Are weak state enterprises caused by the head himself?

Today (March 24), Prime Minister Pham Minh Chinh chaired a nationwide online conference with enterprise The State (SOE) on the topic of continuing to innovate and improve operational efficiency in order to mobilize resources of State enterprises in socio-economic development.

In the opening speech, the Prime Minister affirmed that SOEs hold a key position and are an important material force of the State economy, making an important contribution to stabilizing the macro-economy and promoting socio-economic development. . However, this area has not yet shown its position and promoted its advantages.

Need to identify bottlenecks

In order to promote SOEs to develop sustainably, the Prime Minister pointed out that “it is very important to identify bottlenecks in mechanisms and policies for this business sector, obstacles and limitations in enterprises themselves in order to prevent them from getting worse.” It provides orientations and innovative solutions to improve operational efficiency in order to mobilize resources of State-owned enterprises for socio-economic development in the coming time.

Suggesting discussion topics, the Prime Minister asked the question: Why have SOEs not yet played a prominent role in leading, motivating, paving the way, guiding, attracting and promoting other stakeholders? develop? Why production efficiency business of many SOEs is still low compared to the resources they hold? What are the causes? Has the State management role of state ownership representative agencies been good, what are the problems? What is the model of the Committee for the Management of State Capital at Enterprises in order to promote the production and business efficiency of State-owned enterprises?

Regarding the management of SOEs, which is slow to be innovated and has not kept up with the scale of assets managed by enterprises, the Prime Minister stated the current situation of the same guidelines, mechanisms and policies, but in some places it is well implemented and in some places it is delayed. , there are places that can’t work, there are places where responsibilities are pushed…

“So what is the cause, is it because of the head of that organization? Or is it because of mechanisms, policies or coordination between ministries, branches or direction? Weaknesses and problems? We must try to find the cause to have the appropriate solution,” the Prime Minister said.

The Prime Minister noted that in the international and domestic context, there are many unpredictable changes, the implementation of the commitments of the new generation FTAs, the rapid development of the industrial revolution 4.0, the commitments to protect environment… impacts in many ways on production and business capacity, competitiveness and sustainable development and survival of the business community in general and SOEs in particular.

Therefore, the Prime Minister asked the delegates to discuss and come up with specific plans, tasks and solutions for each ministry, sector and locality, each group, corporation, and SOE to have the right perception. , appropriate solutions and drastic and effective actions.

State-owned enterprises contribute more than 29% of GDP

According to the Ministry of Planning and Investment, by the beginning of 2021, Vietnam still has about 500 enterprises with 100% charter capital held by the State and nearly 200 enterprises in which the State holds a controlling stake.

If excluding defense, security and agro-forestry enterprises, there are only 94 large-scale SOEs, including: 9 economic groups; 67 State corporations, 18 companies operate under the model of parent company – subsidiary company.

Only enterprises with 100% state capital are holding, although they only account for a small proportion of the economy (about 0.08% of enterprises operating as of December 31, 2020), they hold major resource of the economy (about 7% of total assets and 10% of equity of the entire enterprise in the market, accounting for about 25.78% of total production and business capital and 23.4% of value fixed assets and investments finance long-term of operating enterprises with production and business results).

The average asset size of a SOE is VND 6,095 billion, 18 times higher than that of a foreign-invested enterprise and 139 times that of a private enterprise. Many SOEs have built prestigious brands of products, goods and services with great regional and international influence in many fields such as telecommunications services, transportation services, seaports and logistics. …

The average pre-tax profit-to-equity ratio for the whole period 2016-2020 is 10.46%; The average pre-tax profit to total assets ratio for the whole period 2016-2020 is 4.87%, higher than non-state enterprises (1.26%).

Although accounting for only a very small percentage (0.08%), SOEs contribute 28% of the total tax and other payables to the State budget.

In terms of labor efficiency, SOEs employ about 0.7 million workers, accounting for about 7.3% of the entire enterprise sector. The average monthly income of an employee at SOEs in 2020 will reach about 20 million VND.

Vietnam’s SOEs are holding huge market shares in a number of fields such as energy, telecommunications, banking, etc., contributing more than 29% of the country’s GDP, a report by the Ministry of Planning and Investment said.