People don't have the responsibility to cover for bad debts created by enterprises, economist Nguyen Minh Phong spoke to the Khoa Hoc &Doi song (Science and Life) newspaper.
Do you think Viet Nam should learn a lesson from South Korea when it comes to settling bad debts through socialisation?
The first thing I should say is that Viet Nam is completely different from South Korea. That's why we cannot consider the enterprises' bad debt the nation's bad debt. The nature of our bad debt is totally different from that of South Korea. Through my study of South Korea's economic development, I understand that their bad debt was caused by the economic crisis in Asia, not by the country's economy.
What happened in South Korea?
The Asian economic crisis occurred in 1998, starting in Thailand and expanding to the whole region, including South Korea. The world economy was also stagnating at that time. The Seoul government called upon the people to join hands to build their country by contributing their money and gold to the national coffers in order to increase the national budget and support enterprises to resume their production. That didn't mean that the people directly contributed money to enterprises.
So the nature of bad debt in our country is completely different?
Definitely. The South Korean contribution is similar to efforts launched by our Government in the past for the cause of national construction. It is totally different from the nature of our current bad debt situation.
Do you mean that the bad debt in our country is caused by enterprises?
There are various causes leading to bad debt in our country, including losses incurred by enterprises, investment in non-core businesses, poor management and cross ownership. The blame rests completely with enterprises, not the people. That's why we cannot ask the people to contribute their earnings to help settle these bad debts.
How do you respond to those who say that the Government should close down all enterprises burdened by bad debt?
In my opinion, we need to approach the bad debt problem from multiple angles. Not all bad debts are the same. Besides, during their prime time of success, the enterprises didn't share their wealth with the people; now that they are not doing well, they ask people to support them. This practice cannot be accepted.
What are the consequences of bad debt for our national economy?
Frankly speaking, I myself don't really understand the situation of bad debt in our country. The Government should conduct an inventory of the bad debt to find out what the exact total is and then find out what caused the situation. Only then can we find solutions for the problem.
Some people have compared the bad debt issue to a "blood clot." Do we have a prescription to cure that blood clot?
I think only enterprises themselves can solve their problems. If they can't, they should file for bankruptcy. For a long time, the phrase "collective error" was often used in Viet Nam to describe problems that could not be solved. No one took responsibility for these problems. It is high time for us to find out who is responsible for the current situation of bad debt, which is now a serious issue. In very serious cases, the culprit should be charged criminally.
Do you think there is a magic wand to solve the bad debt in our country?
As I have mentioned above, to solve the bad debt problem, we need an integrated plan with synchronous measures. The Government should take the lead, not enterprises or the people.
What should Viet Nam do to solve the bad debt issue?
Bad debts can be classified in different categories, so it depends on which category you are looking at. For example, for enterprises producing low quality products by using outdated technology, the only solution is to close their factories and dissolve. It's their own problem. No one can help them out. — VNS