Australia supports Economic Reform in Vietnam (Aus4Reform)

17/8/2018

State Monopoly Reform In Network Industries

In order to improve the business environment, especially in the network industries, The Aus4Reform Program (the Australian Government’s Support for Economic Reform Program) organize science workshop “State monopoly reform in network industries" at the Central Institute for Economic Management (CIEM) on 6th July.

State Monopoly Reform In Network Industries

In order to improve the business environment, especially in the network industries, The Aus4Reform Program (the Australian Government’s Support for Economic Reform Program) organize science workshop “State monopoly reform in network industries" at the Central Institute for Economic Management (CIEM) on 6th July.

The event attracted a great number of researchers, representatives from many sectors such as electricity, railways, aviation and telecommunications... associations and businesses in the same field, participating in the discussion.

 

The workshop was organized to assist the Government of Viet Nam in achieving its goals of improving the business environment and transforming it into a market economy, increase more economic growth, more comprehensive and better quality.

This support program of Aus4Reform is expected to help at least 1 million private enterprises by 2020; contributing to increase the percentage of women-owned enterprises. At the same time, support businesses to achieve growth in productivity and increase productivity.

In addition, strongthen linkages between the Australian Government and Vietnamese organizations; bring more opportunities for Australian businesses to increase their trade or investment in Vietnam through a more competitive and transparent business environment, with a more vibrant Vietnamese private sector.

PhD. Nguyen Dinh Cung, Director of CIEM Institute said that this is also an opportunity for scientists, experts, managers, policy makers and businesses to discuss, show opinion about state monopoly in network industries; To propose solutions to further reforms in order to create a fair business environment, thus contributing to raising the competitiveness of Vietnam.

According to the research report of the Institute CIEM, in the past, the state monopoly took place in most of the network industry. After many years of economic reform and opening up, the number of branches and domains remains state monopoly has reduced but there are still many problems.

This is the reason for the need to further reform economic institutions for international integration, in line with the development of science and technology, especially in the era of industrial revolution 4.0 recently. At the same time, meet the requirements of economic restructuring to enhance national competitiveness.

At present, the state monopoly associated with the determination of  State ‘s role in the economy, especially in the network industry this issue is completely given to state enterprises to perform all stages, a section with the necessary reason for regulating the economy, national security and public utility tasks. Therefore, the reform process associated with economic transformation must also restructure, accelerate the reform of the SOEs sector, in other words, narrow the scope of state monopolies.

According to Ph.D Tran Mai Hien, member of The National Competition Council,  said that: need to separate state monopoly domains and monopoly state enterprises. There are a number of regulatory or statutory texts that point to these concepts, but in general are related to the interests of the state and the public interest in order to make the requirement of state monopoly. However, these are the areas that private bussiness do not want to do and can not do, which makes the business react.

Many businesses say, "You know how we do not want to do it and how did you know we could not do it?", Mr Hien reflected.

According to Mr.Hien, these things are not fair and lack competitiveness. Especially at present, most of the public service and state monopoly sectors are using the form of contractor appointment, not in accordance with the contents specified in the Competition Law, Bidding Law.

These are probably the things that need to be research  and adjusted or adapted again to the law.

From the fact of business, representatives of Deputy general director, Vietnam Railway Corporation (VNR), shared that VNR is currently managing the entire infrastructure, transport management and organization and transport business. Over the past three years, the implementation of restructuring has been relatively drastic but the results are not as expected. Restructuring to reduce monopoly actually reduces the efficiency of production.

That is the fact and this makes the Railway Corporation of Vietnam worried, though VNR will continue to restructure as planned. But what model to successfully and effectively restructure is what businesses are looking for to be recommended and recommended by experts.

The network industry has characteristics that require state intervention to reform and narrow the scope of state monopolies in a number of areas such as electricity, aviation, telecommunications and rail. According to the recommendations of experts and CIEM  institute, in the context of practical requirements need to restructure the economy.

At the same time, promote the improvement of the business environment and enhance national competitiveness; Extensive international integration and adaptation to the dramatic effects of technological progress in the industrial revolution 4.0; The government needs to continue reforming, identifying the need to maintain state ownership and manage, monitor and avoid the transition from state monopoly to corporate monopoly.

For the electricity sector, it should continue to reform according to the roadmap, ensuring a competitive electricity market; make sure about independence between production, transmission, distribution and price negotiation with customers; make certain equitable access to core systems in the power sector, including grid, power counting and information technology systems for the operation of power systems and power markets. At the same time, publicize the electricity price structure and develop an independent monitoring body for the electricity sector

With regard to railways sector, experts recommend continuing to restructure the Vietnam Railway Corporation. Accordingly, clear separation, actually rail infrastructure and rail transport business; attracting private investment and rail transport business. At the same time, no licensing, distribution of infrastructure, operating the train for the transport unit. At once, the establishment of an independent agency to manage railway infrastructure; to develop a mechanism for access and connection of railway infrastructure to ensure that new ship owners participate in the competitive rail transport business.

Solutions to the aviation industry, as recommended by the experts, should ensure fair and equitable access to airport infrastructure between airlines; to access and use infrastructure and land of airports with reasonable expenses. In addition, the monitoring of access prices for airport services and the issuance of a mechanism to control the management of airports, reducing the monopoly position of Vietnam Airlines Corporation (ACV) at the airport.

Regarding the telecommunication industry, it is necessary to continue restructure the sector and decisively equitize State-owned enterprises, especially the Vietnam Posts and Telecommunications Group and Mobifone Telecom Corporation. In addition, the establishment of sector regulators to carry out the supervision, prevent the status of monopoly links, dominate the market.