Establish a "super committee" managing capital of SOEs: Needs to be considered thoroughly

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It’s hard for the Super Committee to train competent staff officers to approve the plans of manufacturing, business in various sectors.

Commenting on this proposal, Mr. Dang Quyet Tien - Deputy Director of Enterprise Finance Department, the Ministry of Finance said: Resolutions of the National Assembly Session XII with the request to separate the state functions of management from the management functions of the agency owners, or the administrative functions of the companies.

Also, the Resolutions of the National Assembly and the Government of the socio-economic development plan in the period 2016-2020 are also directing the research of management agency of the State capital and property of enterprises in line with the new situation.

To implement the directions of the Party, National Assembly and the Government, the Ministry of Planning and Investment has proposed the establishment of the committee managing and supervising the State capital and SOEs.

However, regarding the appropriateness of the establishment of the super committee, Mr. Dang Quyet Tien frankly said that the Ministry of Planning and Investment will have to study thoroughly a number of specific issues if the Ministry wants to put the proposal into reality.

First, on the model of the super committee. According to Mr. Tien, the target of separating state management from the management of enterprise owners needs to be clarified. After being established, this committee will be a body of the Government. Although this committee does not promulgate any legal documents but it remains the function of state administration, advises the Government and has the responsibility to report to National Assembly. If the committee manage SOEs of central agencies, whether it will secure or not ? This is a question that need to be drafted to clarify.

Second, the policy of the Party, National Assembly and the Government is to establish a committee managing the State capital and assets in a unified way. However, the model in the proposal has not solved the problem because the operation is still decentralized.

The draft has only brought enterprises of central agencies and SOEs in the management of the committee, but local enterprises are still managed by local authorities. Thus, the management will be divided into 2 levels, which does not meet its objectives.

Third, on the executive of business production. The principle now is the representative body of owners must approve the plans of enterprises. 30 corporations, companies in the management of the super committee include many different industries such as coal, electricity, petroleum, textiles, etc. If conducting the management, the committee will have to approve the whole production and business plans of these 30 enterprises. At that time, the story of the staff capacity to approve the plan is also a problem to consider thoroughly.

Fourth, in the near future, SOEs will have to be reduced in accordance with Article 10 of Law on Management and Use of State Capital Invested in Production and Business at Enterprises.. The maximum remaining numbers should be about 200 businesses, of which more than 100 businesses in the area of ​​security and defence, agriculture, and forestry. And the others are public companies with specific characteristics which cannot be assigned to the private sectors to ensure safety as power transmission, flight control, navigator, etc.

Looking at the list of 30 enterprises in the project, it can be seen that the majority of them will be equitized and taken to SCIC in the future. Thus, by 2020, when the volume of SOEs will have been reduced a lot, will it be necessary to remain the operation of the super committee?

A representative in Enterprise Finance Department cited a practical experience of China. Previously, China has established a committee, but then the Government realized that the operation of this committee in a long time led to monopoly and stagnation. Therefore, after all, this committee was rearranged in the direction of separating the functions of all the company owners as the model of venture capital.

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"Because this is a draft, we should recognize the specific disadvantages to contribute to the draft of agencies for further improvement. In my opinion, the most important thing is to consider and choose a model which is consistent, suitable and feasible with the reality rather than a barrier. The model will contribute to promoting SOEs reform, thereby expanding the environment for the units and enterprises to join and have a chance to develop", Mr Tien said.