Opinion
Concerns raised over a new super state agency
  • By Manh Quan | dtinews.vn | July 19, 2016 02:30 PM

Instead of speeding up the equitisation process, the Ministry of Planning and Investment has stirred up controversy with proposal to set up another unit to supervise and manage state capital and assets in state-owned corporations.

 

The super unit will directly manage the capital at 30 state-owned corporations

This super unit will directly manage the capital at 30 state-owned corporations that are working in a broad spectrum of sectors including telecommunications, transportation and industrial, insurances as well as energy and resources. The state equity at those firms by the end of 2015 was VND5,400 trillion (USD245.5 billion). The scale of the new super unit will surpass the State Capital Investment Corporation (SCIC) which is managing state capital in small firms.

The super agency concept was first raised in November, 2014 during the National Assembly's discussion about law on investment of state capital in enterprises. Many NA deputies suggested establishing a managing agency that is independent from other ministries. Some deputies said when the capital managed by one unit instead of several ministries, the statistics would be clearer and it could help boost the investment, business restructuring and equitisation processes.

However, other people have expressed worry about this super unit's inner working and monitoring methods.

For example, the SCIC was expected to be another Temasek Holdings Private Limited, an investment company owned by the Government of Singapore. Temasek manages a net portfolio of USD177 billion as of 31 March 2015 and often referred to as the sovereign wealth fund.

In reality, SCIC has failed in business. It was discovered that in 2010 and 2011, SCIC deposited VND10 trillion then claimed the profits as good business. Moreover, more than one firm complained about the SCIC, saying that they had to submit all planning for approval but the long waiting periods had killed many opportunities.

Rather than establish another agency with highly paid staff, the government should have sped up the equitisation process at state-owned firms to minimise the number of state-owned firms and trim down the state payroll.

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