Econ
Special committee to manage VND5,400 trillion capital at State-owned enterprises
Prime Minister has signed a decision to set up a working group in charge of forming a special committee dedicated to manage huge capital and assets worth some VND5,400 trillion (US$237.89 billion) at state-owned enterprises (SOEs).
Deputy Prime Minister Vuong Dinh Hue is the head of the working group, which is also include four deputy heads --- Nguyen Hoang Anh, former Secretary of Cao Bang Province Party Committee, Minister-Chairman of Government Office Mai Tien Dung, Minister of Planning and Investment Nguyen Chi Dung and Minister of Finance Dinh Tien Dung.
The working group will act as a consultant to the Prime Minister in setting up the special committee.
During a last year’s conference between the government, ministries, and localities, Phuc stressed that this committee, which represents ownership of enterprises’ state capital, will be founded in 2018′s first quarter, in order to more effectively supervise and manage state capital and assets, and to create a more transparent business climate.
The Ministry of Planning and Investment’s drafted plan to establish this committee was submitted to the government a long time ago, following many discussions and conferences.
The committee will not manage SOEs’ performance, instead purely looking at their state capital and assets. All enterprises will continue operating under the law and report their operational results to their relevant sector-specialized bodies such as finance, banking, environment, and industry and trade.
As planned, 30 SOEs will be put under the management of the special committee, including nine economic groups and 21 corporations that are currently under the management of seven ministries.
One such noteworthy corporation in the list is the State Capital Investment Corporation, which was founded with functions similar to that of the special committee. The other SOEs include Vietnam National Textile and Garment Group, National Oil and Gas Group, Electricity of Vietnam, Viet Nam Posts and Telecommunications Group, Vietnam National Coal and Mineral Industries Corporation, Bao Viet Group and Viet Nam Aviation Corporation.
Experts have so far hailed the plan, saying that it is a positive initiative as the committee will help the government to control state capital in enterprises with greater ease.
The move is not only reflects good corporate governance practices of the Organisation for Economic Cooperation and Development for SOE management, but also the potential to contribute to the government’s ultimate objective of enhancing performance and productivity in the SOE sector and the economy more broadly, the experts said.
According to the experts, separating ownership and regulatory functions is important for two main reasons. First, it mitigates potential conflicts of interest in sectors where the state operates as an owner and a regulator, and can help level the playing field and enhance competition between enterprises, regardless of their ownership. Second, having a dedicated ownership agency also allows the government to professionalize the management of its assets and ensure value maximization and performance while reducing potential fiscal risks.
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During a last year’s conference between the government, ministries, and localities, Phuc stressed that this committee, which represents ownership of enterprises’ state capital, will be founded in 2018′s first quarter, in order to more effectively supervise and manage state capital and assets, and to create a more transparent business climate.
The Ministry of Planning and Investment’s drafted plan to establish this committee was submitted to the government a long time ago, following many discussions and conferences.
The committee will not manage SOEs’ performance, instead purely looking at their state capital and assets. All enterprises will continue operating under the law and report their operational results to their relevant sector-specialized bodies such as finance, banking, environment, and industry and trade.
As planned, 30 SOEs will be put under the management of the special committee, including nine economic groups and 21 corporations that are currently under the management of seven ministries.
One such noteworthy corporation in the list is the State Capital Investment Corporation, which was founded with functions similar to that of the special committee. The other SOEs include Vietnam National Textile and Garment Group, National Oil and Gas Group, Electricity of Vietnam, Viet Nam Posts and Telecommunications Group, Vietnam National Coal and Mineral Industries Corporation, Bao Viet Group and Viet Nam Aviation Corporation.
Experts have so far hailed the plan, saying that it is a positive initiative as the committee will help the government to control state capital in enterprises with greater ease.
The move is not only reflects good corporate governance practices of the Organisation for Economic Cooperation and Development for SOE management, but also the potential to contribute to the government’s ultimate objective of enhancing performance and productivity in the SOE sector and the economy more broadly, the experts said.
According to the experts, separating ownership and regulatory functions is important for two main reasons. First, it mitigates potential conflicts of interest in sectors where the state operates as an owner and a regulator, and can help level the playing field and enhance competition between enterprises, regardless of their ownership. Second, having a dedicated ownership agency also allows the government to professionalize the management of its assets and ensure value maximization and performance while reducing potential fiscal risks.
