VietNamNet Bridge – The
government of Vietnam has decided to restart the state owned enterprise (SOE)
process, even though it has anticipated big difficulties.
The Ministry of Finance has announced that 93 SOEs are
planning to be equitized this year, emphasizing that equitizing SOEs is one of
the great efforts made by the government to reshuffle the state owned economic
sector.
However, Jonathan Pincus, a senior economist of Fulbright
Economics Teaching Program, has warned that the SOE restructuring would hardy
succeed if it depends too much on equitization.
He said that in many cases, the equitized SOEs still do
not have to compete with others in the market and do not have to change the
corporate governance way, while they still live under the name of SOEs.
He has also warned that the equitization program would
face big difficulties as the stock market keeps falling down, while investors’
interest in securities investments has decreased.
Minister of Finance Vuong Dinh Hue once admitted that
Vietnam met with too many difficulties in the last few years.
Recently, when asked why the equitization process has
slowed down, Hue answered with a question: “Will you sell your assets at a low
price, if you are a business owner?”
In the four years of 2008-2011, only 117 SOEs were
equitized, which was equal to that in 2007 and much lower than the years
before.
In the last 20 years, the number of SOEs has been
decreasing significantly, from 12,000 to 1300 by the end of 2011.
Nguyen Van Giau, Chair of the National Assembly’s
Economics Committee, said that in the last 20 years of equitization, less than
15 percent of state ownership has been transferred to other owners.
The main reason that led to the deadlock of the program,
according to Giau, is the burst of the “securities bubble” in 2008 which has
made the market gloomy since then.
Moreover, most of the other SOEs in the list of
enterprises subject to equitization have medium and big operation scale, while
it is more complicated to deal with big enterprises, especially in assessing
enterprises and settling interest conflicts among involved parties.
The government of Vietnam once vowed to fulfill the SOE
equitization process prior to 2010, but it’s clear that it has failed to
fulfill the plan.
The Ministry of Finance, after collecting the opinions
from four ministries, nine economic groups, 10 general corporations and 57
localities, has announced that 367 SOEs would go equitized.
However, the ministry’s report does not clarify how many
SOEs would be equitized in the first half of the year, and how much of the
total capital of 93 SOEs to be equitized this year is.
The recent moves by the government towards the SOE
restructuring have caught the special attention from private businesses.
Pham Phu Ngoc Trai, President of GIBC, said that the best
way for SOE reshuffle is equitizing them. He said that once other economic
sectors join in businesses’ activities, they aim to make profit, and the
capital contribution should be seen as the profit sharing, not only risk
sharing.
General Director of the Hung Vuong Seafood Company Duong
Ngoc Minh has been applauding the idea of reselling the state’s capital in
enterprises. The state’s capital has been scattered in many unprofitable enterprises.
In an enterprise in An Giang province, where Minh holds
the controlling stakes, the State has 8 percent of capital with 1 million
shares which have the market price of 25 billion dong.
“With such a modest capital contribution, the state does
not have the decisive voice in the enterprise’s operation. It does not receive
big profits every year with few stocks, while the capital would be lost, if the
enterprise takes loss,” he said, stressing that the best solution in this case
is the state transfers the 8 percent of stakes to get money.
Source: TBKTSG
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