Professor Hoang Tran Hau, vice director of the Academy of Finance and a permanent member of the Steering Committee for Restructuring SOEs, speaks with Hai Quan (Customs) newspaper.
What's new in restructuring?
Once State corporations or economic groups submit all their plans, the implementation process can start. According to plan, by 2015, some activities in the restructuring process must be accomplished, such as finance, occupations and their restructuring, equitisation and capital withdrawal from areas outside a corporation's main areas of interest.
Restructuring has been happening for 10 years. It is not intended to demolish everything and build anew, but is a continuing process. Yet this time, the Government is determined to have it implemented in all SOEs, particularly in the 11 State economic groups and 90 corporations - affiliates to ministries and sectors.
What are the risks associated with restructuring?
The main risk can be an unwillingness for economic groups and corporations to engage in the process. In addition, there are the debts owed by these State corporations. In my opinion, this is the biggest challenge we are facing. If the bad debts cannot be handled properly, they will cause unforeseenable problems to the corporations, to credit institutions as well as the financial market.
Does restructuring receive much support from the national economic restructuring process?
I don't think that we should separate the SOEs restructuring from general economic restructuring. Restructuring SOEs is difficult because they are spread nation-wide and relate to many sectors and occupations.
Furthermore, if we don't do it properly it will affect the financial market, particularly the banking sector. As I have mentioned above, the most challenging job is financial restructuring, especially the restructuring of debts and investments by economic groups and corporations.
In Japan, in crisis years, they restructure SOEs and the banking system together.
Are these recommendations included in the proposal submitted to Government?
The Ministry of Finance has conducted a thorough study on SOE restructuring over the last 10 years. More recently, the Minister of Finance, Vuong Dinh Hue, attended an important dialogue in Tokyo arranged by Japan International Co-operation Agency (JICA) to learn from Japanese experience.
In the ministry's proposal, we introduced various solutions, including those to restructure State groups and corporation governance or the State's management monitoring system.
What support should SOEs receive from the Government's fund for to restructuring?
SOE restructuring is the job of the enterprises themselves. They have to use their own resources. There is no way that the State will pump capital directly to them to help out.
However, SOEs and corporations are now in charge of their own funds, so they can use this to help restructure. But they must first get approval from the authorities. To my understanding, that money is always under the management of the State Capital Investment Corporation.
In the future, their funds will be transferred to the Ministry of Finance. The fund and other financial tools will be used to help enterprises in the restructuring process.— VNS