Promoting equitization of state-owned enterprises

2015 is the final year of the “Project on restructuring state-owned enterprises, focusing on economic groups and state-owned corporations in the period 2011-2015”. However, up to this point, there are still too many “unclear” tasks that the Ministry of Finance needs to resolve to keep up with the set progress.

According to the latest figures from the Steering Committee for Enterprise Innovation and Development, in 2014, the country reorganized 167 enterprises; of which 143 were equitized. This is still a low number compared to

with about 200 state-owned enterprises needing to be equitized in 2014 and compared with a total of 432 enterprises that had to be equitized in the 2014-2015 period.

According to Associate Professor Dr. Tran Dinh Thien, Director of the Vietnam Economic Institute, we have had strong determination and a good start, but the implementation process is very slow. The practical results achieved in each restructuring area are few and strategic restructuring changes have not taken place.

In 2014, many transport businesses performed effectively after restructuring.

Explaining this issue, Mr. Dang Quyet Tien, Deputy Director of the Department of Corporate Finance (Ministry of Finance) said that there are three main reasons slowing down the equitization process. Firstly, Vietnam has been affected by the economic crisis since 2011, so the stock market and capital attraction market have also been affected, leading to adverse impacts on the equitization process and initial public offering (IPO).

Some policy mechanisms have become outdated over time, while the 2011-2015 period saw many state-owned corporations and groups equitizing, so stronger policy mechanisms are needed.

In addition, when the market is still difficult, policy mechanisms have just begun to be completed, and leaders of ministries, branches, corporations and general companies are hesitant and not determined to implement equitization, this is also a resonant factor that slows down the equitization process.

According to Minister of Finance Dinh Tien Dung, to create a strong push in restructuring state-owned enterprises, there needs to be a real change, a qualitative change in the way of doing things. “The mechanism is enough, but why is it slow, how much responsibility and management thinking need to change more”, the head of the Finance sector wondered.

Associate Professor Dr. Tran Dinh Thien also said that to promote the equitization process of state-owned enterprises, it is necessary to determine the thinking about the role of the state economy and state-owned enterprises in the socialist-oriented market economy. State-owned enterprises only operate in areas that the private sector does not want to do. Even in this area, the Government can consider purchasing similar services from private sector suppliers.

“The most important point is that equitization must aim to improve the operational efficiency of enterprises in order to contribute to enhancing the quality of goods and services for the economy, thereby promoting the process of improving competitiveness and restructuring the economy in general,” Associate Professor, Dr. Tran Dinh Thien emphasized.

The Ministry of Finance also stated that in 2015, it will accelerate the restructuring of state-owned enterprises by industry and business sector, regardless of level or management agency. Enterprises that do not meet the conditions for independent business accounting will be transformed into dependent units of groups and corporations to create an equal competitive environment among enterprises of all economic sectors, improve efficiency and sustainable development.

At the same time, the Ministry requested ministries, ministerial-level agencies, People's Committees of provinces and centrally-run cities, economic groups and state-owned corporations to continue reviewing and supplementing the list of enterprises to be restructured and equitized according to the criteria and classification list of state-owned enterprises issued under Decision No. 37 to submit to the Prime Minister for consideration and approval.

Economic groups and state-owned corporations have specific plans to implement the contents of the approved restructuring project, plans for arrangement, equitization and divestment in 2015; report to the Owner any problems and difficulties in the implementation process for resolution.

On the other hand, to accelerate the restructuring process of state-owned enterprises, Deputy Prime Minister Vu Van Ninh also requested ministries, branches and localities to continue to improve mechanisms and policies on arrangement, innovation and improvement of corporate governance; focus on equitization and divestment of state capital in enterprises. At the same time, review and supplement enterprises that need to be equitized and divest of state capital, and submit them to the Prime Minister for approval for implementation.

According to Tintuc