State-owned enterprises, including those in the aviation sector, are under competitive pressure from private enterprises and FDI enterprises.

Regulations are not specific, do not create initiative

According to the latest report of the Ministry of Finance, as of October 2024, 106 enterprises have had their Enterprise Restructuring Projects approved by competent authorities; State capital divestment has been carried out in 5 enterprises with direct State investment (F1) with a total value of State capital of VND145 billion, recovering VND157 billion. Corporations, general corporations, and SOEs have divested capital in 3 level II enterprises (F2) with a value of VND40.9 billion, recovering VND182 billion.

In the recent scientific conference on enhancing the role of the state economic sector, many experts said that the work of restructuring and innovating state-owned enterprises has achieved remarkable results. Revenue from equitization and divestment of state capital is focused on investing in fundamental sectors and fields, applying high technology, having strategic significance and having the ability to create momentum and lead the development of other sectors and fields...

However, the management policies for SOEs are still inadequate, causing this work to be slower than planned. There are also SOEs with financial backlogs and prolonged investments, causing waste, great losses, and low efficiency.

According to the Ministry of Finance, the reason is that the scope of regulation of Law 69/2014/QH13 on management and use of state capital invested in production and business at enterprises (Law 69) does not include the content of restructuring state capital at enterprises. Meanwhile, the restructuring of state capital at enterprises is mainly carried out in the form of equitization and is regulated by Government Decrees and a number of regulations that have been implemented for a long time and are stable.

Furthermore, state capital investment (including capital addition and withdrawal) in enterprises has not been specifically regulated, and has not created the same proactive, timely, and flexible nature as capital investment in Vietnam Airlines Corporation, state-owned commercial joint stock banks, Ho Chi Minh City Urban Railway Company No. 1, etc.

During the operation of F1 enterprises, there has been restructuring of enterprises with contributed capital in the form of equitization, merger, and consolidation of F2 enterprises, but there are no regulations on the rights and responsibilities of enterprises with state capital investment towards enterprises with contributed capital. Some specific policies related to the management of state capital invested in enterprises are still scattered and not concentrated in Law 69...

Recently, the additional capital investment for Agribank and Vietcombank has been submitted to the National Assembly for approval, but the expected additional capital is still assessed as not enough for the banks to keep up with some private banks and other banks in the region.

In addition, according to the report of the Vietnam Airlines Restructuring Implementation Board, since the beginning of 2020, the financial capacity of airlines in general and Vietnam Airlines in particular has been seriously impaired. Although there has been a liquidity support package of VND12,000 billion, it is still necessary to continue to have solutions to overcome difficulties and innovate, improve operational efficiency, thereby ensuring the preservation and development of state capital invested in Vietnam Airlines.

Divestment needs to be linked to a plan to increase capital for enterprises

One of the solutions proposed by Vietnam Airlines is to drastically accelerate the restructuring, equitization, and divestment of state-owned enterprises in the aviation industry such as Vietnam Airlines, but the implementation of state capital divestment needs to be linked to a plan to increase capital for enterprises to meet the financial needs of enterprises, creating a solid foundation for enterprises to develop sustainably.

At the same time, it is necessary to build institutions and policies for the group of core and nationally branded SOEs, especially SOEs subject to international competition such as in the fields of air transport, energy, telecommunications, etc. as well as continue to improve the mechanism for monitoring and evaluating the performance of SOEs according to overall financial indicators, not following each specific project or activity program; restructure the organizational model, streamline the apparatus, innovate salary policies linked to labor productivity and performance of SOEs, etc.

Dr. Truong Van Phuoc, former acting Chairman of the National Financial Supervision Committee, suggested that it is necessary to complete the criteria for classifying SOEs and enterprises with state capital to carry out ownership conversion, restructuring, and divestment in the coming period; at the same time, review and amend regulations on management and use of state capital, investment in production and business at enterprises... to meet practical requirements.

Currently, the Government has completed the draft Law on Management and Investment of State Capital in Enterprises (amended), expected to be submitted to the National Assembly for discussion and comments on November 23, 2024. The draft Law is assessed to have many breakthrough viewpoints, "unleashing" the activities of enterprises with State investment capital.

According to Mr. Nguyen Van Mau, Member of the Board of Directors (Vietnam Oil and Gas Group - PVN), PVN has many overseas investment activities, so it is expected that the new Law will have provisions on decentralization for enterprises to proactively decide on overseas investment projects, ensuring that these procedures can be shortened to take advantage of opportunities in the best way.

Agreeing with this view, according to Mr. Nguyen Van Canh, Vice Chairman of the State Capital Management Committee at Enterprises, the draft Law has separated the management function and the ownership agency, as well as separated the management and administration functions of enterprises as well as decentralized and delegated power to enterprises to be proactive in investment and production and business activities... helping to promote the effectiveness of innovation and restructuring of state-owned enterprises.