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SOE restructuring needs transparency

Update: March, 03/2012 - 09:35

Chairman of the Small and Medium-Sized Enterprises Association, Dr Cao Si Kiem, spoke to Nong thon Ngay nay (Countryside Today) newspaper about a plan to cut State-owned enterprise spending.

Is the decision to cut costs the first step in the plan to restructure State-owned enterprises (SOEs)?

The restructuring of SOEs must go through three steps. The first one is the evaluation of their current status, their strengths and weaknesses. The second is to develop standards and models to ensure that restructured businesses operate normally and in a better position to compete in the market. And the last one is to apply actually restructuring measures. All these steps must be done in accordance with prescribed standards and procedures and in a transparent manner.

But, yes, this could be considered as a preparatory step in a long process of restructuring.

Do you think that a 5-10 per cent reducting in expenditures will contribute to the success of restructuring plans?

The decision is a right step in the right direction. Yet, it requires resolute determination from the enterprise management to turn these decisions into reality.

Do you think that SOEs will respond positively to the Government's plan?

I'm confident that they will implement the Government's plan. Of course, right now they will implement part of the plan only. The reason is simple. There are many preferential policies from which they benefit, including their offices, land and even staff. These forms of special treatment will be gradually phased out and a level playing field put in place for all enterprises, public, private or foreign.

Many experts have said that in the process of economic restructuring, it is vital to eliminate pressures from interest groups. How do you comment on that?

Yes, I agree! The kernel of the issue here is openness and transparency in the process. Once we have a correct evaluation of the current situation, we will come up with procedures on how to restructure the enterprises and measures to implement them. But another important point I want to mention here is the whole process must be transparent so that outsiders will be able to monitor what's happening. In other words, whenever a new policy is issued, there should be a system of incentives and sanctions.

Should restructured SOEs be monitored by a state capital investment corporation or a Government agency?

This is a very difficult and complex issue that will affect a number of groups in society. So, in my opinion, it is imperative to have an independent agency that would report directly to the Government and be subject to the supervision of the Party. — VNS

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