SOEs not pulling proportionate weight: report

TN News

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Vietnam's state-owned enterprises have contributed a lot to the national economy, but not enough to match the resources invested in them, the government has said.

According to a report sent to the National Assembly recently, most state groups and corporations have operated effectively, helping to speed up the industrialization and modernization process of the country.

However, there were inefficient investments and delays in many important public projects. Some groups and corporations invested in the banking, securities and real estate sectors while their capital for core businesses was still limited.

The report also said some state companies incurred losses but their managers were not held responsible due to a lack of provisions to sanction such acts.

Of the country's 91 state groups and corporations, 81 were covered in the report, not including shipbuilder Vinashin.

Vinashin was on the brink of bankruptcy. As of June this year, the company had accumulated debts totaling VND86 trillion (US$4.4 billion), leading to an investigation and the initiation of a large-scale restructuring effort.

The government report said total debts run up by state groups and corporations were recorded at VND813.4 trillion. They posted profits of VND43.86 trillion in the first six months, meeting 51 percent of their annual targets.

As of June 30, a total of 16 state groups had invested a combined $16 billion overseas. Most of this investment was made by national carrier Vietnam Airlines, which has invested in Cambodia's Angkor Air.

According to a report released by the World Bank last month, state-owned enterprises have played an important role in Vietnam's progress, but have also become "a source of long term vulnerabilities."

"While some of the Economic Groups have served the cause of their existence (e.g., Vietnam Posts and Telecommunications Group, Electricity of Vietnam, PetroVietnam, etc.), many have also contributed to magnify the economic instability," it said.

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