Last update 7/11/2012 10:03:00 AM (GMT+7)

Vietnam considers setting up super-ministry to supervise SOEs

VietNamNet Bridge – The proposal to set up a general department in charge of managing and supervising capital at state owned enterprises, which the Ministry of Finance (MOF) has made to the government, has raised controversy.

The head office of the oil and gas corporation in Hanoi
Economists believe that supervising the use of state’s capital at SOEs is a very important and urgent task for now, especially after a lot of problems have been found at big economic groups.

However, the model of such an institution in charge of managing and supervising SOEs suggested by MOF, has not been applauded by the economists. It’s still unclear about the apparatus of the institution. Meanwhile, in many cases, the key does not lie in the organization, but in the apparatus and the way the institution operates.

In 1997, a unit with the similar model and functions was set up, which takes responsibility for managing the supervising the state’s capital at SOEs. However, because of many reasons, the unit has changed its functions and tasks, becoming the advisory body to the ministry and the government in terms of corporate finance policies.

The State Capital Investment Corporation (SCIC) runs with a similar model as Singaporean Temasek Group, in charge of supervising the use of the state’s capital at SOEs.

SCIC has been managing the state’s capital at hundreds of SOEs which have been equitized. However, it still cannot reach out to big state owned conglomerates and big general corporations.

However, experts still can see big problems in the models which cannot ensure that SOEs focus their strength on implementing the key tasks assigned by the government to SOEs. This has been explained by the unclear differentiation between the state’s role as the management agency and as the business owner.

Besides, the quality of the workforce has also been cited as the big barrier to the implementation of the tasks assigned to them, since there are many big enterprises operating in different business fields.

It’s clear that managing and supervising the use of the state’s capital at SOEs is just one of the rights the state can take as the owner of the businesses. However, this plays a decisive role in the efficiency of the state economic sector

Meanwhile, the Ministry of Planning and Investment has been told to consider the model of an agency – a super-ministry which specializes in taking the rights of the state as the businesses’ owner. The super-ministry would not undertake the state management function.

The model of the Chinese committee management and monitoring of state property SASAC which is in charge of managing the state’s capital at all equitized enterprises in China, has been cited as a model for reference, because SASAC can solve the problems in the state management and the corporate management.

Chair of the government office Vu Duc Dam said at the press conference on July 3 that a ministry may be set up to take care for state owned economic groups is under consideration.

“Enterprises were given the self-determination in making decision to fulfill their business operation. The mechanism has brought both positive and negative effects. The negative effect is that enterprises have made investment in the business fields where they do not have deep knowledge, thus incurring loss,” Dam said.

He went on to say that some problems of the model can be foreseen. Especially, no one can say for sure if the ministry can have deep knowledge in all business fields. People believe that the Ministry of Transport would have best knowledge about transport, while the Ministry of Information and Communication would have the deepest knowledge in telecommunication.

Source: TBKTVN