New agency to oversee SOEs
(VNS) Director of the Department of Enterprise Reform and Development Bui Van Dung spoke to Tuoi Tre (Youth) newspaper about a new ministerial level agency created to manage State enterprises.
An important topic discussed in the recently concluded 6th plenum of the Party Central Committee was the importance of the ongoing restructuring of State owned enterprises (SoEs). What's your comment about these discussions?
Restructuring SOEs is always a tough issue facing many countries that switch from a centralised economy to a market economy. That process affects almost everybody in our society, including the state apparatus, enterprises, all types of people and other areas. However, the key objective of the drive to restructure SOEs is to improve their production efficiency.
It is a matter of fact that if SOEs want to hold their predominant role in the national economy, their operations must be in good shape and they must ensure high performance and high profits.
At the last conference, the Party Central Committee concluded that the number of SOEs will be reduced and only those operating in key economic sectors and important geographical positions will remain. In addition, these SOEs must complete their capital withdrawal from non-core businesses by 2015.
Addressing the conference, Party General Secretary Nguyen Phu Trong raised the idea of creating a ministerial level agency entrusted with State authorisation for the management of investment and capital of SOEs.
Does this mean there will be a ‘macro ministry' assigned to manage SOEs?
There are two models being practised in the world at present. In some Scandinavian countries, there is a focal point for managing enterprises operating nation-wide, regardless of what business lines they specialise in. Meanwhile in other countries, a specialised agency has been established to manage enterprises nation-wide.
Of course, each model has its own advantages and disadvantages. However, for our case, we want to create an agency that has the power of a ministry. So in my opinion, such a powerful agency will help us overcome the constraints of the two international models.
I'm confident that if such an agency is established, it will make a big change in our current administration system – a separation of the two functions of State administration and State capital and investment.
To make sure that agency will do its work properly, we need a special mechanism to carry out supervision in a transparent and accountable way.
When will the agency be established?
The Party Central Committee has to make a decision on this. The Government will then develop an action plan to put the idea into reality. To establish a new ministerial level agency, the procedures are very complicated, and include the revising of relevant legal documents, personnel, finances and other areas. The Government has assigned the Ministry of Planning and Investment to conduct research on several options and then select the best one. I think this special agency will be created between 2013-14.
Have you got any ideas on how to arrange SOEs that rely totally on capital from the State?
The first thing we have to do is to agree on a set of criteria to classify SOEs. In the past our SOEs were engaged in more than 60 trades. The number was then reduced to 19 trades. I think the number of different sectors they are involved in will be further reduced to focus only on key areas, including the defence sector, essential public services and basic industrial sectors.
In addition, all SOEs must complete their capital withdrawal from their non-core business by 2015 in a safe and sound manner. — VNS