (SOEs) in the city required some drastic renewal.

Dien said, although it had been over ten years since the restructuring of SOEs by HCM City, the process remained sluggish due to difficulties in policies and corporate governance.

According to the HCM City Board for Business Management Renewal, after equitisation, SOEs witnessed positive development and growth. Many SOEs maintained and developed their strong brands such as Saigontourist, Ben Thanh Group, Satra, SJC and CNS.

Leading SOEs in the city acknowledged that they needed to rearrange their investment structure, disinvest capital from non-core businesses to further invest in their key business sectors.

They added that one of the keys to successfully restructuring SOEs was to train qualified human resources who are able to reach new positions.

According to the HCM City Institute for Development Studies, although the city had seen rapid growth in recent years the quality remained low. Therefore, restructuring of SOEs in the city was a pressing problem.

It said that a comparison of labour productivity last year of the regional countries showed that labour productivity in Indonesia, Malaysia, and Thailand stands at 4,539 USD, 16,076 USD and 6,651 USD per employee, respectively, while in Vietnam it is only 2,071 USD per employee per year. In HCM City alone it is 5,133 USD per employee per year.

To ensure economic growth, the city needed to increase the number of employees, creating an increasing pool of migrant workers. On the other hand, the use of capital resources, labour productivity and land fund face low investment efficiency, especially in the public investment sector.

To raise the efficiency of SOEs, advanced corporate governance was the key, according to Nguyen Minh Chau from the Ho Chi Minh National Academy of Politics and Public Administration. He said the individual responsibility of State employees in the effective use of State capital in SOEs should be clarified.

In an attempt to enhance the SOE's management capacity, suitable policies on wages and employment should be outlined clearly to encourage and attract talented people into corporate governance.

Pham Thi Hong Yen of the Party Central Committee's Economic Commission said that State incentives offering strong and potential businesses without discrimination were an important driving force to help spur development and competition in key business sectors regionally and globally.

Pham Chi Lan, an economist, emphasised that if the equitisation process was conducted comprehensively and drastically, it would create a transparent business environment thus providing fair competitive opportunities for all enterprises.-VNA