Needed: A roadmap for SOE restructuring

Slow progress

Vietnam had equitized 34 SOEs and two public non-business units by April 2016, according to the Steering Committee for Enterprise Innovation and Development. In the first five months of this year, competent authorities approved equitization plans of 37 enterprises including six corporations - Machines and Industrial Equipment Corporation, Vietnam Engine and Agricultural Machinery Corporation, Vietnam National Construction Consultants Corporation, Corporation 36, Vietnam Forest Corporation and Vietnam General Corporation of Agricultural Materials.

Capital withdrawal also achieved positive results. Viettel Group, State Capital Investment Corporation, Vietnam Northern Food Corporation and three localities have sold state capital with the book value of VND659 billion, earning VND2.255 trillion. In particular, state capital in some corporations has been more valuable compared to the book value.

Some 422 among 538 enterprises were equitized from 2011 to November 30, 2015, completing 78 percent of the plan. However, capital withdrawn from outside sectors saw slow progress. According to the Steering Committee for Enterprise Innovation and Development, the country withdrew VND9.924 trillion in the state capital from outside sectors (following the book value), earning VND15.004 trillion. In particular, capital withdrawn from real estate, insurance, securities, finance and banking reached VND4.418 trillion, earning VND4.956 trillion.

In addition, 250-280 enterprises are scheduled for equitization during the 2016-2020 period in order to withdraw more than VND15.678 trillion worth of the state capital in five key sectors. Agriculture and forestry companies will also have to equitize, including 237 enterprises in 43 provinces.

The equitization of SOEs and withdrawal of state capital remain slow, while state capital that needs to withdraw from real estate, insurance, securities, finance and banking remains huge, according to economists.

A specific roadmap for 2016-2020

Chairing the government’s regular meeting in early July 2016, Prime Minister Nguyen Xuan Phuc emphasized to accelerate the restructuring of SOEs, seeing it as an important political task and the priority of the government, ministries, departments and localities in 2016 and during the 2016-2020 period. The prime minister also requested ministries, departments, localities, groups and corporations to adopt the specific roadmap in order to boost the equitization of SOEs and withdrawal of state capital from outside sectors.

To complete the equitization and capital withdrawal under the roadmap, the government has provided specific directions, according to which the Ministry of Finance will continue to monitor and supervise the implementation of the restructuring plans.

Decrees on equitization such as Decree 59/2011/ND-CP, Decree 189/2013/ND-CP and Decree 116/2015/ND-CP will be drafted to be a joint decree in the coming time.

Ministries, departments and localities need to take drastic measures to complete the equitization and capital withdrawal of units that did not follow the plans in 2015 as well as develop projects and policies to renew management and improve SOEs performance.

The Ministry of Finance will manage and supervise the Support Fund for Enterprise Arrangement and Development to use revenues from the equitization of SOEs and withdrawal of state capital from the state’s key projects, while at the same time strengthening transparency and publicizing information about SOE performance, promoting inspection and supervision of groups and corporations, and urgently listing enterprises that have implemented the equitization and initial public offerings but have not reached the target.

The Steering Committee for Enterprise Innovation and Development asked ministries, departments, localities, groups and corporations to adopt the specific roadmap in order to accelerate the equitization of SOEs and withdrawal of the state capital from outside sectors and then report to the prime minister in June 2016.

Duy Minh