According to Phong, the economy should be restructured according to the two-level economic structure model, with the upper level made up of strong multi-owner economic groups and the lower level made up of small- and medium-sized businesses. Businesses on the same level or on both levels should have close links.

The “groups” mentioned are multi-ownership, many of them are joint stock companies, with the participation of not only the state but also the non-state sector, says Phong, adding that this will ensure the effectiveness and the competitiveness of these groups in the future.

Phong says state economic groups should only focus on certain areas which private businesses are not able or not allowed to engage in.

Dr. Tran Tien Cuong, from the Central Institute for Economic Management under the Ministry of Planning and Investment, proposes reviewing the projects undertaken by state-owned businesses to identify what areas they really should invest in.

Businesses, meanwhile, need to check how they have invested their money and used their human resources, to control the investment allocated by the state owners, says Cuong, adding that, state owners need to identify the major fields for each business.

As a financial expert, Dr. Vu Thanh Tu Anh, Director of the Fullbright Economic Teaching Programme, recommends allocating resources properly to each sector’s advantage and creating a highly competitive atmosphere for state-owned businesses. In every economy, competition is meant to be with both foreign and domestic businesses and this is the key to success, says Anh.                                           

Restructuring State-owned groups need more open mechanisms for the groups’ leaders, so the Chairman of the Administration Board has the right to make decisions on most of the State capital share. Experts from the private sector should be nominated as executive directors who can implement management contracts and operate in line with the Government’s instructions and the Administration Board’s guidelines.

Expert consultant Tran Bat, who is General Director of the Invest Consut Company, says that it is meaningless if a representative from the Administration Board takes responsibility to manage the use of State capital. In such case, it is impossible to clarify the responsibility of the manager who also shares business profit. Therefore, the Administration Board should not get involved in management work. It should only control business operations but not manage the use of State capital. In other words, the Administration Board only has the right to monitor business operations, but not inspect national assets. National assets should by managed by other agencies, which do not belong to the Administration Board, states Bat.

In addition, all management work must be carried out independently to avoid the situation that the governing body is in charge of making investment decisions and inspecting business operations.

More discussions are needed to draw up the development strategy for State-owned groups and businesses. However, if the operational goals and responsibilities of these businesses are not clearly defined in combination with the national development goals, the management work on their operations will not prove effective as expected, especially after July 1. This is when State-owned groups and corporations were asked to change into one-member limited companies. Accordingly, leaders of these businesses have more rights to self-determination than at present.