Vietnam needs to quicken the privatization of state-owned enterprises (SOEs) as well as divestment from non-core businesses to raise capital and boost performance, the country's prime minister said on Wednesday.
Nguyen Tan Dung made the call after just 29 SOEs completed privatization in the first quarter among the 289 targeted to undergo the process in 2015, dealing another setback to the government's reform plans for the $184 billion economy.
"Privatizing SOEs is not only to get funds for investment in other important areas, but the ultimate purpose is to let companies operate more efficiently," Dung was quoted as saying in a government statement.
Vietnam has been striving to trim state stakes in SOEs, many of which have low profitability and high levels of non-performing loans (NPLs). SOEs have been blamed for taking too many loans and slowing moves to bolster the economy and clean up a banking system blighted by bad debt.
The drive has so far attracted little interest from foreign investors, much to do with the small stakes on offer, the state's sizable controls and concerns about vested interests.
The initial public offering of flag carrier Vietnam Airlines last year raised only $51 million and saw barely any foreign bids for a stake of just 3.47 percent.
The state holdings sold during the government's privatization program are worth 10 trillion dong ($464 million) in book value, or 67 percent of the 15 trillion dong targeted for 2014-2015, the statement said.
Apart from selling state stakes in the 289 SOEs this year, government holdings in other firms with low efficiency need to be sold and divestment from non-core business should be done faster, Dung added. He gave no details of the firms earmarked for privatization.
Last December Dung approved a plan to raise registered capital of Vietnam's state-run debt and asset trading firm by 125 percent to 5.6 trillion dong to boost the privatization process and help the firm deal with NPLs.