State capital and assets in state corporations and groups

(Baonghean) - In the Vietnamese economy, economic groups and state-owned corporations (SOEs) hold a particularly important position. They are one of the important tools for the state to regulate the macro-economy, are the focal points for implementing public service tasks, and solve many issues related to social security policies.

Headquarters of Vietnam Posts and Telecommunications Group. Photo: Internet

In the process of formation and development over the past time, economic groups and state-owned enterprises have made many contributions to the country's development. Most of the units have caught up with the market mechanism, grown and developed, accumulated and fulfilled the role of state-owned enterprises well. However, in addition, many units are still weak in organizing production and business management, operating at a loss, losing capital, many units have given rise to negative corruption, and serious loss of state capital and assets. This has not only negatively impacted economic development, created additional burdens to resolve the consequences of surplus labor, job loss, and created socio-economic instability, but also negatively affected the confidence of society and people in the cause of national reform and development.

Accumulate most of the capital, assets and state resources

According to the results of the State Audit (KTNN), in addition to the achievements and contributions, the management and use of State capital and assets of State-owned economic groups and corporations currently shows many limitations and weaknesses. Accordingly, although the number of State-owned enterprises is large, most of the State's capital, assets and resources are concentrated in State-owned economic groups and corporations. Concentration has improved competitiveness, facilitated management and operation, facilitated the implementation of State policies and major solutions for enterprises, but has the downside of also concentrating risks, losses and being difficult to control. The results of audits of units in recent times show that some of these enterprises have suffered losses, lost capital and left behind significant consequences for the economy as well as related fields.

Second, most of the units operating with high economic efficiency have the advantage of holding important resources such as resources, land or developing rapidly in some areas not related to material production such as banking, telecommunications, etc. Therefore, although supporting growth and development, they do not create a foundation for economic growth with internal strength and sustainability. The efficiency of production and business activities in recent years has tended to decrease significantly. If this trend is not taken into account in risk management and solutions are not considered, the risk of facing difficulties and collapse is inevitable.

Third, the risk and reality of State capital loss is quite large. The risks in State capital asset management have gradually been revealed and clearly manifested in many units. Some economic groups and State-owned corporations have a large number of member units with losses, capital loss, and difficult production and business activities. Some enterprises have had to carry out dissolution and bankruptcy procedures. The indicators for assessing the financial situation and financial status of most economic groups and State-owned corporations have little improvement, and some units have shown worse signs than in previous years. Indicators for debt payment capacity, financial autonomy, efficiency assessment and capital preservation, etc. all have limitations and declines. Some units with difficult financial situations and insolvency must be classified as subjects of special control. The debt of units is very large, depending on loans, and some units have great difficulty in debt payment.

Fourthly, although there have been many improvements, the risk management, corporate financial management, strategic management, market management, and human resource management of corporations and general companies still have many limitations. Although there are objective reasons that make it difficult to strengthen the management and administration of the units, the audit shows that most of the units have not paid due attention to comprehensive, long-term, scientific and effective management. These limitations greatly affect the effectiveness of the management and use of State capital and assets towards the growth and development goals of the economic groups and state corporations.

Fifth, the financial and accounting management of units through audits shows that there are still many shortcomings and deficiencies. Some units in corporations and general companies have not issued regulations on managing receivables to strengthen debt management; the parent companies of some economic groups and state-owned corporations have lent or entrusted loans to their subsidiaries incorrectly, without any guarantee of debt payment, leading to difficulty in debt collection. Inventory management at some economic groups and state-owned corporations is not strict in terms of import and export, norms, and losses; some units have not recorded and stored fixed asset records according to regulations. Many economic groups and state-owned corporations have not fully and promptly reflected their revenue and income. In 2011, the State Audit recommended increasing state budget revenue by 304 billion VND; in 2012, it recommended increasing state budget revenue by 206 billion VND; In 2013, it was proposed to increase state budget revenue by 1,656 billion VND. In 2014, it was determined that the tax payment to the state budget increased by 580 billion VND,...

The State Audit Office said that the reasons for the current situation of management and use of State capital and assets at economic groups and State corporations are, first of all, due to the internal management system of economic groups and State corporations not meeting the requirements for effective management and supervision of the use of resources assigned by the State. The process of organizing and restructuring State enterprises is still slow and prolonged. The situation of multi-sector investment, cross-investment and ownership among enterprises makes it difficult to inspect and supervise the use of State capital. In addition, there are consequences of economic and trade decline globally.

Separate the roles of owner and business operator

In order for the reform of SOE management to bring about practical, concrete and sustainable results, the State Audit Office has proposed a number of important recommendations. Firstly, it is necessary to organize inspections and assessments of the current state of SOEs in a comprehensive and comprehensive manner, in many aspects of management and operational administration to point out the advantages, strengths as well as shortcomings, limitations, difficulties and obstacles. From there, model the overall picture of SOEs to propose synchronous and long-term solutions, linked to the actual context of enterprises and the practical management conditions of the political and economic system of Vietnam in the form of a comprehensive and long-term development strategy. Based on the orientation of the strategy, the State is responsible for creating a unified and synchronous legal framework; enterprises operating in different fields of activity and types of enterprises are responsible for proactively developing and implementing plans, schemes,... specific and detailed as appropriate.

Second, it is necessary to promote the reform of enterprise management methods, limit administrative intervention, and hinder the production and business activities of enterprises, their autonomy and self-responsibility. Accordingly, the State only invests in enterprises that produce and supply essential products and services that other economic sectors do not participate in, and let the private sector do what it can do.

Third, to successfully implement the State-owned enterprise restructuring project, the State needs to have policies to thoroughly handle the old problems of enterprises. Currently, the problems of outstanding debt are a burden in handling finance for restructuring. In addition, the State-owned economic groups and corporations need to focus on proposing specific solutions to handle the problems of financial investment and capital contribution; risk management and prevention solutions to minimize damage and capital loss (for bad debts, ineffective investment projects, financial investment, capital contribution...) that have existed for many years.

Fourth, focus on training and building a team of business leaders to meet the development requirements and exercise the rights of representatives of State capital owners in enterprises. In necessary cases, it is necessary to establish a mechanism and promote the separation of the roles of owners and operators, thereby hiring a team of business leaders to promote effective governance and create development momentum through the mechanism of contractual responsibility.

Finally, it is necessary to strengthen inspection, examination and auditing to evaluate the results of implementing innovation in management and use of State capital assets at economic groups and corporations according to the criteria of effectiveness and efficiency (compliance with the law, achieving the set goals and ensuring high economic efficiency). Through inspection and auditing, to detect and propose adjustments to mechanisms and policies if there are any shortcomings in practical application; guide and support enterprises to resolve difficulties and problems; recommend solutions to limitations and shortcomings. At the same time, propose fair and objective rewards and sanctions to contribute to enhancing awareness of compliance with legal regulations as well as motivating those who directly implement the reform and innovation of State-owned enterprises' operations, thereby resolutely handling violations in management, especially management and use of State capital and assets at enterprises, supplementing and having sanctions to strictly handle violations of leaders of economic groups and corporations.

Red River