Vietnam haltingly pushes toward economic restructuring

• By Bich Diep | dtinews.vn | September 06, 2012 02:55 PM

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The Government will only keep five to seven key State-owned groups in a bid to create an even playing field for the private sector.

 

Vietnam pushes toward economic restructuring 

The Ministry of Construction proposed to halt a pilot programme for running Housing and Urban Development Holdings (HUD) and Vietnam Industrial Construction Group (VNIC) as corporations after over two years.

The head of the Government Office, Vu Duc Dam, said the Government is still evaluating the results of these cases.

He went on to say that the Government will only keep five to seven out of 11 State-owned groups, namely those that play important roles in social life such as petroleum corporation or telecommunication groups.

"Government responsibility for State-owned groups will actually increase, even as the number of groups decreases." he said, adding that, "In this way, the individuals responsible for any mismanagement will be clearer in the future."

Because the restructuring policy is still under review, the direction of other groups remains undecided.

A report issued by the NA's Economic Committee pointed out the shortcomings of State-owned groups, saying that they are obstacles to financial restructuring and prevent potential private sector investment in profitable markets.

According to the report, "This situation has led to unfairness in competition for smaller private enterprises and lack of development in certain economic sectors. Investment opportunities and exploitation of Vietnamese markets has been difficult for private enterprises. Because of their regulatory tools and virtual monopolies they stand in the way of private investment and cause corruption, fraud and investment in non-core businesses. At the same time, many private enterprises develop quickly, not by innovation, but by exploiting natural resources and a relatively cheap workforce, without respect to regulations and workers' rights."

The report recommended that State-owned groups only invest in areas which provide public service or can help repair defects in the economy. It also suggested that the Government gradually withdraw its role as business investors in the economy to create more varied and vibrant domestic commerce.

In general terms, the report said that any broad economic model should consider the private sector as the main engine for growth in order to create an even and fair playing field for business.