There needs to be a policy mechanism to “untie” state-owned enterprises to promote their advantages, overcome limitations, and take advantage of development opportunities.
Currently, there are 841 enterprises with state capital, with a total state capital investment of 1,752 trillion VND. The average pre-tax profit margin on equity of enterprises in 2023 is 12%. However, according to the Government’s report sent to the National Assembly before the 8th Session, the operations of corporations, general companies, and state-owned enterprises are still not commensurate with the resources they hold, and investment efficiency is not as expected.
One of the reasons is that state-owned enterprises have not yet exercised their autonomy and self-responsibility to operate according to market mechanisms. Therefore, there needs to be a policy mechanism to “untie” state-owned enterprises to promote their advantages, overcome limitations, and take advantage of development opportunities. Strong innovation in the work of building and perfecting institutions and laws is also a requirement in the Resolution of the regular Government meeting in October that has just been issued.
The Draft Law on Management and Investment of State Capital in Enterprises is being evaluated as a “breakthrough” compared to the previous Law No. 69 of 2014. Accordingly, many new viewpoints are “unleashing” for enterprises with state investment capital, which is expected to create a driving force to promote investment efficiency and create an open mechanism for state-owned enterprises to develop.
According to Law 69, the State owns state-owned enterprises and can intervene in all management activities of the enterprise. However, the new draft law is built on a “breakthrough” perspective, the State is just an investor like many other investors in the enterprise, and does not intervene administratively in the enterprise’s management activities.
“The idea running through the Law is that the State does not manage business entities, but we only manage cash flow. This is the idea running through this law. From our perspective as financial experts, we see this as a very fundamental innovation, changing the entire mindset of our current apparatus,” said Mr. Pham Phan Dung – Former General Director of the General Department of State Reserves.
When the state is identified as a special capital investor in enterprises, without direct administrative intervention in the production, business and management activities of enterprises, enterprises will also be more proactive in their production and business plans. This is what all enterprises with state capital expect. They need a wider space to effectively promote state capital in enterprises.
Mr. Nguyen Van Mau – Member of the Board of Directors, Vietnam Oil and Gas Group PVN expressed: “PVN has many investment activities abroad, I also hope that the new law has regulations to decentralize to enterprises to proactively decide on investment projects abroad, ensuring that these procedures can be shortened, and opportunities can be taken advantage of in the best way”.
According to the representative of the State Capital Management Committee at Enterprises, the new draft law will have provisions that create the best conditions for state-owned enterprises to develop. It will properly implement the policy of innovation in law-making, resolutely abandon the thinking of General Secretary To Lam “if you can’t manage it, ban it”, and promote decentralization and delegation of power to state-owned enterprises.
Mr. Nguyen Van Canh – Vice Chairman of the State Capital Management Committee at Enterprises commented: “The most important thing for this amendment of Law 69 is to supplement the implementation of Resolution 12 of the Central Committee, separating the management function and the ownership agency, as well as separating the management and administration functions of enterprises. Decentralization and delegation of authority for enterprises to be proactive in their investment and production and business activities”.
After 10 years of implementing Law 69, state-owned enterprises now need to put on a new, more spacious coat to replace the old, tight coat, so that they can be proactive in production and business, create a breakthrough momentum for development, and truly be the “leading birds” leading the economy forward in the coming time.