Privatization Facing Significant Barriers in Achieving Goal
Vibe Check: Let's dive into the nitty-gritty of Vietnam's plan to equitize 30 State-owned enterprises (SOEs) by the end of 2025. While things are lookin' good on paper, reality's paintin' a different picture.
Reality Check: The standing tall of 30 SOEs by the end of 2025, as per the Government's plan, ain't happening as planned since none of 'em have been equitized yet. The Ministry of Finance revealed that not a single SOE was equitized in 2023, 2024, or the first quarter of 2025, which means the remaining nine months of 2025 got a helluva lot on their plates to meet the target set for the 2023-2025 period.
The Lowdown: Equitizing SOEs might seem like a stroll in the park, but it's got more hurdles than a high school track meet. Planning, implementation, supervision, and inspection issues plague the equitization process, with some SOE heads still ignorant as a stoner at a doobie convention. The fear of responsibility and the absence of regulations transformed into law are some other barriers hindering progress.
The Solution: To kick things into high gear, the Ministry of Finance has repeatedly proposed clarifying responsibilities of related organizations and individuals, especially those running the SOEs. They believe removing these SOE heads' chill vibe about quick or slow implementation not affecting them will help tow the line towards efficient equitization.
Hold Up: The slow equitization of SOEs has been an ongoing struggle for years. In 2022, only one SOE got equitized, with experts attributing the delay to fear of making mistakes and overlapping regulations. The regulations related to equitization are mostly stated in circulars and decrees, and competent authorities need to supplement these and develop them into law to create a complete legal corridor for implementation.
30 SoEs must be equitised in the remaining nine months of 2025 to meet the plan set for the 2023-25 period. Photo vnbusiness.vn
Investors' Perspective: Investors' appetite for buying State capital in SOEs is limited due to the potential legal risks associated with it. In many cases, transactions were canceled and assets returned when investors discovered internal errors from the seller. To address this, experts recommend studying and supplementing regulations to protect buyers' property rights when buying State capital in enterprises, as well as supplying regulations on SOEs' obligation to disclose information.
Parting Shot: The equitization of the 30 SOEs by 2025 is facing some serious resistance, but accelerating restructuring plans, clarifying sector roles for SOEs, adopting market-driven pricing reforms, and creating fair competition conditions can help overcome these roadblocks and push Vietnam’s economic growth prospects to new heights.
- The government's plan to equitize 30 State-owned enterprises (SOEs) by the end of 2025 has hit a snag, as none of the SOEs have been equitized yet.
- The Ministry of Finance has identified planning, implementation, supervision, and inspection issues as hurdles in the equitization process.
- To expedite the process, the Ministry of Finance has proposed clarifying the responsibilities of related organizations and individuals, especially those running the SOEs.
- In 2022, only one SOE was equitized, and experts attribute the delay to fear of making mistakes and overlapping regulations.
- Investors' appetite for buying State capital in SOEs is limited due to potential legal risks, and transactions have been canceled in some cases when errors were discovered.
- To address this, experts recommend studying and supplementing regulations to protect buyers' property rights and supplying regulations on SOEs' obligation to disclose information.
- Adopting market-driven pricing reforms, clarifying sector roles for SOEs, and creating fair competition conditions can help overcome roadblocks and push Vietnam’s economic growth prospects to new heights by 2025.
