|
Experts urge to reduce number of SOEs
At a conference on a draft plan to restructure the state-owned enterprises held yesterday, experts said the number of the state-owned enterprises should be reduced because of their poor economic effectiveness.
At the conference, which was held by the Ministry of Finance, Doctor Nguyen Ngoc Tuyen, head of the Institute of Financial Economics, said the return on equity of the SOEs in the period between 2007 and 2009 was only 4.3 percent, while the figure for the foreign direct investment (FDI) sector was double that.
He said the restructuring should aim at reducing the number of SOEs in an effort to increase their economic effectiveness. “[The restructuring] should be conducted on a large scale for all 86 of the state-run firms,” he said. “We should ask the SOEs to end their involvement in the banking and finance sectors, amend certain incentive policies they are enjoying, and remove their monopoly in the power, coal and fuel sectors.”
Hoang Tran Hau, a member of the board that drafted the SOE restructuring plan, agreed that the economic effectiveness of the SOEs’ operation had slumped.
He cited statistics from the Ministry of Planning and Investment as saying that the SOEs are holding as much as 70 percent of the economy’s total capital, 60 percent of lending from commercial banks, and 70 percent of ODA loans, but their contribution to the GDP was only 38 percent.
He said many state-run enterprises lacked transparency in their operation, adding that some do not even have records of their actual profits or losses. “Some have operated with losses and the government has had to set aside a big sum to offset for them,” he said.
He said the SOEs had invested $7.3 billion, or 10 percent of GDP, into non-core businesses. “In just the last quarter of 2007 and the first of 2008, the state-run firms sunk as much as $1.4 billion in the real estate and securities sectors,” Hau said.
Professor Truong Moc Lam, former chairman of Bao Viet Insurance Corporation, said many SOEs had created a complex system of affiliates and subsidiaries under them.
For instance, he said, oil and gas company PetroVietnam set up a subsidiary working in the insurance sector, and that subsidiary then created another subsidiary to operate in the property sector. “They have just messed things up,” he said. “SOEs should be allowed to set up just one subsidiary.”
Doctor Nguyen Minh Phong said SOEs are accounting for 60 percent of loans and 70 percent of bad debts of the commercial banks.
Phong stated that SOEs currently account for 40 percent of GDP, while in other developed countries, the rate was only 5 to 20 percent. “Vietnam’s ratio should thus be reduced to these rates,” he suggested.
tuoitrenews
|
