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Ministry starts to restructure
The restructuring of State-owned enterprises (SOEs) is one of the key projects assigned to the Ministry of Finance by the Government. Finance Minister Vuong Dinh Hue spoke with Viet Nam News Agency about the project.
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| Finance Minister Vuong Dinh Hue |
Could you tell us how is the project going?
The Government assigned the ministry to build a project on restructuring SOEs with a focus on State-owned groups and corporations, and another one on restructuring securities companies, the insurance market and the capital market in general. After co-operating with the Steering Committee for Enterprise Renewal and Development and collecting opinions from the relevant ministries and sectors, we are perfecting the project to submit to the Prime Minister. The project then will be discussed at the upcoming National Assembly session.
SOEs have experienced continuous losses in recent years. What are some of the solutions for the time ahead?
As of December, 2010, 12 State-owned groups and corporations incurred more than VND26.1 trillion (US$1.24 billion) in losses due to weak corporate governance capacities, the global economic downturn and their previous unresolved losses.
Official supervision of the management and use of State funds and assets has also been limited. Many businesses have small equity capitals, but they still raise capital from various sources which is sometimes invested haphazardly. That has resulted in high debt ratio and liquidity decreases.
So, top priority in the time ahead will be given to restructuring the SOEs with focus on groups and corporations. The Government is reviewing management models and operational efficiency, and looking at SOE business lines in order to approve an overall project to restructure SOEs. Based on this project, the Government will consider giving the green light to a specific proposal to restructure each State-owned group and corporation.
Besides stepping up the equitisation of SOEs, the Government also asked the enterprises to focus on their core business activities and withdraw capital from non-core activities no later than 2015.
Restructuring SOEs is not an easy task but we are determined to fulfil this hard task in an attempt to improve the performance and competitiveness of the domestic economy.
What should we do to effectively supervise SOE investment in non-core business activities?
We now face two main problems. One is to help SOEs fulfil their State tasks to regulate the macro economy and the second is to support SOEs in sharpening their competitiveness and ensuring their production efficiency.
The Government has issued orientations and specific regulations for the SOEs, under which the SOEs must only invest in their core business areas and others related to the primary business. Investment in prohibited sectors must be divested no later than 2015.
The Ministry of Finance has also submitted a draft decision to the Government on supervising and ensuring the financial transparency of SOEs. It will regulate the sufficient and specific criteria on providing information about the financial situation of enterprises.
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