09:49 | 01/10/2019 Finance - Banking
(VEN) - The fear of responsibility is one of the important reasons resulting in the deferred equitization of state-owned enterprises (SOEs).
According to the information presented at an August 22 seminar on equitization held by the Vietnam Government Portal, since 2016, SOE equitization and divestments have recorded positive changes. Data of the Steering Committee for Enterprise Innovation and Development show that in the past three years, the government has earned VND218.255 trillion from divestments, a 2.8-fold increase compared to the previous period.
Pham Duc Trung, head of the Enterprises’ Reform and Development Department under the Central Institute for Economic Management (CIEM), said Decree 126/2017/ND-CP and Decree 32/2018/ND-CP have institutionalized many guidelines to make SOE equitization stricter in line with international practices. The quality of equitization has been much higher than the previous period.
However, SOE equitization has remained sluggish, failing to reach the rate of progress directed by the prime minister. Pham Duc Trung attributed the sluggish pace of equitization to the fact that many localities have delayed the approval of land use schemes, particularly those presented by SOEs.
In total, Vietnam had planned to have 85 SOEs equitized in 2018. Of these, 21 SOEs which had previously been scheduled for 2017, were moved to the 2018 equitization list. In all, only 12 SOEs were equitized throughout 2018 and the equitization of the remaining firms was delayed until 2019 and beyond.
Nguyen Hong Long, deputy head of the Steering Committee for Enterprise Innovation and Development, said the sluggish pace of equitization was partly due to the issue of benefits. If mechanisms and policies are developed clearly and more specifically for government officials who are directors or board members of SOEs, they would feel more secure in advancing the equitization process.
According to Pham Duc Trung, many solutions and sanctions have been implemented to handle acts that hinder the equitization process, but the implementation was not sufficiently firm. He advised authorities to crack down on those hindering equitization, Trung said.
Dang Quyet Tien, director of the Corporate Finance Department under the Ministry of Finance, said coordination between agencies acting as the ownership representatives of state capital and localities has remained rocky. To accelerate the equitization process, the Ministry of Finance will devolve localities’ responsibility for coordinating with enterprises.
Dang Quyet Tien also said the Ministry of Natural Resources and Environment should devise regulations to accelerate the approval of land use schemes.
Some 35 out of 127 SOEs have been equitized to date, reaching 27.5 percent, while 88 out of 405 enterprises have
completed divestments, reaching 21.8 percent.