(VOVworld)-Prime Minister Nguyen Xuan Phuc has emphasized that equitizing state-owned enterprises (SOEs) is an important task for 2017. With SOEs holding hundreds of billions of USD in assets and capital, faster equitization will change their governance for the better, reduce public debt, and help economic restructuring.
After 15 years of restructuring, the number of SOEs has dropped from 6,000 to more than 700 as of October 2016. Their business lines have also shrunk, from 60 to 19. But only 8% of SOE capital has been equitized.
Major tasks for SOE restructuring
The current snail’s pace of equitization is due to ineffective implementation, poor coordination between government agencies, and outdated policies.
“We have to create a strong momentum for equitization and place SOEs in a competitive environment. The state-owned sector should be smaller but stronger and more effective, while state capital in SOEs must be used more efficiently to reduce bad debt and public debt”, said Prime Minister Nguyen Xuan Phuc.
The Prime Minister noted that the state will gradually withdraw from areas where the private sector is doing well, but will continue to hold the lion’s share of essential industries like defense, electricity, food, and banking.
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PM Nguyen Xuan Phuc speaks at a conference on SOE equtization in Hanoi on December 6
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Implementation
Over the next 5 years, the government will define the areas the state will pull out of or continue to dominate. Deputy Finance Minister Tran Van Hieu said equitization must ensure the state’s ultimate interests: “A major goal of equitization is to follow market principles and secure transparency to minimize loss of state capital.”
To reach this goal, it’s crucial to get international and domestic consultants involved in the equitization process, and intensify inspection and audits. The government has vowed to deal strictly with inefficient SOEs and projects, tighten the scrutiny of SOE loans, and reduce government guarantees of new loans.