Prime minister says state-owned giants not working hard enough

By Anh Minh   March 18, 2023 | 08:31 pm PT
Prime minister says state-owned giants not working hard enough
Prime Minister Pham Minh Chinh chairs a meeting with 19 top state-owned corporations, March 18, 2023. Photo by Nhat Bac
Vietnam’s 19 top state-owned corporations made collective VND83.17 trillion (US$3.526 billion) in pre-tax profits last year, but Prime Minister Pham Minh Chinh called the amount low given their hefty resources.

The profits were up 23% year-on-year, the Committee for Management of State Capital at Enterprises said at a meeting with the companies and the prime minister Saturday, saying the giants made nearly VND1,600 trillion (US$67.8 billion) in revenues last year, up 17.5% year-on-year.

Their contribution to the state budget rose 8% to VND191.78 trillion.

Chinh considered the contribution too low, arguing that the amount did not match the huge resources held by the state firms. He said the state-owned giants had not fully utilized their resources, as their pre-tax profit was only 75% of 2018’s numbers.

According to the committee, the total owner’s equity of the 19 state giants reached around VND1,730 trillion last year, 63% of state firms nationwide, and consolidated assets more than VND2,440 trillion, 65% of the national state business sector.

Their investment in 2021 made up nearly 25% of investments in the state sector, and 10% of all businesses in 2021, with energy firms accounting for the most.

According to the Ministry of Investment and Planning, state-owned corporations have failed to play a leading role in investment to raise the competitiveness of the Vietnamese economy.

Few new projects were launched recently as the state giants have mainly focused on resuming delayed projects, according to a ministry report presented at the meeting.

Several units are afraid of taking risks and so have tended to avoid initiating new projects, the report said. "Some units are leaving their money idle," it said.

Chinh asked the ministry to propose a new policy to encourage initiatives at state-own giants.

The prime minister is expected to issue a resolution calling for an increase in the roles and business effectiveness of state-owned giants and their contribution to the economic recovery post-Covid.

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