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 thecurrent 5,600, only 800 of which are completely owned by the State.
However, the proportion of equitised funds at privatised firms isstill limited, even less than 5 percent at some major groups.
Minister of Planning and Investment Bui Quang Vinh said since 95percent of the stake in those instances are owned by the State, theiroperations and administration remain unchanged despite theirprivatisation.
Director of the Central Institute forEconomic Management Nguyen Dinh Cung said the critical question is notthe number of equitised SOEs but rather how to improve the managementand use of the State capital at those firms as well as the efficiency oftheir administration, production, and business activities, he added.
Minister Vinh said the SOE privatisation will not beefficient unless the presence of shareholders is increased and they arecapable of changing the business administration.
Many economists pointed to an excess of objectives set for SOEs as anobstacle to their performance. Meanwhile, almost all SOEs are operatingin various fields and have complicated finances, demanding too much timeto prepare and call for major investors.
To enhanceequitisation, the Ministry of Finance plans to deploy an array ofmeasures such as pushing SOE equitisation according to sectorsregardless of their management agencies and turning enterprisesunqualified for independent business into subsidiaries of economicgroups or corporations.
Director of the VietnamInstitute for Economics Tran Dinh Thien underscored the necessity ofadjusting equitisation targets and pace to focus on the ultimate goal ofimproving business performance, thus promoting the economy’scompetitiveness and restructuring.
SOEs currentlycontribute 85 percent of Vietnam’s electricity and oil and gas output,90 percent of telecommunication services, and 56 percent of financialand credit services.
The SOE equitisation is part ofefforts of SOE restructuring under the economic restructuring schemestated in the National Assembly’s Resolution No.10/2011/QH13 on thesocio-economic development plan for 2011 to 2015. Public investment andthe banking system are also undergoing restructuring.-VNA
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 thecurrent 5,600, only 800 of which are completely owned by the State.
However, the proportion of equitised funds at privatised firms isstill limited, even less than 5 percent at some major groups.
Minister of Planning and Investment Bui Quang Vinh said since 95percent of the stake in those instances are owned by the State, theiroperations and administration remain unchanged despite theirprivatisation.
Director of the Central Institute forEconomic Management Nguyen Dinh Cung said the critical question is notthe number of equitised SOEs but rather how to improve the managementand use of the State capital at those firms as well as the efficiency oftheir administration, production, and business activities, he added.
Minister Vinh said the SOE privatisation will not beefficient unless the presence of shareholders is increased and they arecapable of changing the business administration.
Many economists pointed to an excess of objectives set for SOEs as anobstacle to their performance. Meanwhile, almost all SOEs are operatingin various fields and have complicated finances, demanding too much timeto prepare and call for major investors.
To enhanceequitisation, the Ministry of Finance plans to deploy an array ofmeasures such as pushing SOE equitisation according to sectorsregardless of their management agencies and turning enterprisesunqualified for independent business into subsidiaries of economicgroups or corporations.
Director of the VietnamInstitute for Economics Tran Dinh Thien underscored the necessity ofadjusting equitisation targets and pace to focus on the ultimate goal ofimproving business performance, thus promoting the economy’scompetitiveness and restructuring.
SOEs currentlycontribute 85 percent of Vietnam’s electricity and oil and gas output,90 percent of telecommunication services, and 56 percent of financialand credit services.
The SOE equitisation is part ofefforts of SOE restructuring under the economic restructuring schemestated in the National Assembly’s Resolution No.10/2011/QH13 on thesocio-economic development plan for 2011 to 2015. Public investment andthe banking system are also undergoing restructuring.-VNA
