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Management mechanism should be strengthened in State economic groups
Ha Van Hien, chairman of the National Assembly’s Economic Committee, spoke to Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) about management of State economic groups.
This is the first time the National Assembly has carried out a comprehensive inspection on how State capital and assets are used by State economic groups and corporations. What are the results?
We haven’t finished the data collection and analysis yet so we can’t give objective and adequate assessments on the use of State capital and assets yet. Initial results showed that most corporations have been operating well and profitably.
But State economic groups and corporations differ from one another. Some are making profits while others are ineffective and even losing money.
The inspectors have also divided State economic groups and corporations into groups in terms of business trade to make assessments on their operations. State economic groups and corporations will be examined as to whether their operations should receive State preferential treatments.
What do you think about the relationship between mother companies and their subsidiaries at State economic groups?
Most State economic groups were established from corporations and their names are rooted from their mother companies.
The team has gathered different ideas from provincial People’s Committees. We are in the process of revising pilot State economic groups.
Initial results showed that the relationship between mother companies and their subsidiaries was clear. Some mother companies do their own business and invest in their subsidiaries. There is always a representative at their subsidiaries.
Viet Nam has regulations on investment in subsidiaries. The issue is regulations should be specific on State economic groups and corporations’ operation mechanism, and duties of their representatives, so State capital and assets can be used effectively.
In your opinion, which business fields should State economic groups pay attention to?
I think they should pay attention to management. State economic groups and corporations have played an important role in implementing economic and social targets and confirming the key role of the State in the country’s economy.
However, regulations on management mechanism of State economic groups and corporations’ representatives should be clear in terms of their legal position, including the State Capital Investment Corporation.
So is this true to say that there is a considerable hole in management in this sector?
Responsibilities of ministries and provincial People’s Committees who are in charge of managing the groups and corporations should be regulated clearly and sensibly.
Recently, we talked about separating State management from State economic groups and corporations. In reality, the groups and corporations were established by the State.
State economic groups are set up under a Prime Minister’s decision, while ministries and People’s Committees decide the establishment of corporations.
Decisions on human resources and structures, therefore, are decided by the agencies. They are also capital owners of the groups and corporations.
Relations between the ministry in charge of managing the groups and corporations and other ministries should also be regulated specifically. The regulations will help connect business activities of State economic groups and corporations with the ministry.
Policies and regulations relating to a business’s value before equitation or financial policies have proved difficult to apply.
Authorities should also give consideration to State economic groups and corporations, management in business entities and relations between mother companies and their subsidiaries.
VietNamNet, VietNamNews
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