Workers process food products at the Cautre Export Goods Processing Joint Stock Company in HCM City. (Photo: VNA)Hanoi (VNA) - NguyenDinh Cung, Director of the Central Institute for Economic Management (CIEM), urged accelerating state owned enterprises (SOEs) restructuring and equitisationsoon, calling it one of the three pillars of national economic restructuring,at a conference held on June 28 in Hanoi.
Cung emphasised that the key to effective restructuring of SOEs is better assetproductivity management, claiming that a one percentage point improvement inasset management would generate about 3-4 billion USD in return, and could pushthe growth rate of all SOEs up to 7 to 8 percent per annum.
“Asset and capital management within state enterprises has long been vague,rarely disclosed to the public. This is yet another low point of businessmanagement and shows an obvious lack of inspection in order to predict risksand weaknesses. Ultimately, this leads to loss and bankruptcy, all at too latea time to be salvaged,” said Cung.
Most importantly, no ministry, department or authority can be held responsiblefor these deficiencies, as there is no clear business model which defines theresponsibilities of each department.
According to CIEM, from 2011 to 2015, only eight SOEs announced bankruptcyafter a long period of loss and only one more went bankrupt from 2016 untilnow. The institute considers this number miniscule compared to the reality ofthe economy.
Another matter discussed at the conference was transferring SOEs to the StateCapital Investment Corporation (SCIC). So far, this has proved an effective andpromising model, though the implementation of the process is in need of muchimprovement, due to the large number of documents issued by administrativeauthorities to stop businesses being transferred to the SCIC.
CIEM reported that in 2015, of the 128 businesses’ initial public offerings,only 36 per cent of total shares were sold, while the state still held 81 percent of total charter capital in these businesses. The first five months of2017 only saw another 15 SOEs equitised.
Experts at the conference also agreed that the burden of national debts,accumulated through state firms’ outstanding loans, would continue to slowgrowth, necessitating the urgent restructuring of SOEs.
The conference concluded that to improve state owned businesses equitisation andrestructuring, comprehensive and strict legal regulations must be applied.-VNA
