International donors and the private sector in Vietnam will scrutinize the restructuring of State-owned enterprises as the key topic of discussion between them and the Government at the Vietnam Business Forum (VBF) taking place in Hanoi on Tuesday.
This is the first time that the State sector reform has been officially put on the table for discussion at the VBF, a forum held twice every year before the dialogue between the Government and donors.
“We will discuss the State sector restructuring, look into the general picture of what the Government has done so far and what is the next step,” said Victoria Kwakwa, World Bank country director for Vietnam, at a press conference in Hanoi on Monday.
Besides, the forum will also consider experiences of other countries and suggestions to accelerate the restructuring of Vietnam, she added.
The State sector is large, and thus if this sector does not operate well, the whole economy cannot work efficiently with poor performance, said Kwakwa. “We are really concerned when reading reports on the State sector.”
Meanwhile, representatives of 14 business associations in Vietnam who will attend the forum today also care much about the reform of the State sector, according to Alain Cany, former chairman of the European Chamber of Commerce in Vietnam (EuroCham).
The State sector reform will be the main topic of the VBF. Recent weeks have heard news about wrongdoings of some State-owned enterprises, said Cany.
Vietnam has many large-scale State-owned enterprises, but such firms do not operate on the basis of competition. “This has aroused concerns for not only foreign firms but also local private ones,” he added.
Vietnam has regarded the State sector reform as one of the three major pillars of the economic restructuring. However, the restructuring scheme drafted by the Ministry of Finance has yet to be approved after nearly nine months.
The draft scheme mainly focuses on restructuring State-owned enterprises through the equitization. Nevertheless, the program of equitizing such enterprises has been slowed down considerably since 2008 due to the stock bubble burst and the macro-economy turning unstable.
In four years from 2008 to 2011, there were only 117 State-owned enterprises going public, which was the same as the number of equitized enterprises in 2007 alone.
During the 20-year equitization period until last year, less than 15% of assets at State-owned enterprises shifted into other forms of ownership, according to the National Assembly Economic Committee.
Meanwhile, there were 1,207 one-member limited liability companies and 1,900 other companies majority-held by the State until late 2010 among around 12,000 enterprises in 1991, according to last year’s report of the General Statistics Office.
Vietnam currently has 101 groups, corporations and two commercial banks with 100% State ownership. Among these enterprises, there are 12 State economic groups active in most of major fields of the economy.
The State-owned enterprises have now accounted for up to 70% of the overall investment in the economy, 50% of the State investment, 60% of the credit, 70% of the bad debts of commercial banks and 70% of the official development assistance (ODA), according to statistics of the Central Institute for Economic Management (CIEM).