-
The existing
Enterprise Law has been a crucial step in liberalizing business
rights. But, in my opinion, this law only addresses half of the
issue. This does affirm that investors and enterprises of all
economic categories have the right to invest and conduct
business in all sectors and areas not prohibited by the law. But
in practice, many good intentions of this have not been
realized, as some of its principles have not been strictly
followed. The new UEL must re-affirm that state agencies and
officials can do only what is allowed by law, whereas citizens
can do whatever is not prohibited by laws. Therefore, an
amendment shall be made in the UEL's chapter on state management
to control the behavior of state agencies and officials.
Mr Dinh Van An, President, Central Institution of Economic
Management
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 Vietfracht
has been chosen by the government to be transformed into a
holding-subsidiary model. To date, two subsidiaries have been
successfully equitized and the transformation of the rest should
be completed by end-2005. By then, the role of the State in
Vietfracht must be adjusted; with the state becoming an
investor, rather than an administrator. An investor will only
invest in potentially profitable businesses, and withdraw money
from loss-making projects.
SOEs are currently confronted with a dilemma -- they have to
operate under market mechanism, but are managed and controlled
by administrative agencies. For example, an investment decision
made by the Board of Directors of an SOE have to get approval
from the relevant line ministries, which in many cases takes a
lot of time. Moreover, for SOEs like Vietfracht, a number of
shortcomings in the holding-subsidiary model have arisen, when
the parent company is subjected to the SOE law, and yet its
equitized subsidiaries come under the Enterprise Law. As the
majority shareholder, the parent company exercises, through its
representatives in its subsidiaries, ultimate control over
strategic and business management issues. This creates a
potential conflict, as the parent company tries to achieve
targets set by the government, whereas its subsidiaries need to
implement the business strategies decided by all their
shareholders.
When they become subject to the new UEL, and allowed to do
business in multiple sectors, some SOEs may successfully expand,
and others will fail. An SOE can only survive in the market
economy if it is able to respond to the market needs, by having
smart business strategies, strong human resources, and an
efficient management structure. The state's financial resources
should be reserved for public infrastructure investment,
development of remote areas and other community needs, rather
than subsidizing loss-making SOEs.
Mr Nguyen Giang Tien, Deputy General Director,
Transport and Chartering Corporation (Vietfracht)
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It is necessary to
keep a number of restrictions for foreign investors in some
sensitive industries, which may have an impact on our national
interests, society, security and cultural identities, and
therefore reserved only for domestic investors. But we should
not -- and in my opinion, cannot afford to use these
restrictions to protect undeveloped domestic industries,
especially as we are preparing for AFTA and WTO membership.
Mr Hoang Quyet Tien, Director, An Sinh Joint Stock Company
-
 The
new UEL should not set prohibitions for foreign investors, as
this is a sensitive issue for both political and foreign
affairs, and could have a negative impact on foreign investment
inflows. I think it is better to replace the prohibition
provisions by a clear list of industries and business areas that
remain the sole preserve of the state. To minimize
administrative interference in business activities, the UEL
should include some provisions specifying the rights of the
government to issue and implement policies related to business
activities, so that they can be effectively enforced in
practice.
Mr Hoang Thanh Phu, Permanent member,
Committee of Budget and Economic Issues, National Assembly
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SOEs transforming
and coming under the UEL will enjoy four benefits. First,
conducting transactions, especially with foreign partners, will
be more convenient, as their corporate governance practices will
be compliant with international practice. Second, they will not
face discrimination in international transactions. Third, they
will able to do business in multiple sectors. Fourth, their
autonomy will be enhanced and their internal management
procedures will improve.
Mr Nguyen Dinh Cung, Director of Macro Economic Policy
Department,
Central Institute of Economic Management, and member of the UEL
Drafting Committee
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