|
Vietnam carries out SOE reshuffle to make them more effective
The most important goal of the state owned enterprise (SOE) reshuffle--is not to try to get as much money as possible, but to change the corporate governance mode.
The Ministry of Finance has informed that the government has approved the plan on restructuring state owned economic groups and general corporations, and it is going to release an action plan. SOE reshuffle is one of the three key tasks, together with the banking system and investment restructuring that needs to be implemented immediately in a strategy to restructure the national economy.
The restructuring process gets boisterous
Head of the Vietnam Economics Institute Tran Dinh Thien said that since late 2011, he has heard about the restructuring at any conferences and workshops. The restructuring has become the main topic at many discussions and forums, showing the high level of consensus on the issue.
However, Thien said how to implement the restructuring remains an unknown, because no enterprise has shown its detailed plan, and it’s not clear when they can have such plans.
Since mid-February, Minister of Finance Vuong Dinh Hue continuously attended the signing ceremony on committing to cut down expenses by 5-10 percent. The statements by state owned economic groups--to cut down expenses, has been hailed as an action that starts the restructuring process. More signing ceremonies would take place at big economic groups such as Petrolimex, the Electricity of Vietnam and Vinalines.
The restructuring process kicked off at the banking system in late 2011, when three small banks successfully merged into each other. The State Bank has stated that 3-8 more banks would be merged right in the first quarter of 2012. Meanwhile, the central bank has also revealed some details of the bank restructuring plan by categorizing the operational banks into four groups, which would receive the “quotas” for credit growth rates from zero to 17 percent in the first half of 2012.
Deputy Governor of the State Bank Nguyen Dong Tien has revealed that there are some weak banks which will not be allowed to have credit growth.
Equitizing SOEs – a step of restructuring
According to Nguyen Dinh Cung, Head of the SOE Renovation Committee said that the step that Vietnam can take now in the restructuring process is to equitize SOEs and reduce the state ownership ratios at enterprises.
Pham Viet Muon, Deputy Head of the Steering Committee on Enterprise Renovation and Development, said at a recent workshop that in the first quarter of 2012, Vietnam would have to complete the plan on restructuring 21 state owned general corporations. This spells that from now to the end of March, one corporation needs to be re-arranged in every two days.
This seems to be an impossible mission. With the current mechanism, it takes at least one year to complete the equitization of one SOE. It takes several years to audit an enterprise with the capital of over 500 billion dong.
Vietnam plans to equitize 600 SOEs by 2015 and retain 100 percent of the state invested capital in 700 other enterprises.
Cung has urged to carry out the equitization at the SOEs in which the State does not need to hold 100 percent of capital, and to withdraw capital from the equitized enterprises (there are some 400 such enterprises). State owned economic groups should be urged to withdraw capital from non-core business fields in order to gather their strength on the main business activities.
The equitization process slowed down because of the sharp falls of the stock prices. A lot of SOEs delay the equitization for fear that the low stock prices would cause loss to the State. However, Deputy Prime Minister Hoang Trung Hai has stressed that the main goal of the equitization is not to sell enterprises for high prices, but to change the corporate governance mode to make them operate more effectively.
vietnamnet
|
