Vietnam Politburo Urges to Restructure Loss-making Groups
The Communist Party of Vietnam’s Politburo has called on ministries and agencies to restructure state-owned economic groups and corporations with ineffective or prolonged loss-making operations.
The Politburo made the appeal after reviewing the implementation of the central party’s resolution on state-owned enterprises (SOEs) rearrangement which shows that the competitiveness of SOEs remains low, failing to meet the increasing demand of the global economic integration.
The bureau has asked for speeding up reassessment of SOEs’ capital and asset value as well as the debt situation to help the firms to ease financial difficulties. It has also urged the government to tighten control over non-core business of SOEs.
The Politburo said the Vinashin giant shipbuilder, which faces huge debts totaling VND80 trillion (over $4 billion), is a typical example for ineffective operations of Vietnamese SOEs.
The government has given Vinashin too many priorities through loan guarantee, while loosing the management on it, leading to the firm’s squandering investments.
The National Assembly Standing Committee said in a report in November 2009 that up to 45% of total 91 state-owned corporation and groups had been operating ineffectively with ROE at below 10% due to their mass investment in non-core business such as finance, stock, investment funds and realty projects. (Young People)
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