The country’s 90 State-owned groups and corporations (SGCs) contributed 40 percent of the national GDP from 2006-08, but, inefficient management of capital and State assets has reduced their productive potential, a report stated.
According to the report concerning SGCs’ implementation of laws on the use of capital and State assets, the equity scale of most SGCs had been preserved and increased in recent years.
The report was presented by Chairman of the National Assembly’s Economic Committee Ha Van Hien.
There were only four SGCs with equity capital that exceeded 10 trillion VND (555 million USD) in 2006, but by the end of 2007 the number increased to six and then to seven in 2008.
SGCs’ revenues increased from about 523 trillion VND (29 billion USD) in 2006 to nearly 867 trillion VND (48 billion USD) in 2008, the report said.
It also indicated that SGCs’ production, with a total capital of 1,241 trillion VND (69 billion USD), has accounted for approximately 40 percent of the country’s industrial production, 50 percent of export turnover and nearly 30 percent of the total domestic revenue.
Hien stressed that SGCs had played a significant role in socio-economic development by helping generate jobs, alleviate poverty, ensure social welfare and security, increase living standards and motivate other economic sectors to develop together.
However, he said nearly half of the SGCs have operated with low efficiency and productivity, and that the seven major SGCs has owned a total debt of 287 trillion VND (16 billion USD) in 2008, which was an increase of 20.5 percent compared to the previous year.
In addition to weak capital management, hasty expansion in production of SGCs to other sectors is also a major cause of the shortcomings.
There are up to 34 groups and corporations investing in finance and credit, 18 in insurance and 34 in stock, he noted.
The report also indicated that the SGCs’ use of public assets and land has raised concerns to authorities.
The report showed that a total area of 367,000ha of land have been distributed to the SGCs nationwide. With respect to this number, 10 percent of the 11,600ha in HCM City have been misused.
Hien said a law concerning the use of State capital should be used to deal with this matter. Heavier administrative sanctions that would punish these SGCs are required, he said. The complete equitisation of State-owned enterprises by July 1 next year would also be necessary, he added.
Deputy Tran Du Lich from HCM City proposed to have a law on management of State capital.
Triet Sy Lau, a deputy from northern Cao Bang province, recommended establishing a debt trading market, which he said could resolve the SGCs’ debt situation.
Deputy Sung Chung from northern Lao Cai province said that administrative sanctions to punish SGCs’ leaders who have violated the law, need to be clarified.
Regarding the report, Minister of Finance Vu Van Ninh said the evaluation would need to be impartial, fully accounting for SGCs’ social role.
“SGCs have to restructure, remain productive and fulfil socio-economic tasks at the same time,” he said.
Also in regards to the report, deputy Duong Trung Quoc from southern Dong Nai province said that it would be a starting point for the country’s economic restructuring, which hopes to make Vietnam an industrial country by 2020.
Source: VNA
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