Big SOEs organize luxurious ceremonies to announce their thrift plans

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VietStock FI English - 73 month(s) ago 6 readings

Over the last two weeks, Minister of Finance Vuong Dinh Hue has been “on the run all day,” because he is invited to a lot of ceremonies held by big state owned economic groups and general corporations, to announce their thrift plans.

Replying to the Ministry of Finance’s call to cut down expenses in the context of the current big difficulties, state owned enterprises (SOEs) all have committed to reduce the costs and practice thrifts. In order to make their thrift plans known to the public, and especially, to the public, they have to organize special meetings, where they gather high ranking officials to inform about their plans.

The ceremony on announcing the plan to cut down expenses and cut down investment in non-core business fields of the Vietnam Coal and Mineral Industries Group (Vinacoal) held on February 22, was really imposing. The guests at the ceremony were the leaders of many provinces and cities, the managers of enterprises, and local press agencies.

The ceremony was held with the aim of stating that “VInacoal will practice thrift this year.” However, all the visitors to the ceremony could see that VInacoal did not “practice thrift” on the day it announced the thrift plan. Every guest got a big gift when they left the ceremony.

The visitors could also see that many VIPs were invited to the ceremony from other provinces and cities, which would cost VInacoal a big sum of money for traveling alone.

Prior to that, other big cheeses like Bao Viet finance group, the Electricity of Vietnam, HUD, VInalines and Vinatex, all organized big ceremonies to announce the thrift plans.

Some of them organized the meetings right at their head offices, while others rent luxurious halls to make the ceremonies more impressive.

Leaders of the departments, agencies, institutes, the enterprise renovation committee and the government office were also invited to the ceremonies to witness the big groups announcing their thrift plans.

Minister of Finance Vuong Dinh Hue seemed to be the person who might feel most tired. Speaking at a ceremony, he said that he felt a little tired, but he was happy because big SOEs show their strong determination to practice thrift, and show the sense of shame.

The formalism?

However, Hue emphasized that enterprises do not need to follow each others to organize such ceremonies. Hue said that what enterprises should do is that the board of directors of enterprises should release a resolution for subsidiaries and units to follow, and then supervise the implementation of the solution.

The instruction by Hue shows that he could see the high cost and the waste of the ceremonies held by the SOEs.

Hue said that the Ministry of Finance is going to issue a finance monitoring mechanism to be applied to state owned conglomerates and general corporations, which highlights the consideration of the responsibility of institutions and individuals in the SOEs. No matter how they cut down expenses, they would be disciplined if their enterprises take loss for two consecutive years.

The message by the leader of the Ministry of Finance has reminded SOEs to reconsider their expenses or it gets too late.

The Vietnam Petroleum Import-Export Corporation (Petrolimex) has also organized a big ceremony to announce the plan to cut down expenses by 130 billion dong on February 23.

Meanwhile, the finance report of the group showed that in the first half of 2011, the enterprise spent 600 billion dong more than the estimates on production and business costs. Therefore, if Petrolimex can save 100 billion dong this year, the figure would just a “grain of salt in the open sea”.

Minister of Construction Trinh Dinh Dung, when attending the ceremony of HUD Group, frankly said that the thrift campaign needs to bring effects, i.e. the prices of houses need to decrease and become affordable to people.

Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management CIEM said that this is a good piece of news that SOEs launch noisy campaigns to announce their thrift plans, but people still need more time to see how the plans perform.

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