In its 2015 plan, Vietnam set the growth rate at 6.2 percent, inflation rate at 5 percent, budget deficit at 5 percent, and bad debts at 3 percent by the end of 2015. To attain that goal, Vietnam must mobilise most efficiently all resources, accelerate administrative reform and improve business environment to facilitate the people and businesses, especially private enterprises, to develop, continue to stabilise the macro-economy, enhance international integration, especially economic restructuring, transforming the growth model and increasing competitiveness.
Completing economic restructuring by the end of 2015
The National Assembly recently adopted the Resolution to basically complete the economic restructuring by the end of 2015 to ensure fast and sustainable development, and harmonisation between growth, macro-economic stability and social welfare.
Accordingly, the restructuring plan must be upgraded in its growth model, with specific objectives, road map and resources, combining restructuring with international economic integration, industrial-service restructuring and agricultural restructuring. The government should approve projects on sector and local restructuring projects by the end of Quarter II, 2015.
In addition, the government should implement the restructuring plan and upgrade the efficiency of the State mechanism by separating ownership, State representation and management. Supervision must be enhanced in financing, operation and leadership so as to increase the efficiency of State-owned enterprises (SOEs), equitisation of public utilities and private sector development.
The government should also restructure weak credit institutions, reduce bad debts to below 3 percent by late 2015, and ensure cross-ownership and cross-investment in compliance with the law. Meanwhile, administrative and financial reforms must be continued, to define the rights and obligations of each sector and level, initiative and responsibility of the heads of agencies and local authorities, enhancing discipline and efficiency of State management and public financing.
Investment opportunities by equitisation
Economic restructuring has both affected and promoted SOEs. Therefore, the review of SOE restructuring must be comprehensive, comprising equitisation and withdrawal of State capital, as well as investment, financing, management in accordance with market laws.
So far, the results of SOE restructuring are not as good as expected due to several shortfalls: delayed approval of restructuring plan, unclear information on enterprise activities, untimely policy, weak management, financial weakness, slow equitisation processes, etc.
Nevertheless, in 2014, there was a new surge in SOE equitisation, with the restructuring on basic principles of market economy (free competition, equality and price system based mainly on market supply-demand and competition). The government is more determined to accelerate SOE equitisation, regarding it as one of the three main tasks of economic restructuring. In two years (2014-2015), 532 SOEs must be equitised, 100 SOEs more than previous plan, so as to complete the SOE equitisation plan before 2016. With the slow process of SOE equitisation in previous years due to shortage of financial resources, the equitisation of 532 SOEs is truly challenging.
Notably, three major equitised/IPO enterprises this time are MobiFone, Vinalines and Vinacomin. They are all most promising for investments.
Therefore, with positive forecasts on growth and inflation rates in Vietnam, investors can maximize their investments in hundreds of equitised SOEs in 2015. For their part, equitised enterprises can also mobilise more capital, new technology, and raise productivity to increase their competitiveness.
Comprehensive restructuring promoted
Comprehensive SOE restructuring will contribute to the market economy restructuring. It requires time and cohesive solutions in both thinking and policy. In the present conditions, Vietnam must proceed with approved plan removing all obstacles and delay, applying Decision 37/2014/QD-TTg and market prices in the withdrawal of State capital. After 2015, there must be more appropriate criteria for SOEs, transforming all SOEs, groups and corporations into shared companies in the following 3-4 years. The State maintains 100 percent of shares only in SOEs related to national defence and security and those supplying public products and services.
In addition, Vietnam should apply market laws regarding SOEs, especially in prices, resource distribution, equal competition, transparency and market operation as concluded by the Party resolutions. State ownership management at ministries and provinces must be upgraded with highly professional and experienced staff, ensuring transparency and efficiency in accordance with Resolution 36/2014/QD-TTg.
In particular, to attract more investments, including from foreign investors, in the equitisation process, the government should increase equitised percentage, transactions equitised at 51 percent or higher to ensure mutual benefit for both investors and the government.
Dr Doan Duy Khuong
Chairman of ASEAN BAC Vietnam, Vice President of VCCI
Vietnamese
