New mechanisms and policies needed for State-owned enterprises to grow
- 157
- Business
- 09:19 05/04/2022
DNHN - State-owned enterprises (SOEs) should have the same rights and obligations as other enterprises in the economy. And a policy reform is needed for enterprises to operate in line with the market mechanism and make decisions in a proactive and flexible manner like private enterprises.

The performance of SOEs has not seen marked improvement in recent years and is not commensurate with their resources while the restructuring process has been slower than expected. The reason lies in the drawbacks in the mechanism and policy on this economic sector.The concern shared by many SOEs is the gradual loss of their position in the market as their growth is trailing behind private and foreign-invested enterprises.
Lilama, for example, was a notable player in the market during the early 2000s as the general contractor of various hydropower projects, oil refineries and cement factories. The company’s annual revenue had reached over 20 trillion VND (875 million USD) at times, but the figure has now dropped to 4 trillion VND (175 million USD).
Lilama Chairman Bui Duc Kien explained that in the later years, there were not as many projects while the company had also overdiversified its investments, ranging from cement to electricity and banking. Such investments were not productive and Lilama had to divest and restructure.
Even the SOEs that are dominating the market are also worried about the road ahead if the management mechanism over SOEs is not reformed.
Viettel General Director Tao Duc Thang said the largest room for the company is now investing in start-up companies through venture capital funds, but all of its decisions are not as quick as those of private enterprises. When opportunities are available, private firms only take a month, or even a week, to sign contracts but it could take SOEs several months to complete all the procedures. As a result, SOEs find it very difficult to grow and are thus becoming smaller than private companies.
VNPT Chairman To Anh Dung shared that the telecommunications market is facing saturation and revenues of telecoms firms are going flat or even going down, so the new space for growth is in digital transformation. SOEs have not occupied a significant share in this field.
Amid the lightning-fast development of the market, VNPT has created a plan to restructure and asked for the government’s early approval so that it will have the opportunities to grow faster. Unlike private enterprises, which can invest in anything they find profitable, SOEs are only allowed to do what is right and risks are not accepted, so it is very difficult for them to innovate, especially in the IT field. Dung is expecting a new policy so that SOEs can promote their role in driving the economy, especially during this difficult period.
The biggest wish of SOE leaders is that they can operate as normal enterprises, by giving them the autonomy to do business on the basis of specific development orientations, tasks and goals. SOEs need to have clear property rights and should be monitored and assessed based on the general development goals, rather than specific projects or activities.
If so, SOEs must be regarded as having the full rights and obligations like other enterprises in the economy. Mechanism and policy reform is needed for SOEs to operate in accordance with the market mechanism and operate in as proactive and flexible a manner as private enterprises. This requires separating the function of representing owners from the function of enterprise management, thus reducing the intervention of owner representing agencies in the operation of SOEs that is happening now.
According to Vinatex Chairman Le Tien Truong, current policy inconsistencies are undermining the performance and competitiveness of SOEs compared to private and foreign-invested companies. He said that all matters must be presented to the owner for permission and in turn the owner must seek opinions from the relevant agencies. Such a process is time consuming and those who understand the market most are not allowed to make decisions to seize on the opportunities.
Aware of such drawbacks, the Ministry of Planning and Investment has suggested that ministries, agencies, localities and the Commission for Management of State Capital at Enterprises should change their working method and not intervene in the business administration of SOEs.
In addition, it is necessary to implement synchronous policies on wages aligned with labour productivity and business performance of enterprises, link SOE development with the strategy of economic sector development, and change the mindset and viewpoint on equitisation and disinvestment.
Once such measures are carried out, the development space for SOEs will be expanded and they will be driven to innovate and enhance the competitiveness of SOEs.
Source NDO
Related news
- Dong Thap Business Club in Ho Chi Minh City launches support fund to accompany enterprises
- Women entrepreneurs in the Era of National Advancement
- The move of a Chinese businesswoman into Vietnam’s snack market
- The Đại Dũng Group: A 30-Year journey of developing a sustainable value chain
- Rediscovering connection – a journey of discovery at LAMORI
- ShopeeFood and Grab dominate Vietnam’s food delivery market
- The ambitions of major enterprises in 2025
- Rice export prices expected to rebound soon due to limited supply
- Attracting investment in renewable energy – Driving the green economy
- Who are the two mysterious female tycoons holding 52 million HQC shares?
- GDP growth target for 2025: Aiming for a breakthrough pace
- “Green treasure” in the heart of the Mekong Delta
- Việt Nam sets import tariff quotas for salt and poultry eggs in 2025
- Brandnew e-commerce law to address policy gaps
- Bến Tre sets ambitious economic goals in 2025
- Chopin: The magical piano – Touching the heart and emotions of the audience
- The collaboration between Green power and Huawei: A major step in developing a 100MWp solar energy project
- VITA VINA: Where dreams of vocational study abroad take flight
- Green Power and Green Carbon Group sign cooperation agreement for development
- “Imposing high taxes on short-term real estate purchases reduces market liquidity”
Đọc thêm Business
Dong Thap Business Club in Ho Chi Minh City launches support fund to accompany enterprises
More than 150 Dong Thap entrepreneurs in Ho Chi Minh City gathered at Van Hien University to foster business connections, expand cooperation, share practical experiences, and stay updated on current business trends.
Khai Hung corporation signs Strategic Cooperation Agreement with Japanese partners
Signing a cooperation agreement with reputable Japanese partners is a strategic move, demonstrating Khai Hung Corp’s proactive approach in capturing market trends, accessing advanced technology, and leveraging international expertise.
Women entrepreneurs in the Era of National Advancement
The economic forum "Women Entrepreneurs in the Era of National Advancement" aims to honor the role of female leaders, promote collaboration, and connect the business community.
Rice export prices expected to rebound soon due to limited supply
The Vietnam Food Association (VFA) has forecasted that rice exports in 2025 will reach 7.5 million tons. The rice market is currently at its lowest point, but it is anticipated that importers will soon ramp up purchases, driving prices upward.
GDP growth target for 2025: Aiming for a breakthrough pace
According to the proposal, Vietnam's national GDP growth target for 2025 must reach at least 8%, laying a solid foundation for achieving double-digit growth rates.
Economic expert Võ Trí Thành assessed: President Donald Trump’s new trade policy will impact Vietnam
According to Dr. Võ Trí Thành, Director of the Institute for Brand and Competitive Strategy Research, Donald Trump’s new trade policy will have significant effects on Vietnam’s economy. He also provides strategic recommendations for businesses.
Vietnam's market advantage: Investment opportunities in a new context
Balancing interests, striving for a 7.5% GDP growth, enhancing international cooperation, promoting technological innovation, and developing appropriate foreign policies are the "keys" for the nation and businesses to overcome challenges.
Việt Nam sets import tariff quotas for salt and poultry eggs in 2025
The Ministry of Industry and Trade has announced import tariff quotas for salt and poultry eggs for 2025, aiming to meet domestic production and consumption needs.
Brandnew e-commerce law to address policy gaps
The proposed law seeks to address gaps in existing regulations and keep pace with technological advancements and evolving business models.
Bến Tre sets ambitious economic goals in 2025
The southern province of Bến Tre eyes ambitious goals to develop its industrial sectors, increase investment, and improve the business environment.