Regulations needed to improve monitoring of SOEs

Regulations needed to improve monitoring of SOEs

Vietnam should establish specific regulations to enhance the efficiency of monitoring mechanism of the agency representing the owner at State-owned enterprises (SOEs) during the shake-up process of the businesses.

Regulations needed to improve monitoring of SOEs (Photo: VNA)

At a workshop on reforming monitoring mechanism of the owner’s representative agency in Hanoi on July 19, Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung pointed out several shortcomings in the supervision of SOEs’ business operation, resulting in many loopholes and consequently losses in state capital and asset losses.

CIEM report showed that profit margins of SOEs decreased constantly by around 39 percent during 2011-2016. There is no sign of fall in the number of loss-making companies, and 23 major groups and corporations have reported accumulative loss of 17 trillion VND (731 million USD).

Many ministries, branches, agencies, and local authorities have joined in the monitoring process as representatives of the State ownership in enterprises; however, no single body has sufficient competence and capacity to keep track on, and evaluate SOEs in a fully, effective and comprehensive manner.

In addition, many problems have arisen during the monitoring process such as a shortage of accurate and updated information on State asset in SOEs, enterprises’ management’s unwillingness to provide information, and unclear responsibilities of relevant parties during the supervision.

Cung said that suitable legal corridors are necessary to ensure both the effective operation of SOEs and the supervision of the State ownership’s representative agencies. 

CIEM underlined the significance of human resource in ensuring the development of state capital in the enterprises.

Raymond Mallon, economic expert of the Australian-funded programme (Aus4Reform), said that relevant authorities should issue uniform legal regulations while accelerating inspections to control business situation at SOEs.-VNA

Source: Vietnam