VietNamNet Bridge - One of the aims of state-owned enterprise (SOE) reform is to streamline enterprises’ operations, but they continue to expand.

One case is Vinashin, the formerly well-known shipbuilding company, which has disappeared from the news bulletins and ministries’ reports. With only one decision in October 2013 from the Ministry of Transport, Vinashin, (Vietnam Shipbuilding Industry Group), a giant shipbuilder, was turned into SBIC, the Shipbuilding Industry Corporation, with a smaller operating scale. 

Vinashin turned smaller just as it had become larger 10 years ago, when the government decided that it needed to become an economic group, not just a corporation.

SBIC today, in reality, is nothing more than Vinashin in both concept and financial nature. 

SBIC now has eight subsidiaries, the shipbuilding yards which were once the key businesses of Vinashin.

By the end of 2014, the number of SBIC’s subsidiaries had decreased by 97, and the corporation still had 155 subsidiaries to undergo mandatory restructure.

SBIC’s chair Nguyen Ngoc Su said at a conference this year that the corporation’s financial restructuring is a heavy task and that it is not as easy as initially thought.

SBIC is not alone. Many other state-owned economic groups are also at a standstill in their restructuring process. A report from CIEM showed that state-owned economic groups’ scale continues to expand. Fifteen out of the 20 Vietnamese largest enterprises are SOEs.

The report also pointed out that SOEs are still dominant in many key business fields of the economy. 

They make 99 percent of total fertilizer output, exploit 97 percent of coal, and are responsible for 94 percent of electricity & gas output, 91 percent of the telecommunications sector and 88 percent of the insurance sector.

State-owned economic groups and general corporations by the end of 2013, had total assets of VND2,600 trillion, or 92 percent of the total assets of SOEs, according to a government report.

In 2001, Vietnam had 5,650 wholly owned SOEs with total capital of VND130 trillion. By 2013, the number of enterprises had fallen to below 1,000, but the capital had increased by 10 times.

Pham Viet Muon, former deputy head of the Steering Committee on Enterprise Renovation, who devoted himself to SOE reform for over 20 years, said the number of 100 percent SOEs would decrease, but their position and role in the national economy would remain the same.

Muon said it was difficult to sell just 20 percent of the massive VND1,300 trillion in the next five years. 

“Nothing will change with the state economic sector if SOEs are still considered the core force of the national economy,” he said.

TBKTSG