The quality of human resource management plays a decisive role in the restructuring of State-owned enterprises (SOEs), officials said.

Financial policies should be accompanied by better management strategies to ensure sustainable development for SOEs

Dinh Quang Tri, Deputy General Director of Electricity of Vietnam Group (EVN), said at a meeting that financial policies are only one factor in the success of restructuring.

Deputy Minister of Finance, Tran Van Hieu, said that mass recruitment without focus on quality has resulted in a substandard labour force at many SOEs.

“Despite having an abundant pool of human resources, our country still lacks qualified highly skilled labour, especially competent executives,” Hieu said.

He suggested that more attention be paid to ensuring quality of human resources for SOEs at all levels.

“The recent crises at some SOEs was a result of incompetent leadership and inefficient management. Financial policies should be accompanied by better management strategies to ensure sustainable development for these enterprises,” he added.

Dang Van Thanh, Chairman of Vietnam Association of Accountants and Auditors (VAA), said the corruption at Vietnam Shipbuilding Industry Group (Vinashin) and Vietnam National Shipping Lines (Vinalines) was the result of incompetent administration by the companies' leaders. This, he said, was a result of lax oversight by Government agencies.

As part of the SOE restructuring process, Tran Van Hieu emphasised the importance of capital withdrawal from non-core business activities.

The former Minister of Industry and Trade Truong Dinh Tuyen, stressed the need to sell off unprofitable businesses as soon as possible to prevent further losses.

The former Minister of Planning and Investment, Tran Xuan Gia, proposed that unprofitable projects with Government investment should be sold, even at low prices, so the capital can be used for sound investments.

However, Dinh Quang Tri, said that the Ministry of Finance does not allow the sale of unprofitable enterprises at rates lower than the 'book value'.

Dr. Vu Dinh Anh, an economist, worried that it would be difficult to find investors for inefficient State-funded projects and State-owned enterprises.

Dr. Le Xuan Ba, an Associate Professor and Director of the Central Institute for Economic Management (CIEM), said Vietnam should follow other countries in decreasing the  proportion of contributions by SOEs to the GDP to between 4%-5%, instead of current 37.3%.

Source: Dtinews