Proposals on restructuring State-owned enterprises

	Part 2: Divesting and equitising EVN: difficulties due to participation of too many agencies
	Financial reforms, towards restructuring Vietnam's economy
	Part 1: Consequences from the delays equitisation and divestment of SOEs

Economists suggest changing the thinking of SOE equitisation. Photo: H.Diu

Specific goals

The socio-economic develop strategy for the 2011-2020 period has pointed out that the state economy plays a leading role and is an important force for the State to orient and regulate the economy, contributing to macro-economic stability. However, this force has not effectively presented its role and responsibility, even causing a great budget loss to solve problems and carry out the restructuring.

Thus, at a workshop on viewpoints and orientations for SOEs restructuring until 2030 and the plan for the 2021-2025 period, held by Central Institute for Economic Management (CIEM) on the morning of September 23rd in Hanoi, Assoc. Prof. Tran Dinh Thien, Director of CIEM said that the SOE restructuring in the past ten years continues, so we must realize problems to change the method of implementation.

“We made a mistake in letting equitisation take place for too long, while the concept of equitisation only means orientation. In fact, if we only sell one percent of shares, it also means equitisation. Though we can we exceed the planned number of equitized shares, why is ownership transfer not significant? The Aviation Corporation of Vietnam is one example, the State has sold its shares but now want to buy them. This will set a bad precedent,” said Thien.

Accordingly, he suggested that the concept of SOEs equitisation should be transformed into privatization, which aims to market more and sets out specific plans, identifies people in charge so that SOEs cannot report “better results” all the time.

Sharing the same view, PhD. Nguyen Dinh Cung, former Director of CIEM, said that in the current context, we should not consider SOEs as a leading economic force, but only require them to perform their functions in business. Therefore, it is necessary to assign to SOEs specific tasks that are high enough so that only talented people can do them, avoiding the situation that those who were born with a silver spoon in their mouth, become leaders of SOEs. In addition, he also proposed that the equitization must apply governance according to market principles.

Granting autonomy for SOEs

Talking about an un-equitized enterprise, Ta Ngoc Nam, Deputy Head of Planning and Strategy Unit, Mobifone Telecommunications Corporation, said that all employees in Mobifone are looking forward to implementing equitisation quickly to create a new working atmosphere and new directions. Because at present, the AVG share acquisition is affecting the evaluation of work results of the employees of Mobifone.

However, Nam also acknowledged that the implementation method of equitisation is "problematic" and not professional. Therefore, the corporation should establish a steering committee, invite international experts and consultants to support and the corporation only participates in building strategic direction of business development and pays attention to the employees' thoughts.

In addition, with the choice of strategic shareholders, Mobifone wants shareholders to be international telecommunication investors and long-term investors and should not be financial investors who have only invested a few years and then divest, as this will make the corporation unstable. Besides, after equitisation, the management agencies should apply corporate governance standards and business rankings and should not follow the "motif" that profit of next year is higher than the previous year.

Responding to the above issues, Nguyen Dinh Cung proposed to create an opportunity for SOEs having autonomy. It means that all decrees guiding state ownership must be abandoned, SOEs should be autonomous, and state agencies should not intervene in business activities of enterprises.

Deputy PM reviews SOEs equitisation, restructuring Deputy Prime Minister Vuong Dinh Hue chaired a meeting of the Steering Committee for Business Renovation and ...

"The Committee for State Capital Management at Enterprises has been set up, but it is like an enterprise behind the state management agency, making the people who implement the SOE restructuring unexcited. Therefore, this management need to be removed in order for the role of the Committee for State Capital Management at Enterprises to properly operate its function. These problems can be solved right away, regardless of thinking innovation or technical change,” said Cung.