Viet Nam should withdraw capital from State-owned enterprises (SOEs) in non-core sectors such as coffee, rubber and tourism to better manage public debt in the economic downturn, said Dr Vo Dai Luoc, former head of the Institute for World Economy and Politics.
HA NOI —
Luoc made this statement at the international workshop on restructuring the economy that wrapped up in Ha Noi yesterday.
He urged the Government to reduce the percentage of SOEs in GDP from current the 35 per cent to 15-20 per cent, a rate comparable to other economies.
Luoc said SOEs should stop non-core business activities, especially in restaurants, hotels and stock market sectors.
"The country should also develop private enterprises to replace SOEs in some areas," he added.
Experts participating in the event agreed that the public debt crisis in Europe would put the world's economy on a downward spiral this year.
They said Viet Nam would be hard pressed to promote trade with Europe since foreign direct investment from the area would be decreased this year.
Dr Nguyen Thang, vice director of the Institute of Social Sciences and Humanities, said restructuring should be implemented first at businesses that took advantage of financial mechanisms to reach a high debt ratio on ownership capital.
Thang said the restructuring process should be transparent and information about SOEs should be published, including the production situation, finances, business targets and profits according to standards for listed companies in stock market.
He said the Government needed to remove preferential treatment for SOEs regarding access to credit sources.
He added that SOEs would not extend their debts while the country would continue to open the market for monopoly sectors to create competition.
"The Government should restructure the electricity and petroleum industries to reduce prices and increase effectiveness." — VNS