After Resolution 68, the private sector was, for the first time, explicitly described as “one of the most important drivers” of the economy. Subsequently, Resolution 79 was issued, reaffirming the “leading role, pioneering function in shaping development, guiding and paving the way” of the state sector.

The most notable point of Resolution 79 is the shift in governance mindset: from “capital preservation” to accepting controlled risk; from project-based management to goal-based management; and from administrative intervention to governance aligned with market practices.

In the 2010–2015 period, investment capital from the state economic sector increased by 6.34 percent per year. However, in 2020–2024, that figure dropped to 2.6 percent per year.

The proportion of state sector’s investment capital in the total economy also decreased sharply, from 44 percent in 2010 to 27.6 percent in 2024. Specifically, the proportion of SOE investment capital in total public investment fell from 43.56 percent in 2010 to 34.43 percent in 2023.

Huynh Thanh Dien from Nguyen Tat Thanh University, citing the figures, noted that investment capital growth in the state sector in recent years has been significantly slower than in the non-state sector.

Not only decreasing in scale, the efficiency of capital use by SOEs is also a concerning issue. According to Dien, SOEs are typically large-scale enterprises, but the ICOR (Incremental Capital Output Ratio), reflecting capital use efficiency, is higher than that of the private and FDI sectors.

In 2023, the ICOR of the state sector was 6.19, while the private sector was 4.9 and the FDI sector was 4.67. This showed that to create one unit of growth, the state sector must spend a larger amount of capital, implying lower investment efficiency.

"Although SOEs are identified as holding the leading role in the economy, in reality, the investment level and operational efficiency of this sector are on a downward trend. SOEs operate in key business fields with stable demand and relatively certain profitability, yet their investment efficiency is markedly lower than that of the private and FDI sectors," he said.

The core cause of this paradox lies in the governance mechanism and investment regime for SOEs.

Under current orientations, SOEs must focus on key industries, essential public services, and defense-security tasks. SOEs are also forced to divest from many other fields according to policy requirements. This narrows the operating space for SOEs, leaving them without a legal basis to participate in highly effective new fields and making it difficult to seize business opportunities arising from market signals.

Meanwhile, the authority of owner representative agencies over SOEs remains overlapping and characterized by deep intervention. Although the law allows owner representatives to directly decide on investments under 50 percent of equity, many internal regulations require enterprises to seek opinions and report before making a decision. 

The appraisal and approval process is prolonged, and complex procedures slow down investment progress, increase costs, reduce capital efficiency, and even cause enterprises to miss market opportunities.

Another important cause is the issue of personnel and incentive mechanisms. The selection of owner representatives and SOE management teams has not yet truly followed market principles and remains heavily administrative.

Moreover, in many cases, officials are transferred from the administrative sector to enterprise management without fully meeting business governance requirements. Salary and bonus mechanisms are tightly regulated and less competitive compared with the private sector, making it difficult for SOEs to attract and retain high-quality talent.

In addition, according to Dien, the legal framework for handling risks in SOE investment and business activities lacks clarity. Business inherently involves risk, but if every capital loss is attributed to individual responsibility, it fosters a fear of mistakes and accountability, undermining the motivation to innovate and take initiative.

In reality, many SOEs have suffered prolonged losses, insolvency, and substantial interest expenses over many years, yet there remains no clear legal framework for comprehensive restructuring or bankruptcy of SOEs under market-based mechanisms.

Operating under modern market logic

In this context, Dien emphasized that the spirit of Resolution 79 on the development of the state economy, recently issued, is highly significant. However, to develop SOEs into a force capable of leading the market in line with the spirit of Resolution 79, the essential issue lies not merely in the requirements on growth rates or expansion of scale, but in comprehensive reform of the governance framework and operational mechanisms of SOEs in accordance with modern market logic.

Tran Chung