PANO - The Asian Development Bank (ADB) Board of Directors yesterday approved a $630 million multi-tranche financing facility for the Vietnam State-owned-Enterprise Reform and Corporate Governance Facilitation Program. Accordingly, Vietnam will get up to $630 million in financial support from the ADB to carry out further reforms of state-owned enterprises (SOEs) making them more efficient, profitable and transparent in a bid to spur economic growth and open up opportunities for the private sector. "State-owned enterprise reform is critical to reducing the dominance of inefficient state production, promoting private sector development and enhancing economic growth in Viet Nam," said Pradeep Srivastava, Senior Regional Cooperation Specialist in ADB's Southeast Asia Department. ADB's new program will also provide training and other assistance to government institutions involved in the SOE reform process, such as the Debt and Asset Trading Corporation. The first tranche of $130 … [Read more...] about ADB supports Vietnam $630 million to reform large SOEs
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Economic committee petitions on SOE restructuring
State-owned enterprises (SOEs) should no longer be considered a tool to regulate the macro-economy, the Economic Committee stated in its recently submitted petition to the National Assembly. >> New manhunt for maritime leader Duong Chi Dung The tool to regulate and stabilize the macro-economy in the market economy should be monetary and fiscal policies, rather than SOEs, the committee said in the “Vietnamese Economy 2012: a strong start for economic restructuring” petition. “We have paid high prices for using the SOEs to stabilize prices,” it wrote. “The SOEs are under no pressure for competition, and thus have been operating with poor effectiveness. “Prices have resisted rising, then suddenly skyrocketed when the SOEs failed to control them, causing the “pricing shocks,” which increased the macro-economic volatility.” 3 dos and 4 don’ts Regarding the proposal for SOE restructuring, the Economic Committee said that … [Read more...] about Economic committee petitions on SOE restructuring
SOEs pledge to save VND13 trillion in costs
SOEs pledge to save VND13 trillion in costs By Tu Hoang - The Saigon Times Daily HCMC – Some 83 State-owned groups, corporations and four banks as of May 9 have registered to cut expenditures with a combined value of nearly VND13 trillion, but some experts have played down the significance of the figure. According to the Ministry of Finance, the 83 State-run conglomerates (SOEs) registered to save nearly VND12.5 trillion, including VND3 trillion in management cost and VND9.4 trillion in material and energy cost. Meanwhile, the big four banks – Vietcombank, VietinBank, Agribank and BIDV – pledged to save over VND730 billion in operational cost this year. The moves respond to Document 867/BTC-TCDN released by the ministry in January, which asks State-run firms to reduce 5-10% of production costs to help lower prices. The document also suggested enterprises to register detailed saving figures to administration units before March 31. The ministry has also sent a document … [Read more...] about SOEs pledge to save VND13 trillion in costs
A Look Into SOE Restructuring
The recent moves of the Government on State-owned enterprise (SOE) restructuring attract attention of even the private sector Pham Phu Ngoc Trai, chairman of Global Integration Business Consultants (GIBC), said the best way to restructure SOEs is flotation. He said when other economic sectors engage in SOEs, they aim at efficiency as “possession is nine-tenths of the law” and this is their commitment to share benefits, rather than just risks. However, the selection of outside investors requires consideration of not only the financial aspects but also the capability and management experience. Duong Ngoc Minh, general director of Hung Vuong Seafood Joint Stock Co., is an advocate of the scheme for selling the State stakes in enterprises. He said the State capital is now scattered in several inefficient businesses. Citing the example of an An Giang-based company, where he holds a dominant stake and the State capital is 8%, or one million shares, worth VND25 billion, Minh … [Read more...] about A Look Into SOE Restructuring
SOE profit debate heads in different directions
A draft decree on state-owned enterprises' finance management has triggered heated debate sentiments among relevant parties. Under a new draft decree on state capital investment and financial management at wholly state-owned enterprises (SOEs) currently being crafted by the Ministry of Finance (MoF), after paying corporate income tax and pooling capital into funds such as the risk hedge funds, SOEs would be obliged to hand half of the remaining profits to funds managed by the State Capital Investment Corporation (SCIC). The remainder can go towards SOEs' investment development fund, social welfare and bonus funds and the like. This means, instead of wholly state firms holding all profits as currently, half of the profits would go to state coffers. MoF's Corporate Finance Department deputy head Dang Quyet Tien assumed the proposal would help ensure impartiality between the state, enterprises and workers, while deterring capital intensive firms from putting money into risky … [Read more...] about SOE profit debate heads in different directions