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CIEM hosts SOE restructuring workshop

Released at: 16:54, 23/09/2019

CIEM hosts SOE restructuring workshop

Photo: Minh Do

September 23 workshop looked at results to date and restructuring by 2030.

by Minh Do

Mindsets about the role of State-owned enterprises (SOEs) must change in the context of a market economy, Dr. Nguyen Dinh Cung, Director of the Australia-Vietnam Economic Reform (Aus4Reform) Program told the “Recommendations on Views and Methods of the Restructuring SOEs by 2030, the 2021-2025 Plan” workshop held by the Central Institute for Economic Management (CIEM) on September 23 in Hanoi. “SOEs should conduct business following Vietnam’s market economy, which means going global to improve their competitiveness,” he said.

CIEM released its research on “State Economy and Restructuring of SOEs: Evaluating Results for 2011-2020 and Proposing Solutions for 2021-2030” at the workshop. Deputy Director Phan Duc Hieu said that in preparation for building the ten-year Socio-Economic Development Strategy 2021-2030, including the restructuring of SOEs and the State economy, a review and evaluation need to be conducted on implementation during the 2011-2020 period, then directions, goals, and solutions put together for upcoming 2021-2030 period.

The Institute was assigned by the Ministry of Planning and Investment to carry out research for the preparation of the Socio-Economic Development Strategy 2021-2030 and the 2021-2025 Plan.

“The objectives and requirements of this research were to review and evaluate the results of implementing the role of the State economy and the restructuring of SOEs in 2011-2020 in a complete, comprehensive, objective and scientific way, while recommending perspectives, goals and solutions for the period of 2021-2030 associated with the process of modernizing the market economy,” Mr. Hieu said.

Mr. Pham Duc Trung, Chief of the Editorial Board at CIEM’s Enterprise Development and Reform Board, said that according to its report, the goal of restructuring SOEs is to determine the leading role of the State economic sector, mainly through equitization and divestment to move towards a more reasonable structure.

By 2010, the process of reorganizing, renewing, developing, and improving the efficiency of SOEs had achieved many positive results. They held a high ratio of all Vietnamese enterprises in terms of resources, controlling many sectors of the economy.

The ownership of 750 SOEs are to be converted through equitization from 2011-2020. From 2016 to June 2019, authorities transferred VND185 trillion ($8 billion) as a result of equitization and divestment of SOEs to the State budget, reaching 74 per cent of the plan. But SOEs also exhibited many shortcomings, such as lower efficiency of State capital investment than other economic sectors, budget revenue and job creation targets falling short, an inability to make known their leading and regulating role, with low spillover effects, and low turnover.

According to CIEM’s report, most SOEs will have a mixed ownership structure by 2030, with three to five listed on international stock markets and one to three being among the 500 largest enterprises in the world. From now to 2025, 90 per cent of the 103 enterprises with 100 per cent State capital will be transformed into joint stock companies.

Experts discussed the concept and role of the State economy and SOEs, analyzing the nature of SOE restructuring in the 2011-2020 period.

CIEM and experts also provided recommendations and opinions on the role of SOEs and SOE restructuring. In performing the role of the State economy in 2021-2030 it is necessary to focus on resources for building and completing socioeconomic infrastructure for the development of all economic sectors.

Dr. Cung said there needs to be separation between State assets and capital ownership, State management, and SOE management and the quick removal of the State ownership function of ministries and people’s committees’ role in State assets of SOEs. “We need to establish a specialized unit to act as a representative of SOEs,” he said.

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