Each Enterprise Needs Its Own Heading

 

There are about 1,500 state enterprises in Vietnam and a many hold significant economic force in the country. A large number of these enterprises operate in major sectors like petroleum, power, cement, iron and steel, and minerals. Such enterprises also contribute vast sums to the state budget compared to firms in other sectors, lawyer Tran Huu Huynh said.

 

The conversion of state firms has a significant impact on the whole economic structure. Regarding enterprise administration, certain difficulties continue, for example having not yet clearly identified public ownership, which makes it difficult to effectively fix the enterprise administration structure. Besides, the organization structure of state enterprises has not yet been able to take over the role of investor. In fact, after many years of converting different models, the mechanism of identifying the ownership of state enterprises has changed remarkably. Other issues like rearranging personnel structure and streamlining staff also face challenges when converting enterprises.    

From the legal perspective, this conversion has actively created a legal environment which is more open-minded and clearer for enterprises. July 1, 2010 was the deadline for all state enterprises to be converted, both domestic firms and foreign-invested ones. While this difference previously existed based on the origin of ownership, it has been canceled. All firms are obeying the common law.

 

This represents the consistent leadership view of the Vietnamese Party and State, affirming non-discrimination and giving the fairest legal conditions to all firms, following competitive market principles under international rules.

 

Besides, with this conversion, we see other active signals. For example, enterprises must take responsibility for all their activities, meaning that the direct intervention of state management agencies as well as protection policies over enterprises, like priority loans and debt deferment, have been limited. These changes force enterprises to raise their competitive capability and take responsibility for efficient production and business in order to exist and develop in the context of the market economy’s fierce competition.

 

In my opinion, for the block of state enterprises, the role of ownership needs to be improved in accordance with the state orientation. We should set up organizations, for example a ministry, a committee under the National Assembly or a general company which takes the unique liability of trading state capital. This means that the state would not intervene into enterprise’s business activities in any manner. In addition, it is necessary to separate social activities from business activities. In vital cases, state enterprises should take the major role and pioneer new business types which require high technology and huge competitive capability. They must be really core enterprises and contribute to increasing the value of business chains which firms in other sectors are able to carry out. In order to further raise the efficiency of state firms, general companies and groups, it is also necessary to enhance the efficiency of state enterprise administration. This is an important and decisive element which will help state firms improve, increasing transparency and competitiveness, and preventing corruption and waste.

 

In terms of the private enterprises, they need to overcome the limits of family-based business administration as well as short-term business strategies. Private firms also should plan to become well-known economic groups and to enter the global market. To realize these goals, apart from efforts of the community of private firms, the state needs to create a free and fair legal environment and end unfair discrimination in land, credit, human resources, investment opportunities and government purchasing.

 

Regarding foreign-invested firms, they need to be considered an integral and long-term element of the Vietnamese economy. Therefore, the state should not encourage short-term investment projects which would exploit Vietnam’s advantages of cheap labor and raw natural resources, or projects with weak social responsibility. Moreover, economic elements should be connected to create value chains and focus the contributions of the community of enterprises, particularly small and medium enterprises.  

 

VCCI has been a representative agency for the Vietnamese business community, contributing to developing, protecting and supporting enterprises and the country’s economic development. In detail, VCCI has joined in building Project 30 on reforming administrative procedures to reduce expenses and problems for firms. It has also advised the Government to build a system of clearer and more transparent laws. VCCI has helped to transfer many wishes and opinions of the business community to state authorities for the development of Vietnamese enterprises.