Deputy PM Instructs Speedier Restructuring of SOEs

Deputy PM Instructs Speedier Restructuring of SOEs

The ongoing process of restructuring State-owned enterprises (SOEs) in Vietnam should be accelerated in order to sharpen their competitiveness and consolidate their dominant role in national economic development, Deputy Prime Minister Nguyen Tan Dzung has demanded.

On a long article covering the whole page 2 of the Nhan Dan newspaper today, the senior government official gave clear directions on SOE renovation in the coming time as well as a detailed review of the process since 2001.

The permanent deputy PM, who is in charge of economic issues, said the government would reorganize more SOEs in various fields, including major corporations, in order to diversify the capital ownership.

The government will only retain those operating in the fields that serve national defense and provide public services, he said.

Deputy PM Dzung also asked ministries, sectors and localities nationwide to work harder on SOE reforms and submit their plans to the government soon, so as to comprehensively complete the SOE restructuring program across the country in the 2005-06 period.

Dzung also pledged to move forward with legislative tasks in order to facilitate the implementation of the program.

Under the program, by the end of 2006, the government of Vietnam will retain 1,800 SOEs and sell shares of 1,600 others to the public. Of the SOEs to be privatized, the government will hold a 51 per cent stake in 900 and a smaller stake in 700 others.

In the period, the government will also allow the establishment of 500 new joint stock firms, most of which will also hold a dominant stake.

The deputy PM reported that between 2001 and June this year, a total of 2,881 SOEs in the country have been reorganized. Of them, 1,826 went public, 245 were sold, 408 were merged into others, 238 were dissolved or went bankrupt, 28 were leased, 148 turned into non-production establishments or management agencies, and 62 turned into one-member liability companies.

Currently Vietnam has 2,983 existing SOEs that are operating in 39 important fields of the country’s economy. The figure includes 2,253 production bases, 440 enterprises serving national defense and providing public products and services, and 290 agricultural and forestry farms.

As at the end of 2004, the SOEs had combined capital of VND220 trillion ( US$14 billion), with their average capital reaching VND63.6 billion ( US$4 million), up from VND24 billion ( US$1.5 million) in 2001.

Last year, the SOEs contributed up to 40 per cent of Vietnam’s GDP, and paid VND81.7 trillion ( US$5.2 billion) to the State budget, or 50 per cent of the total State budget revenues. Nearly 90 per cent generated profits.

• The People