Prime Minister: Administrative intervention in State-owned enterprises distorts the market

Speaking at a group discussion on November 23 on the revised Law on Management and Use of State Capital Investment in Production and Business at Enterprises, Prime Minister Pham Minh Chinh spoke about the state-owned enterprise management model. There are many changes according to historical periods and requirements set in each context.

He said the State used to have Corporations 90, 91 and many large state-owned corporations and enterprises, then separated state management and capital management like today. “The models up to now are still unstable because the country is in the process of development. The economy is transitioning, the scale is still small and it is not possible to shape a very suitable model,” he said.

However, the Prime Minister emphasized that the way businesses operate must follow the laws of the market, the laws of value, supply and demand and the laws of competition. He acknowledged that intervention by administrative measures distorts the market and is contrary to the laws and development thinking of the economy. He said that business management must be consistent with market mechanisms and international integration in Vietnam’s specific conditions.

Therefore, when amending this Law, the Government proposed a business plan that assigned the Board of Directors responsibility for its decisions. This helps businesses take responsibility for their own resources and business investment decisions, promoting the efficiency of capital resources of corporations and state-owned enterprises.

“The Board of Directors is responsible, why is the Government responsible for their business plans?” he asked. In addition, the State Capital Management Committee only promotes its role in guiding and applying inspection and control tools to prevent loss, waste, and negativity in enterprises’ business decisions.

The Board of Directors is responsible for preserving and developing capital, and is responsible before the law for its decisions. To do this, the Prime Minister emphasized that the legal tools must be clear so that officials can be creative and determined to do it, so that they are not afraid.

The highlight of the bill, according to the Prime Minister, is “the overall assessment, not the assessment of each specific thing”. Citing the story of private enterprises today, the Prime Minister said that it is not necessary that everything must be bid, but they still do it right and effectively. “We bid for everything, but in the end we all have green and red pieces and are constantly disciplined. We have to draw out the rules. Why don’t the private sector bid? If you have the ability, you can do it, you don’t have to ask for help.” pierced,” the Government leader said.

Therefore, the Prime Minister said that when evaluating state-owned enterprises, it is necessary to consider the overall value they bring, not evaluate each job individually. Ten decisions are made, maybe 7 or 8 are right and one or two are wrong. According to him, this is the reality in business: “you have to win, you have to lose, you can never win”. With this Law project, he believes that it is necessary to research and evaluate the appropriate process, possibly by year or by term because the results do not come in a day or two.

The Prime Minister requested the Finance and Budget Committee to carefully review the Law project, in the spirit of decentralization, management in accordance with market rules and design tools to avoid corruption, negativity and waste; Encourage innovation and create space for staff to work.

Delegate Pham Duc An, Chairman of the Board of Members of Agribank, said that if we go into managing each enterprise’s behavior, it will lead to officials only being afraid of mistakes and responsibility. The state is always “afraid to let go”, defining the narrowest authority for ease of management. “This leads to loss of initiative and poor competitiveness. Meanwhile, violations at state-owned enterprises still occur, leaders are punished and money is still lost,” the Indian delegate said.

However, the Indian delegate said that the draft still lacks mechanisms for state-owned enterprises to promote their leading and pioneering role, dare to seize opportunities, and dare to invest in areas that private individuals do not dare to do. According to him, for these businesses, the State should not place too much emphasis on simple profit goals. Instead, their role is to explore new value for the economy, bringing breakthroughs in the fields of digital technology, supporting industries, and import substitution.

“There are fields where Vietnam can currently produce only one bolt. Therefore, we need to have state-owned enterprises that implement state policy goals, have a strategic role with a long-term orientation. very clear,” the delegate suggested.