Vietnam - Economic committee petitions on SOE restructuring

State-owned enterprises (SOEs) should no longer be considered a tool to regulate the macro-economy, the Economic Committee stated in its recently submitted petition to the National Assembly.

The tool to regulate and stabilize the macro-economy in the market economy should be monetary and fiscal policies, rather than SOEs, the committee said in the “Vietnamese Economy 2012: a strong start for economic restructuring” petition.

“We have paid high prices for using the SOEs to stabilize prices,” it wrote.

“The SOEs are under no pressure for competition, and thus have been operating with poor effectiveness.

“Prices have resisted rising, then suddenly skyrocketed when the SOEs failed to control them, causing the “pricing shocks,” which increased the macro-economic volatility.”

3 dos and 4 don’ts

Regarding the proposal for SOE restructuring, the Economic Committee said that state-run corporations and groups have been over-expanding into sectors that they are not strong in.

They also created a “close scheme,” in which the subsidiaries provide input products for their parent companies, eliminating the chance for businesses from the private sector to join in the economy’s manufacturing network.

The committee thus proposed that the state-run corporations be maintained under a “4 yes and 3 no” policy.

The four sectors in which SOEs are operating that should be maintained include: national defense and security; those creating essential goods for the economy; those that apply new technologies with high risks; and specific sectors such as toxics, cigarettes, and wine.

Meanwhile, the SOEs should not invest in three sectors including those used merely for reaping profits; those merely for reaping land rents; and those that create unequal competition with businesses in other sectors.

The petition also suggested that directors and CEOs of the SOEs resign when the corporations incur unexpected losses or fail to meet targets.

It also urged the privatization and divestment of the SOEs starting as soon as next year.

Tuoi Tre

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