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NA Deputy says loophole exists in SOE governance
Vu Viet Ngoan, Deputy Chair of the National Assembly’s Economics Committee, in the interview given to the press, said it is necessary to build up a law on public investment which not only stipulates the issues related to the state investment in projects and construction works, but also in enterprises.
Experts think that state owned economic groups and general corporations use too much of the society’s resources, but they do not use them effectively. The privileges given to state owned enterprises (SOEs) have created an unfair business environment, thus badly affecting the national economy. What do you think about that?
I think that at many SOEs the capital is not used efficiently. There are two important factors that rule SOEs, the ownership and governance. The origin of the capital does not decide the efficiency of using capital. This depends on the governance. Bad governance will lead to low efficiency.
There is a close relation between the ownership and the governance. I think that we have not paid enough attention to the governance so far.
Therefore, there is a more important issue to deal with for the time to come - the corporate governance. It is necessary to design a mechanism on corporate governance, the state’s supervision. We need to clarify the role of the state management and the role of the state ownership.
If we look back on the collapse of some big SOEs, we can see that we were very confused when dealing with the problemst. Do you think so?
Yes, I do. The resolutions of the 9th and 10th Communist Party Congresses said that it is necessary to separate state’s administrative management from the state’s ownership in SOEs. The 2005 Enterprise Law also stipulates that the two functions of the state must be separated. However, the implementation remains problematic.
What we need to do now is to admit that there are problems, find out the specific loopholes and the systematic loopholes in order to design a suitable solution. If necessary, we have to amend the laws and the policies in order to settle the problems.
What measures will we apply in the time to come in order to strengthen the supervision over the state’s capital use at SOEs?
In the report on the supervision of the capital use by economic groups and general corporations, the National Assembly says that it is necessary to build up a law to address the issue.
The Government has assigned relevant ministries to consider and suggest concrete solutions. If such a law is to be introduced, it needs to be designed in the way so as to avoid overlapping with other laws such as the Budget Law, Investment Law and other Government’s decrees.
I think that we need to build up a law on public investment which not only stipulates the issues related to the state’s investment in projects and construction works, but also in enterprises.
What are the specific loopholes, and what are systematic loopholes in the management of economic groups and general corporations?
The National Assembly’s resolution has mentioned six issues, while the reports have pointed out the systematic problems in all SOEs. Different suggestions, related to the legal framework, the policies, state management mechanism, and corporate governance, have been made.
As for the economic groups and general corporations which play an important role in the national economy and now face finance difficulties, we need to check and assess their operation. If necessary, we need to pump more capital into the businesses in order to heighten the operation capability.
After that, we will consider the responsibility of the leaders of the groups and corporations and consider restructuring assets.
Cao Nhat
vietnamet
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