Stakeholders urge more autonomy for State-owned businesses

Stakeholders are calling for a new decision-making mechanism for State-owned enterprises to allow them to operate more independently and sustainably.

Stakeholders urge more autonomy for State-owned businesses -0
A PetroVietnam oil rig. PetroVietnam is a giant State-owned enterprise with assets of around US$40 billion. — Photo petrovietnam.petrotimes.vn

(VNS/VNA) - A representative of a State-owned enterprise (SOE) revealed that operationally SOEs do not run autonomously but from instructions from higher up.
Such a hands-on way of management has resulted in backlogs and delays, leading to a situation in which his enterprise delivered just 51% of the spending target set in the previous year.   
"State-own enterprises can do nothing more than follow instructions," said the representative. 
He also complained that the operational plan of his enterprise for 2021-2025 had yet to be approved by higher authorities. The delay has greatly hindered its effort to raise funds for future projects. 
Other SOEs share the representative's view that the multi-layered bureaucracy has been holding back their performance.
When SOEs plan to do something, they must submit it to higher authorities of many levels for approval. However, the authorities normally send them a document packed with legal phrases, implying their plan has been disapproved.
Ho Quang Trung, deputy director of the Department of Energy, Commission for the Management of State Capital at Enterprises (CMSC), admitted that such a bureaucratic problem had been around for quite a while.
"It takes only two months for Hoa Phat Group to make an environmental impact report, whereas it takes around two years for Vietnam Oil and Gas Group (PetroVietnam) to do the same thing," said Trung.
Nguyen Tu Anh, director general of the Department of General Economic Affairs, Central Party's Economic Commission, called for measures to boost SOEs' expenditure on investing activities.
He said SOEs' expenditure on investing activities rose by 13.1% in 2022, higher than the national average of 11.2% and 8.9% in the private sector. However, SOEs are using on their own capital to finance investing activities.
"State-owned enterprises must leverage other sources of capital to boost their investments further," said Anh.
It is no mean feat for SOEs to increase their financial leverage because capital-raising falls outside SOEs' authority. Bank loans are not a feasible option either, as banks are normally discouraged by the cumbersome loan-making process involving SOEs.
Bond-issuing is another option open to SOEs, but this source of funds has lessened in recent years. Total government bonds in 2022 stood at just 41.1% of those in 2021 and equalled around 24% of the figure in 2020. 
"If SOEs can pull off more capital from bond-issuing, they would have enough money to push ahead with their unfinished projects," added Anh. 
In the Government's regular meeting in January, Prime Minister Pham Minh Chinh assigned CMSC the task of streamlining SOEs to improve their performance in line with what was stated in the Economic Restructuring Plan for 2021-2025.
The PM also requested the commission to look into the obstacles holding back SOEs and make a report on the obstacles. The report will be submitted to the Government and be used in a governmental meeting about SOEs

Economy

Vietnam's potential promoted to Mexican businesses
Economy

Vietnam's potential promoted to Mexican businesses

A delegation from the Vietnamese Embassy in Mexico led by Ambassador-Designate Nguyen Van Hai has paid a working trip to Guanajuato state to explore opportunities for cooperation between Vietnam and Mexico, as well as between Vietnamese localities and Guanajuato. ​

Localities report progresses in IUU fishing combat
Economy

Localities report progresses in IUU fishing combat

Coastal localities nationwide have implemented practical and effective activities and specific measures, demonstrating their determination to join the nation’s efforts to have the “yellow card” that the European Commission (EC) has imposed on Vietnamese seafood regarding illegal, unreported, and unregulated (IUU) fishing lifted in 2024.

Da Nang Hi-Tech Park attracts 177-million-USD FDI project
Economy

Da Nang Hi-Tech Park attracts 177-million-USD FDI project

The Da Nang Hi-Tech Park continues to strengthen its position as a leading investment hub with the recent in-principle approval of a 177-million-USD project by Dentium Co., Ltd., from the Republic of Korea (RoK).This significant investment brings the total registered foreign direct investment (FDI) in the park to 875.2 million USD, spanning 13 projects.

UNGA President congratulates Vietnam on re-election to UNCITRAL
Economy

UNGA President congratulates Vietnam on re-election to UNCITRAL

Ambassador Dang Hoang Giang, Permanent Representative of Vietnam to the United Nations (UN), had a meeting in New York on November 21 with President of the 79th session of the UN General Assembly (UNGA) Philemon Yang who congratulated Vietnam on the country’s re-election to the UN Commission on International Trade Law (UNCITRAL) for the 2025-2031 term.