Vietnam mulls setting up ‘super ministry’ to watch over state firms

Vietnam mulls setting up ‘super ministry’ to watch over state firms

Vietnam could set up a special committee or a ‘super ministry’ to oversee the operations of state-owned groups and corporations, an official from the Central Institute for Economic Management has said.

Establishing a ‘super ministry’ emerged as a potential solution in the quest to have an independent body to watch over the state-run enterprises and to manage the state capital, Bui Van Dung, head of the enterprise reform and development board at the institute, told Tuoi Tre (Youth) newspaper in a recent interview.

Vietnamese state-run enterprises are currently under the management of the ministries, depending on the industries and sectors they operate in.

Under this scheme of management, which has proven to have many drawbacks, the ministries have to perform two functions at a time: fulfilling their duties as regulatory bodies and managing the operations of the businesses.

Another shortcoming is that when the ministries want to issue new regulations, there may be biases if the new rules are to affect the enterprises under those ministries.

“Starting in 2011, the Central Institute for Economic Management began working to find a solution to separate these two functions for the ministries,” Dung said.

After three years of researching and studying the models from other countries, the official added, the institute came up with three plans to present to the government.

The first solution is to have the State Capital Investment Corporation (SCIC) oversee the state-run enterprises, while the second plan is to have each ministry set up a new department to do such tasks, Dung said.

“The third solution is to establish an independent body to manage the state capital at the state firms and oversee their operations,” he added.

This independent body is considered a ‘super ministry.’ Concerns have been raised as to how it could watch over some 2,000 enterprises whose stake is held by the government.

But Dung asserted that the new body will not have to do so.

“Our research shows that only 40 state enterprises, including the SCIC, are holding 70 to 80 percent of the capital, revenues, and profits of the state enterprises,” he explained.

“So the ‘super ministry’ will only manage these 40 companies.”

The ‘super ministry’ will be given many powers, including the authorization to assign and dismiss chairmen and board members of the state enterprises, Dung said. It will also reserve the decisive rights on the operation plans of the companies.

Dung asserted that the new body will help increase responsibility and transparency at the state enterprises, and thus reduce corruption.

The official admitted that the plan of setting up a ‘super ministry’ will face objections.

“We have carried out research in other countries, and this is the best solution that must be implemented immediately,” he pressed.

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