State enterprises go main core

Economist Tran Du Lich

A trend to divest State capital from non-core business has taken root among State-owned corporations. A Viet Nam News Agency reporter talked with economist Tran Du Lich to review the divestment of State capital on the sidelines of the second session of the 13th National Assembly.

Is deciding to divest capital from State-owned corporations' (SoEs) non-core business appropriate at this time?

I think that the State's withdrawal of capital from SoEs to invest in their core industries is essential. We have to clarify our purpose in establishing SoEs in the first place especially in sectors that do not attract private investors. It has to be made clear what the State's role is in regards to each corporation.

What are the main governmental tasks in terms of each State-owned group and corporation?

After clarifying tasks set out by the Government we will take internal resources into account. Over a long period, the equitisation process has gathered finance and human resources into one with the State investing in the industries necessary for industrialisation purposes. Then we have to discuss capital gathering, divesting and raising. However, to restructure a loss-making enterprise such as the Viet Nam National Shipbuilding Group (Vinashin), we had to set up a steering committee, with a Deputy Prime Minister in charge of reorganisation. We have been unable to restructure all SoEs however. To restructure a system of groups or corporations, we need a specified roadmap.

I think that, on the current stock market, listed share prices lower than their actual value should be considered in terms of disinvestment.

In your opinion, what groups or corporations can implement capital divestment?

First we should focus on key State-run corporations and groups involved in industries such as post and telecommunications, coal, minerals and holdings, taking each of their subsidiaries into account while each corporation conducts its own strategic plan. For example, the mechanical engineering industry must have a roadmap on how to help develop the country's support industry.

Apart from divesting capital from non-core business, how else could SoEs be restructured?

It is important to specify core business for each group or corporation. And it is more important for SoEs not to consider profit their only priority. Secondly, we need a good management. Lastly, we must have comprehensive roadmap for the coming years. — VNS