Prime Minister Urges Faster Privatisation

Prime Minister Urges Faster Privatisation

Vietnamese Prime Minister Phan Van Khai has called on ministries, concerned state agencies, local people’s committees and state-owned corporations to combine their efforts to help speed up the privatization of the country’s state-owned companies (SOEs) in an effort to bolster economic growth, according to recent instruction 04/2005/CT-TTg.

Ratios of outside investors’ stakes in privatised SOEs are still low and the number of firms listed on the Ho Chi Minh City Securities Trading Centre (HSTC), the country’s stock exchange is modest at 28 after more than four years in operation.

For large state corporations, almost all of their subsidiaries must be privatised and turned into the form of holding companies. This will help the parent corporations really hold the state ownership in the affiliates. After operating stably for certain period of time, the parent corporations will be comprehensively privatised.

Mr. Khai also asked the Ministry of Finance (MoF) to cooperate with other ministries and state bodies to solidify the instructions.

Vietnam started its privatization program in 1992 and so far the communist government has privatised about 2,400 SOEs and plans to privatise more than 1,500 between 2005 and 2008.

In the second quarter this year, the country will complete the privatization of three State-run corporations including the Trade and Construction Corporation, the Electronics and Informatics Corporation and the Vietnam Construction and Export-Import Corporation (Vinaconex).

• B.T