Vietnam PM wants recalcitrant state firm chiefs sacked to speed up privatization

TN News

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Prime Minister Nguyen Tan Dung has said that executives of state-owned enterprises (SOEs) who throw a spanner in privatization works meant to restructure the state sector should be sacked.

News website VnExpress quoted him as saying at a government meeting December 24 that the bosses of public firms play a key role in the task.

Economist Tran Quang A pointed out earlier, however, that they have "no motivation" to carry out the task since they fear more transparency in operations and interference from outside partners as a result of equitization would hurt their benefits.

Equitization is the term Vietnam uses to describe the process of issuing shares to partially privatize state-owned businesses in which the government will still hold the majority stake.

The process of selling shares of SOEs has slowed down significantly in recent years after more than 800 were equitized in 2004-05. The number dropped to 13 in 2012 and three this year.

Dung called for speeding up the process again next year, but said the sale of stakes should be done out with care to prevent losses.

He also called for dissolving and declaring weak state firms incurring big losses bankrupt in accordance with fair competition rules, which the country is attempting to establish to achieve market economy status.

Minister of Transport Dinh La Thang said the current tough situation and economic restructure offer an opportunity to get rid of weak businesses.

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Bankruptcies are "normal" in such times, he said.

Deputy Prime Minister Vu Van Ninh said officials are working on a draft resolution to allow state firms to sell non-core businesses at market rates, which might be issued in January.

Fear of disinvestment losses given the stock market slump is another reason for the slowing pace of privatization. 

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