Administrative reform is a core value to enhance the effectiveness of state-owned enterprises operation

Scene of the conference

SOEs are important tools

At the press conference, Mr. Dang Quynh Tien - Director of Corporate Finance, Ministry of Finance shared the objectives of the conference that was evaluating the implementation of the Resolution of the 12^th National Congress of the Communist Party of Vietnam, Resolution No. 12-NQ/TW dated 3/6/2017 of the 5th Plenum of the 12^th Party Central Committee, and the Scheme on "Restructuring SOEs, focusing on economic groups, state corporations in the period 2016-2020" under the Decision No. 707/QD-TTg dated 25/5/2017 of the Prime Minister, thereby providing solutions to promote ministries, sectors and localities in accelerating, drastic and effective reform of State-owned enterprises (SOEs), implementing equitization, and withdrawing of state capital in enterprises.

Also, according to Mr. Tien, SOEs have confirmed that they are an important tool to ensure the effective implementation of macro stabilization policies, curbing inflation and responding to market fluctuations; to generate a large source of revenue to the state budget; contributing importantly in building and developing socio-economic infrastructure system and economic restructuring; Performing task of national defense, security and social security.

In addition, continuing to assert that equitization is still an important solution in reforming and restructuring SOEs. The results of equitization and withdrawing of capital have achieved a positive impact on the development of the stock market and at the same time improve the performance of enterprises after equitization. Most enterprises have produced and operated business effectively, paid to state budget and employees’ incomes have risen after equitization.

Although achieving positive results, according to representatives of the Ministry of Finance, it still has shortcomings, restrictions and slow progress. Answering the reporter's question about the cause, Mr. Tien said that: Besides the objective reasons such as complicated economic, political and commercial situation of the region and the world, the subjective reasons were still a main reason. In that: Some ministries, sectors, localities, enterprises have not implemented the plan seriously, not complied with the reporting regime; role, awareness and responsibility of the head of enterprise, the unit was not highly motivated and drastic; Some SOEs were slow to innovate their corporate administration in order to improve business efficiency. In addition, the equitization process of SOEs took too long dealing with financial, land and labor problems in the pre-equitization period, so it prolonged the implementation time.

Not worth the potential

Being asked by reporters to evaluate the "strength - weakness" of SOEs, Mr. Nguyen Hong Long, deputy director of the Steering Committee of Renovation and Business Development, said that: "Strengths or weaknesses must be assessed on the basis of many criteria and the perspective of the evaluator. For example, when talking about an enterprise, how much profit the company made must be mentioned, the capital growth and social work,...so that in order to consider whether the SOEs are strong or weak is very difficult.

However, Mr. Long asserted that the performance of SOEs after equitization is more active and effective. The statistical reports showed that the performance of SOEs after equitization was quite positive. In 2017, through the report of 294 enterprises with state capital, the total assets increased by 6%; Equity increased by 14%; Total revenue increased by 21%; Total earnings before interest & tax increased by 11% compared to the figures in 2016. In addition, SOEs also played an important role in performing the social policy or relief work,...those are the things that cannot be ignored.

Nonetheless, Mr. Long admitted that the efficiency of SOEs is increasing but compared to the basis and capacity, there was still a certain gap. Equitization, withdrawing of capital was just a method for improving the performance of enterprises with the main goal of helping businesses operate more effectively. In order to achieve effectiveness, the core was that the businesses have to change the administrative mechanism, thereby changing the mode of production and business operations, ensuring transparency and publicity.

Furthermore, to promote this work in the future, the Ministry of Finance will propose to the Prime Minister some basic solutions to continue promoting the renovation and raising the efficiency of SOEs.

It stressed requesting the ministries and sectors to urgently complete the legal system in order to serve for arrangement, equitization, restructure and improve the efficiency of production and business activities of State enterprises and SOEs. In addition, chief officers and heads of ministries in sectors and localities would be responsible for urging and implementing the criteria for classification of State enterprises, SOEs and list of state enterprises for classification in the periods 2016 - 2020 approved by the Prime Minister.

The Ministry of Finance also said that state enterprises under the equitization should urgently review the entire land fund being managed and used in order to develop project for land use in accordance with land legislation and submit to the provincial People's Committees to have opinions on the project and land price, so that the competent authorities could have a basis for approval before determining the value of equitized enterprises. Representatives of owners instructed representatives of state capital portions to urge enterprises which already equitized to strictly register their transactions and list them on the securities market in accordance with the provisions of law.

Particularly, to resolutely and definitely handle State enterprises with investment projects that are progressing slowly, operating losses and inefficient under the market mechanism; To intensify the examination, inspection, supervision and auditing in order to prevent loss of capital and state assets in the process of reorganization, equitization, withdrawing capital, management and use of state capital; periodically publicize information on equitization, withdrawing capital of State enterprises as a basis for monitoring and evaluating equitization progress, withdrawing capital and promptly removing difficulties and problems in the course of implementation.