Although the project to restructure State-Owned enterprises has not come to an end, it is said to significantly affect non-State ones, which are expected to have easier access to business resources.

Restructuring project to benefit private businesses

The project, proposed by the Ministry of Planning and Investment (MPI), is aimed at making better use of resources in SOEs, thus contributing to restructuring the economy and renovating the growth model.

Accordingly, changes should be made in the business environment, the management system, and the organization of SOEs to raise the effectiveness of resource use and operational efficiency.

Offering opportunities for private sector

However, SOEs’ leading roles should be built in an equal business environment rather than based on special preferences. Therefore, the project has made SOEs operate in accordance to the market-based mechanism, like non-State businesses.

Pham Thi Thu Hang, Secretary General of the Vietnam Chamber of Commerce and Industry, says the restructuring of SOEs offers opportunities for non-State enterprises to gain equal access to business resources including capital, technologies, and land, which used to be a barrier to their operation.

However, in the current difficult economic context, they have been confronted with various challenges. This was reflected in the increasing number of businesses being dissolved or halting operations, and difficult access to resources is said to be among the reasons behind the problem.

In addition, poor management capacity of non-State enterprises and depreciable assets are also factors limiting their access to such resources, she says.

Hang proposes helping these businesses sharpen their capacity to take advantage of expanding access to business resources.

In other words, she says, non-State businesses should “restructure themselves”.

According to a recent VCCI survey, the private sector outnumbers in categories of small businesses with 50-200 employees. This means that most non-State businesses are small-sized ones.

Despite the fact that their assets are much smaller than those of the State sector, the number of people working for the private sector has seen a sharp increase over the past five years (from 51.7 percent to 62.3 percent of the workforce).

How can the State help?

It’s no easy task for private businesses to restructure, due to their limited assets and poor management capacity.

MPI Deputy Minister Dang Huy Dong says, in addition to encouraging non-State businesses to invest in fields with high productivity, it is necessary to help them improve their capacity.

Dong says there are two main reasons leading to private enterprises’ difficulty in accessing capital.

Due to businesses’ poor management capacity, many of their projects are not accepted by banks even though they are feasible, he says, adding that bank mortgage requirements are another hurdle for non-State businesses.  

The Deputy Minister says the MPI is considering setting up an assisting agency to help the private sector access capital and improve their competitive edge.

This agency will help businesses draw up feasibility plans by coordinating with independent consultancy units of central ministries and agencies, he says.

Source: VOV