VietNamNet Bridge – Vietnam’s economy will see major changes because of new provisions of the amended Enterprise Law that will turn hundreds of state-owned enterprises (SOEs) into non-state enterprises.

Dr. Nguyen Dinh Cung, head of the Central Institute of Economics Management (CIEM), believes the new provision will have a positive impact on the national economy.

In the past, an enterprise was classified as an SOE if the state held more than 50 percent of chartered capital. SOEs had to shoulder many responsibilities and implement many politico-social tasks.

Now, with the new regulation that requires 100 percent ownership by the state for SOEs, many enterprises will no longer be SOEs, and therefore, the burden will be lifted from their shoulders.

A report shows that the state holds 100 percent of chartered capital in about 700 enterprises. In the future, when the state’s plan on selling a part of the state’s capital contribution in the enterprises is fulfilled, the figure is expected to fall to 300.

Vietnam Airlines, the national flag air carrier, for example, will no longer be an SOE when the equitization process is completed, even though the state, as a shareholder, will still hold 75 percent of the airline’s shares.

Vietcombank and VietinBank, the banks that played a very important role in helping the central bank implement its monetary policy, will also no longer be SOEs.

The Prime Minister several months ago released Decision No 14 on classifying SOEs, under which there would be four groups.

These include a group of enterprises in 16 special business fields, in which the State holds 100 percent of the chartered capital. In the other three groups, the state’s ownership ratio will be lower than 100 percent, and therefore, they will be not SOEs under the amended Enterprise Law.

Can enterprises continue to enjoying preferences once they are no longer state-owned?

Analysts believe the answer is “yes”. Vietnam Airlines, for example, will continue enjoying preferences from the state because of its important role in the national economy.

The analysts said big changes will be seen in the national economy because of this new amended law.

Statistics show that SOEs now use 70 percent of land, 70 percent of ODA (official development assistance), and 60 percent of bank loans. They also make up 70 percent of the financial system’s bad debts.

However, the figures will be much lower in the future as many enterprises will no longer be SOEs.

This will also affect negotiations in bilateral and multilateral agreements, as issues about the state economic sector are always important during negotiations.

Thanh Lich