Military Enterprises Sharply Growing in Line with National Defence

Military Enterprises Sharply Growing in Line with National Defence

On the occasion of 60^th founding day of Vietnam People's Army (December 22, 1944 - December 22, 2004), Vietnam Business Forum magazine talked with Major-general Ho Si Hau, Head of the Economic Department under the National Defence Ministry on the advantages, disadvantages and capacity of military enterprises in the involvement into production and business activities.

What do you think about the military businesses' economic performance?

At present, there are more than 140 military enterprises taking part in the economic environment and the statistics showed that less than 10 per cent of them made losses over the past year. The enterprises join in almost all business activities, especially in construction and seaport, aviation and telecommunications services. Some of the enterprises have produced satisfactory business results.

For example, the Military Telecommunications Company's fixed phone network has reached 35 cities and provinces while its mobile phone network covers 63 provinces and cities nationwide.

As regards seaport services, Saigon New Port is one of the companies with the most important container port in Vietnam, making up 40 per cent of this sector's market share. Additionally, the military businesses are very good at machinery-related matters.

Regarding investment co-operation, the military sector now attracts 36 foreign-invested projects, 76 per cent of them are working effectively. This is a high proportion compared with the common atmosphere, showing the efficiency of military enterprises in the economic environment.

In your opinion, what advantages and disadvantages do the military enterprises confront in economic activities? Accordingly, in what areas do they intend to increase activity?

Both military enterprises and normal economic businesses are obliged to follow the Government's regulations and policies. In spite of that, the former faces a little more difficulty due to their specific characteristics. A number of enterprises are located in  unfavourable locations with poor infrastructure. In addition, the military businesses face the shortage of market information and exercise limited self-control as management mechanism is ruled over by military factors.

Furthermore, we hardly have opportunities to call for foreign donors. Some of the international financial organizations namely World Bank and Asian Bank have officially announced that the military businesses are banned from the involvement in their Official Development Assistance (ODA) projects.

Nevertheless, military businesses also have good conditions that their cadres grow up in a military environment with strict discipline and readiness to surmount difficulties, which plays a vital part for their success in business.

Starting from the military's specific features, the enterprises in the near future will still head for two-purpose activities for the sake of the economy and national defence. The mechanical products are very useful for national defence and can become competitive trade articles only with some extra stages of work. Such enterprises offering services as Air Service Company, Saigon New Port, Viettel, and Aviation Construction Company have promoted their specific characteristics in production and business.

How do the policies affect the military businesses?

It is said that the military enterprises are given special support from the Government, which may cause an unfair competition. This is absolutely not true. The military businesses are not only forced to observe the Government's policies as other businesses do, but also governed by the military's special features. Particularly, we must be well-prepared to do our duty under all circumstances, even when our business activities are flourishing. Furthermore, the enterprises' activeness in business is limited since they must carry out tasks in accordance with the national defence's guidelines and orders.

How does the Ministry of Defence give assistance to the military businesses? In the coming time, what will the Economic Department do to boost these enterprises' production and business?

The Ministry of Defence has established the Trade Promotion Centre under the Economic Department. Over the past two years, the centre has fulfilled its duties under the State's key programme on trade promotion. In 2003, the military's trade promotion programme sent three groups of enterprises to Africa, SNG countries and China for market research. Two other groups have so far this year gone to Southeast Asia nations and China. The move helps the enterprises form a new view of integration into international market.

The Economic Department has also built up a website for all military enterprises. A large number of them have initially benefited from Internet access. Some have already signed contracts via the Internet.

We are mapping out a long-term plan for the businesses, especially speeding up the development of the mechanical sector. Concurrently, we also plan to direct the enterprises to participate in associations for the purposes of production and business expansion and more efficient integration.

• Reported by Nguyen Thoa