VietNamNet Bridge – State owned enterprises (SOEs) which have been heavily criticized for the ineffective operation, would be put under the management of a committee or a specific ministry instead of the governing ministries as currently.

The Ministry of Planning and Investment (MPI) has suggested to the government two SOE management models which it believes would help improve the enterprises’ business performance.

With the first scenario, a SOE management and supervision committee, belonging to the government would be set up. With the second one, a ministry would be established which would act as the representative of the real owner – the state – in economic groups, general corporations or the SOEs for public purposes. In other words, the ministry would take the job which is now the State Capital Investment Corporation’s (SCIC) job.

MPI said it leans towards the first option.

The biggest advantage of the solutions suggested by MPI is that the ministries, which are now both the state management agencies and the governing bodies of SOEs, in the future would work as the state management agencies only, while they would no more act as the state’s representatives at the enterprises.

Vu Dinh Anh, a well-known economist, also said that the existence of such a company which manages and supervises SOEs would remove the current unreasonable management mechanism.

At present, ministries both act as the state management agencies and the owners of SOEs, which means they are both the “arbitrators” in the playing field and the “players,” the “policy makers” and the “policy followers” at the same time.

The current mechanism leads to the discriminatory treatment among the enterprises. The ministries, as the government bodies, would set up the regulations which benefit the enterprises put under their control.

Nevertheless, Anh believes that a committee would not be enough to manager all the SOEs. The committee would not have the sufficient power and management ability to take the big job.

It’s necessary to re-define the role of SOEs in the national economy. If Vietnam insists that SOEs serve as the backbone of the national economy, then it would need a ministry that is powerful enough to assign tasks to them and give them power to implement the tasks. A committee, or a corporation like SCIC, would not be powerful enough.

Meanwhile, some economists still keep cautious when asked to make comments about the suggestion.

Le Dang Doanh, also a well-known economist, said he is not sure about the efficiency of such a committee or a ministry, but he can see clearly that the state’s apparatus would be made excessively large.

In fact, municipal and provincial authorities realized the problems of the current management mechanism a long time ago. Mayors of HCM City and Hanoi have recently have asked for the permission to set up the corporations to specialize in making investment with the state’s capital in enterprises, which belong to the cities’ people’s committees.

They believe that the corporations, not SCIC, would help speed up the restructuring of SOEs in the localities.

Relevant ministries and branches have not voiced their official viewpoints on the suggested solutions. However, a researcher of the Central Institute of Economic Management has warned that it would be not easy to implement the plan, because of the barriers to be installed by the ministries, which cannot seek profits from the enterprises any more.

K. Chi