The Government does not aim at best prices in equitizing State-owned enterprises, as the target of SOE restructuring is to create better governance with more efficient operations and provide a healthier competition environment.

This was highlighted by Deputy Prime Minister Hoang Trung Hai during a talk on Wednesday with Charles Goddard, editorial director of the Economist Intelligence Unit in Asia-Pacific.

Speaking at the conference on Vietnam’s international economic relations held by The Economist magazine in Hanoi on Wednesday, Hai emphasized 2012 was an important year of economic restructuring, especially SOE restructuring. He brushed aside the misconception that the current tough time is not appropriate to let SOEs go public for fear of low prices.

Goddard said the scaling down of the State sector was essential, but he wondered how the Government would reduce the dominant role of SOEs in the economy.

Hai replied SOE equitization and restructuring was aimed to create a fair business environment for enterprises to promote their strengths.

In fact, State firms have always hoped for such an environment for them to operate in the same manner as private enterprises do, said the deputy prime minister, hinting at administrative impediments facing SOEs in their business performance.

He said the competitiveness of local enterprises was really poor, SOEs and private firms alike. “The economy could not develop if State-run enterprises failed to enhance their competitiveness. This is the ultimate goal of the Government,” Hai stressed.

Goddard also questioned the Government’s determination given the economic instability with high inflation and large trade deficit.

In response, Hai stated it would take time to stabilize the macro-economy. Still, the Government’s measures to stabilize the economy have begun to pay off.

Citing the figures of the whole year of 2011, he said inflation had cooled down in the year’s second half, alongside the narrowing trade deficit, while the balance of payments had turned positive, reaching US$2.5-3 billion. However, in addition to the country’s efforts, the support of international business community would be a motivation to slash the trade deficit, Hai stressed.

He added the country would continue to improve the institutional capacity to lessen the State monopolies, offering more chances for private companies to join the market.

Goddard raised the question if State firms’ associated benefits with central agencies would hinder the restructuring process.

Hai admitted to the associative relationship between SOEs and the Government, saying it was the brainchild of the centrally-planned economy. However, this way of thinking is changing, as the Government has recognized the need of fair treatment towards both public and private companies.

For example, the country’s leaders have recently worked with big companies like Samsung and Intel to handle the specific policies for each enterprise.

The number of SOEs in Vietnam has fallen from 12,000 to 6,000, and then 1,069 in 2011. The Government has approved the scheme to continue the equitization of SOEs, aiming to pull down the figure to 650 State businesses in 2015.

Source: Dztimes