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Jun 16, 2024 / 12:21

Vietnam eyes foreign CEOs for state-owned firms: PM

A changed mindset remains one of the things needed to keep Vietnam’s state-owned enterprises as the backbone of the country’s economy

Vietnamese state-owned enterprises should revamp their leadership with a focus on innovative executives, pilot recruitment of foreign chief executive officers (CEOs) and highly qualified staff to enhance business efficiency in a systematic, comprehensive, and sustainable manner. 

 Prime Minister Pham Minh Chinh welcomes changes in cadre work at SOEs. Photos: Nhat Bac/VGP

The idea was shared at the meeting with state-owned enterprises (SOEs) on June 15 chaired by Prime Minister Pham Minh Chinh.

The PM stressed the importance of quality personnel, urging SOEs to consider recruiting managers who are not members of the Communist Party of Vietnam (CPV) and to offer appropriate salary and remuneration mechanisms.

At the meeting, which was also attended by Deputy Prime Ministers Le Minh Khai and Le Thanh Long and representatives from more than 150 state-owned corporations and commercial banks, PM Chinh said the human resources work was important in improving the operation of the largest economic sector – the backbone of Vietnam’s economy. 

 Overview of the meeting in Hanoi on June 15. 

Role of SOEs in the economy

Between January and May, the combined revenues of 19 corporations and groups under the Commission for the Management of State Capital in Enterprises (CMSC) reached VND823 trillion (US$32.33 billion), up 12% on year. Their pre-tax profits were estimated at VND28 trillion ($1.1 billion), representing an on-year increase of 33%. They contributed VND70 trillion ($2.75 billion) to the State budget.

As of the end of May, their combined investment was more than VND76 trillion ($3 billion), marking an increase of 20%. Some major national projects should be named: Nhon Trach 3, Nhon Trach 4, and Quang Trach 1 Coal-fired Power Plants; Hoa Binh Extended Hydropower Plant in the north; Yaly Hydropower Dam in the Central Highlands; the 500-kV national grid; the $12 billion  Block B – O Mon gas-fired power plant complex off Vietnam’s southern shore invested by PetroVietnam.

During the period, SOEs invested in other major infrastructure projects, including the expansion of Tan Son Nhat International Airport, Noi Bai International Airport, Ben Luc – Long Thanh Expressway, Long Thanh International Airport, Container Terminals 3, 4 at Lach Huyen Port in the northern city of Haiphong, and the restructuring of the Nghi Son Refinery Project in the central province of Thanh Hoa.

In 2023, SOEs generated total revenues of VND1,652 trillion ($64.82 billion) and VND125 trillion ($4.9 billion) in profits. Of the total, 19 corporations under the CMSC and the multinational mobile network operator Viettel Military Industry and Telecoms Group (Viettel) made up 79% of revenues. The SOEs contributed VND166 trillion ($6.52 billion) to the state coffers, rising 8% on year.

Innovation in human resource management is part of the missions that SOEs should undertake to ensure their leading role in the economy.

“What other economic sector could lead and propel socio-economic development, inspire motivation, and create opportunities for growth if state-owned enterprises (SOEs) are not up to the task?” PM Chinh said.

Accordingly, other directions include holding the task of being pioneering and crucial in the socio-economic development for macroeconomic stabilization; being self-reliant and creative in promoting growth motivation with an emphasis on both traditional fields (investment, exports, and consumption) and emerging areas namely green and digital transition, inclusive economy, semiconductors, hydrogen, and artificial intelligence (AI).   

They were asked to be aware of their advantages: resources, capital, assets, technologies, and manpower - in order to increase productivity and speed up investment projects.

Last but not least, SOEs need to promote their pioneering role in key sectors relevant to national industrialization and modernization. 

 Prime Minister Pham Minh Chinh reaffirms that the government and himself always pay attention to businesses' recommendations. 

The Prime Minister emphasized that the role of SOEs was set out in Resolution No.29-NQ/TW issued in November 2022 by the Central Party Committee, which stated that some state-run and private corporations should be developed into those capable of holding chief positions in some main fields and competing in global supply chains.

“Vietnam now more than ever needs homegrown businesses that are sizable, globally accessible, competitive, important players, and at the forefront of industrialization and modernization,” stated the Prime Minister.

That's why it’s better to have a Viettel in each sector and a Becamex in each locality, he said. 

To achieve these goals, PM Chinh urged SOEs to be leaders in innovation, global integration with a focus on effective overseas investment, effective use of domestic resources coupled with anti-corruption, taking breakthroughs in growth and social welfare, and having good governance and human resources.

In assigning tasks to specific sectors, the Prime Minister asked those working in the energy sector (electricity, petroleum, coal) to meet the demand of the economy, in particular to ensure the supply of electricity under all circumstances.

Those working in food and foodstuffs need to boost productivity by applying advanced technologies and collaborating with other stakeholders to ensure domestic consumption and exports. Meanwhile, close cooperation is needed to implement the project of growing one million hectares of high-quality, low-emission rice. The Prime Minister agreed to hold tripartite meetings (state, businesses, and farmers) for the implementation of this project.   

He called on public service SOEs to guarantee social security and clean water supply while looking for ways to support people and businesses by waiving or reducing fees, particularly those related to water, telecommunications, logistics, and freight.

Meanwhile, the SOEs working in the construction and urban development sectors need to develop one million social housing units with a target of completing 130,000 units this year.

It is recommended that state commercial banks assume the lead in lowering interest rates and facilitating lending to both established and emerging industries to facilitate inter-regional development.

On this occasion, PM Chinh reiterated that the Government and the Prime Minister always listen to what businesses have to say, regardless of their size or status – domestic or foreign.