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State-owned enterprises must curb overspending or go under

Update: March, 07/2012 - 08:59

Economic expert Bui Kien Thanh spoke with Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) about the restructuring of State-owned enterprises.

Is it necessary for State-owned enterprises to reduce their expenses?

When enterprises pledge to reduce their expenses, it means they will take responsibility for reviewing all of their expenses to eliminate unnecessary ones.

However, this is not relevant to the restructuring of State-owned enterprises. Instead, they should consider the Prime Minister's request that all enterprises, especially State-run groups, focus on their core business.

In my opinion, the Government should keep urging them to implement this as soon as possible.

Why should firms focus only on those fields in which they are expert?

This year, domestic enterprises have encountered difficulties mobilising capital, which makes it difficult for them to buy shares.

If State-owned enterprises wish to sell their shares to foreign investors, they must consider the potential effects on other economic sectors and domestic businesses in those fields. However, these cannot be taken into account when it comes to delays in capital withdrawal.

And it should be borne in mind that when the stock market runs down, it is more difficult to sell shares. This is when the Government and enterprises should discuss share prices.

Does the risk of losing State assets pose a major problem during the capital withdrawal process?

No. Each enterprise should hire an audit company to ensure there is transparency and objectivity in the process. Then, a Government agency must review the assessment.

Before auditing, enterprises should consult with experts about trade marks and land-use rights.

Is it reasonable when it comes to restructuring State-owned enterprises to farm out the work to three different agencies?

Restructuring of State-owned enterprises should be directly guided by the Prime Minister. If not, a deputy Prime Minister should take responsibility for the task.

It is also necessary for relevant authorities to fix deadlines for this process and report the results to the National Assembly. — VNS

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