National Assembly Chairman: No equitization at all costs

​Reminding the Ministry of Finance to pay attention not to equitize at all costs, National Assembly Chairwoman Nguyen Thi Kim Ngan cited the case of equitization of Vietnam Feature Film Studio, not knowing whether the new owner will make films or push artists out into the streets.

He also said that the artist is Chi Pheo - The Chairman expressed his dissatisfaction with the recent "typical" scandalous equitization.

With the Government's presentation on socio-economic and budget "cut off", most of the morning of October 12, the National Assembly Standing Committee focused on discussion.

Production and business of enterprises still face many difficulties. Illustrative photo

One result assessed by the Government as outstanding this year is that the GDP growth for the whole year is estimated at 6.7%, completing the set target.

Appreciating the Government's efforts, National Assembly Chairwoman Nguyen Thi Kim Ngan said it is necessary to clearly explain to the National Assembly why the budget revenue increase was only 2.3% while GDP growth was 6.7%.

Regarding budget revenue, all domestic revenue sources have decreased, investment capital disbursement is slow but growth is high, so where can we expect growth? I request that Mr. Dung (Minister of Planning and Investment Nguyen Chi Dung and Minister of Finance Dinh Tien Dung - PV) prepare to explain this - the National Assembly Chairman requested.

According to the National Assembly Chairman, potential risks in the economy still exist and have not decreased, such as prolonged budget deficit, leading to high public debt, and when revenue is not enough to cover expenditure, then borrowing is required. High deficit affects other factors of the economy such as creating pressure on interest rates and inflation. Although much has been said about the expenditure structure, it is still unreasonable because nearly 70% is for regular expenditure.

Bad debt in the banking system is still high, even though the National Assembly has issued a resolution to handle bad debt with many new regulations and mechanisms that even exceed current laws.

Potential risks in the field of equitization are also an issue of great concern to the National Assembly Chairman.

According to the Government's report, the Government has issued decisions to create a legal basis, policy mechanisms and a clear and transparent roadmap for the restructuring of state-owned enterprises, the equitization process and divestment of state capital in enterprises.

However, the progress of implementation is still slow compared to the requirements, the restructuring of state-owned enterprises is not substantial, and the operational efficiency of this enterprise sector has not been improved. Although the number of 100% state-owned enterprises has decreased, the state ownership ratio in equitized enterprises is still high.

Some specific information stated by the Government is that by the end of August 2017, 18 state-owned enterprises have been completed, the enterprise value has been announced and plans for the equitization of 12 state-owned enterprises are being developed, and the value of 14 state-owned enterprises is being determined. It is estimated that in 2017, 38/44 state-owned enterprises that must be equitized can be completed according to the plan.

Regarding divestment, only state capital in 26 enterprises was sold with a total book value of VND863.8 billion (equal to 95.1% compared to the same period in 2016), earning VND11,815.3 billion.

National Assembly Chairwoman Nguyen Thi Kim Ngan.

The viewpoint emphasized by the National Assembly Chairman is that it is not necessary to equitize at all costs, especially large enterprises with famous brands.

Following the example of Vietnam Feature Film Studio as mentioned at the beginning of the article, the National Assembly Chairman emphasized that the policy of equitization is correct, but it is necessary to pay attention to whether the new investor will continue to keep or erase the previous brand after equitization. Recently, the Government has sold at the highest price, so we need to pay attention to this - the National Assembly Chairman noted.

With just over two months left in 2017, the National Assembly Chairman suggested that the Government have a longer-term vision when issuing policies. Because some policies issued this year will certainly have an impact next year.

For example, in monetary policy, promoting credit growth has short-term effects, but without careful quality control, it will cause long-term risks to the economy. If credit does not go into production and domestic enterprises are not able to absorb it, the credit will flow into real estate, stocks and cause asset bubbles.

Emphasizing that the goal of macroeconomic stability must still be given top priority, the National Assembly Chairman said that it is acceptable to accept a slightly lower growth rate but solid stability is still better. Therefore, the Government needs to pay attention to policies to ensure the macro economy.

Regarding budget revenue and expenditure, it is clear that this year, after 10 years, the budget deficit reached 3.5% for the first time, but the National Assembly Chairman said that there is no optimism for next year's budget revenue. Because the Government has proposed amending a number of tax laws, but there is no policy that can create social consensus to increase revenue.

According to vneconomy