State-run enterprises make an important contribution to ensuring great balance of economy, controlling inflation, firmly maintaining macro-economic stability, boosting economic growth

Member of Party Central Committee, Chairman of the State Committee for Management of State Capital at Enterprises
Monday, January 22, 2024 10:14

Communist Review - Ensuring the great balance of the economy, inflation control, firmly maintaining the macro-economic stability are the thorough-going goal in management and operation of the economy in Vietnam. This is the prerequisite condition for the sustainable economic developoment. With its position and role, the State-run enterprises make an important contribution to reaching that goal.

Installing the wind electric fan in Hai Ohong _Photo:

The role of the State-run enterprises in ensuring the great balance of the economy, in controlling inflation, firmly maintaining macro-economic stability

In Vietnam, the State-run enterprises have occupied the key role and are the important material force of the state economy, contributing to boosting the economic develppment and implementing the social progress and equality. In the context that the domestic and world situation has seen a lot of recent changes, the State-run enterprises have made an important contribution to ensuring the great balance of the economy, controlling inflation, taking the lead in stabilizing the product, service prices, ensuring the balance of the goods supply and demand, contributing to stabilizing society. This remark has been reflected through the role, position and contribution of the block of 19 economic groups, corporations of the State with the State Commission for Management of State Capital at Enterprises (hereafter called in short Commission) represented as the owner.

With the average asset scope of enterprises with state capital being VND 4,500 billion for each enterprise, the total equity occupies 63% and the total property occupies nearly 65.3% as compared to the whole State-run enterprises; the operation in the key sectors and areas of the economy, the enterprises under the Commission have supplied many products to the macroeconomy and made a lot of contributions to ensuring the great balance of the economy, ensuring the essential requirements for production and livelihood in terms of energy, food, telecommunications infrastructure, 19 economic groups and corporations representated by the Commission as the owner have made specific contributions as follows:

Firstly, to ensure energy security: The economic groups operating in the energy field have produced, exploited and supplied the important products for the economy, such as electricity, aol, gas, petrol and so on. The Vietnam Eelctricity (EVN) has started and perfected many power transmission projects; may large-scale power source projects (the expanded Hoa Binh power hydroelectric plant, the Yaly power hydroelectric plant, the Thai Binh thermo power plant, the Vinh  Tan thermo power plant and so on), overcome the state of power shortage, the electric overload, ensure the safe, continuous and stable power suplly for the security requirements of the people, production and business of enterprises, contributing to ensuring the national enegry security (1). The Vietnam National Petroleum Group (PETROLIMEX) and the Petro Vietnam Oil Corporation (PVOil) are active  and proactive, reflecting the leading role to ensure the supply source, to stabilize the prices and not to break the petroleum and oil supply chain before the petroleum and oil market turmoils in recent time (2); the Vietnam Oil and Gas Group (PETROVIETNAM} plays an important role in searching, exploring, exploiting and processiong oil and gas (3); the Vietnam Coal-Mineral Industry Group (TKV or Vinacomin) have boosted the coal and mineral mining to meet the requirements of the economy.

Secondly, to ensure food security: The Northern and Southern Food Corporation (VINAFOOD) which has carried out well the assigned task on stabilizing the prices has always prepared its source to meet the requirements of the people through the system of retail enterprises, super markets, contributing to ensuring food security; ensuring the items of goods of good quality and stable prices for the market. The agricultural and forestry corporations have made a lot of progress in doing business in food, in planting, processing and producing rubber, coffee, in producing high-quality rice, contributing to developing the agricultural sector, creating jobs and income for labourers.

Thirdly, to develop the national communication infrastructure: The economic groups, corporations have made an important contribution to building and developing the infrastructure system, creating an impetus of development for the sectors, areas and the economy through the promotion of implementing the key projects, particularly the key projects in the aviation area.

Fourthly, to develop telecommunication infrastructure: The Vietnam Posts and Telecommunications Group (VNPT) and the MobiFone Telecommunications Corporation (MobiFone) have reflected clearly their role of leading in digital transformatkion, in building the digital infrastructure for the Government agencies and many localities, organizations and enterprises; have developed and applied successfully the products of digital transformation in serving customers, electronic bills; applied cloud computing platform and implemented the big data, supplied services of Digital Wallet; boosted the deployment of new infrastructures to expand the 4G coverage area, the optical fiber transmission, inmprove the network quality, to prepare for 5G network and so on.

Fifthly, to ensure the supply the transport servies: In the context that the COVID-19 pandemic had developed complicatedly, the transport enterprises (aviation, railway, navigation) have organized the air flights, the cargo trains in service of the economy and social life, of the anti-COVID-19 prevention campaign, including the health masks, anti-pandemic uniforms, equipment, medical materials and so on. In addition to it, the Vietnam Airline (VNA) has also exploited the journey-home flights, the volunteer isolation, contributing to ensuring the freedom of trade, maintaining the production and business activities, especially export-import of commodities.

Sixthly, to ensure the supply of input production materials important to the economy: The economic groops, corporations operating in the industrial area producing chemincals, steel, fertilier to increase production value, to supply the coomodities products for the economy in terms of basic chemicals, plant proptection products, fertilier, batteries, steel and so on.

In general, besides the great role in production, product supply, important services for the economy, the State-run enterprises in general and 19 economic groups and corporations represented by the Commission as the owner have also played an important role together with the State in ensuring security, defence, carrying out the policies on social security, combining the economic developmentm with the guarantee of national defence, security and national sovereignty. In a number of points of time, especially in the CODIF-19 Pandemic, even though they had to face with innumerable difficulties, many enterprises had expressed their important role in contributing to ensuring food security, in serving the policy on regulating the economy, in stabilizing the macroeconomy, stabilizing the prices, such as the support to the reduction of power, water prices, the telecommunications charges; in supplying the free food packages in order to ensure the State’s policy on social security for the pandemic victims; in supoporting to take the people from the pandemic centres back home. The investment activities of the State-run enterprises in the sectors, areas, the key, important places of the economy have helped reduce the investment from the State budget in executing the important economic-social development investment projects of the country, contributing to implementing the process of restructuring the economy in linkage with the renewal of growth model.

To continue affirming posiition and role of State-run enterprises

The difficulties and challenges posed to the activities of the State-run enterprises:

First of all, it is the thinking, the concept of the role and position of the State-run enterprises, especially of the position of the State-run enterprises in fulfilling their leading role in the State-owned economy, the hand-over of the right to autonomy of the State-run enterprises, the use of the State-run enterprises as an instrument to regulate the economy.

Mechanism and policy of management for the State-run enterprises have still got a lot of inadequacies but they are yet to bring into full play the proactiveness in production and business activities of the State-run enterprises; a number of institutions of management, distribution and use of the resources in the State-run enterprises are no longer suitable; the system of criteria for assessment of the State-run enterprises is not yet enough, the State-run enterprises are yet to really have the right to autonomy in accordance with the market mechanism; the stipulations on the State-run enterprises have been scattered in a lot of legal documents, promulgated in different places, prepared by different agencies, resulting in having a lot of definite impediments and overlappings. The institution was slowly perfected, amended and added so as to remove impediments to push ahead the process of equitization, devestment of the State capital at the enterprises. Many policies and laws on the State-run enterprises and the solutions of enforcement in the recent stage have mainly focused on accelerating equitization and devestment; the handling of inediquacies, negativities and wrongdoings in carrying out the restructure and investment of the State-run enterprises in the previous stage.

The State-run enterprises in mobilizing capital, expand the scope, improve quality in investment, business, development and expand the market, diversify products and services so as to raise the competitiveness and make further contributions to the economic and social development. This has led to the consequences that in spite of the fact that the State-run enterprises are holding, managing and using the large resources of the country, they are yet to mobilize and concentrate these resources for the strategic investment, for the goals of priority of development of the State-run enterprises in particular and of the country in general.

The stipulations on salary and other treatment regimes for the managers of the State-run enterprises are yet to conform to the practical operation of the enterprises, yet to create the material impetus for the managers and labourers at the State-run enterprises who have contributed to increasing profits to the enterprises; at the same time, it is yet to attract effectively the high-quality human resources.

In these difficulties and challenges, to let the State-run enterprises continue to affirm their role in implementing the goals of ensuring the big balance of the economy, of controlling inflation, firlmy maintaining the stability of macroeconomy, boost the economic growth, it is necessary to concentrate on the following key orientations and solutions:

On the part of the State’s management

Firstly, to propagate and raise the awareness of the position and role of the State-run enterprises, especially in ensuring the big balance of the economy, controlling inflation, firmly maintaining the stability of macroeconomy, boosting the economic growth. To promote the advantages, mobilize and exploit effectively the resources that the State-run enterprises are managing and using so that this area can be able to really express their leading role in the key economic sector, with the spill-over character for the economy and other economies. The development of the State-run enterprises has to be closely associated with the implementation of the development strategy of sectors and areas of the economy.

Secondly, to perfect the mechanism and policy in the direction that the State-run enterprises are guaranteed to have the right to autonomy in accordance with the market principle, to operate openly, transparently and effectively. To perfect the mechanism of assessing the effectiveness of the State-run enterprises.

To limit, to the maximum, the direct administrative interference in the management and operation of the enterprises; to implement the vigorous decentralization in exercising the rights and responsibilities of the representative of State owners in combination with the regime of all-round inspection, supervision and assessment. To determine clearly the function of the asset owner, the State’s capital with the function of the State’s management, to clearly devide the right of representing the owner of the State’s capital with the implementation of the task of production and business development, at the same time there has to be the harmonious linkage in the relationship between the State and the State-run enterprises. Accordingly, the State creates the ecosystem, business envivonment in conformity with the principle of the socialist-oriented market economy; the State-run enterprises are proactive in operation, equal competition with responsibility, strive hard with determination to execute the position, role, mission to match with the held resources, to use effectively the ecosystem created by the State.

Thirdly, to accelerate the arrangement and renovation of the State-run enterprises. To remove difficulties, boost the equitization and devestment of the State’s capital at the State-run enterprises.

On the basis of rearranging the State-run enterprises block in accordance with the “Criteria to classify the State-run-enterprises”, the enterprises with the State’s capital to execute the transfer of ownership, rearrangement, devestment in the 2021-2025 stage, in which to focus on keeping the key and necessary areas; the important places in terms of national defence, security, the areas that enterprises belonging to other economic sectors have not made any investments in. To diversify the rearranged modes, transfer the ownership of enterprises as stipulated by the law (to maintain the proportion of ownership of the State, merger, equitization, devestment of the State’s capital are an important solution to ensure the resources of public investment).

Changing from the imposition of administrative order on equitization, devestment to the implementation in accordance with the principle and signal of the market on the basis of ensuring openly, transparently and effectively so as to restruccture the State-run enterprises. It is necessary to link the development of the State-run enterprises with the implementation of the strategy of developing the sector and areas of the economy. To determine clearly the key sectors and areas that need the presence of the State-run enterprises in conformity with the orientation of sustainable development of the country.

Fourthly, to promote and support the enterprises to develop and expand investment and increase the scope and effectiveness, but it needs the key selection to create the spill-over, to ensure the State-run enterprises to firmly maintain the key position and to be an important material force of the State’s economy. Especially, to create conditions for developing a number of the large-scale State-run enterprises, having the “trail-blazer” role, to develop a number of the main economic sectors, to lead the enterprises of other economic sectors.

To increase investment for innovation and the scientific-technological application, to raise the effectiveness of activities so that the State-run enterprises can be able to carry out their position, role, trail-blazing and leadership. To perfect the mechanism and policy so as to promote the mechanism of coordination and cooperation among the State-run enterprises and between the State-run enterprises and the enterprises of other economic sectors. To develop the joint venture and linkage among the State-run enterprises through the Commission so that from here, to create the already-existing strength foundation, at the same time to mobilize effectively the resources of enterprises.

To promote the renovation of the enterprise governance in the State-run enterprises in accordance with the international principle and standards; to perfect the regulations on recruitment, training, fostering and appointment of managers of the State-run enterprises in conformity with the political institution, the market mechanism and to meet the requirements of international integration; to renovate the mechanism of salary, bonuses, remunirations of the labourers, the managers, to operate the State-run enterprises in a reasonable way, with the high competitive character in combination with labour productivity and effectiveness in production and business.

Fifthly, to create ecosystem for the sustainable development of enterprises (the important point is the ecosystem of the State-run enterprises) so as to link with the foundation industrial production.

Importance is attached to building the powerful national industry, the foundation industries need to form the value chains on the basis of linkage of the sustainable ecosystem of the State-run enterprises to help reduce the costs, to mobilize and use effectively all the deployed and supported resources among the enterprises; to contribute to participating deeper in the global value chain. To form and develop the regional logistic centres (5) in connection to the clusters of industrial linkages invested by the State/State-run enterprises so as to ensure the competitiveness of goods and through that, to support and develop the foundation industries.

Sixthly, it is necessary to change the working method, to be proactive in implementing fully and effectively all the rights of the owners at enterprises in accordance with the legal provisions and international practices; there is no interference in the process of operation, business governance at enterprises, Together with it, there is an effective mechanism to carry out the supervision of the activities of the representative offices of the owners, to build the orientation for development and heighten the effectiveness of the activities of the State-run enterprises.

In which, it is necessary to make clear the Commission’s role as the owner of the State’s capital for the State-run enterprises. The Commission is not the special State managerial agency; it does not issue the legal documents, mechanism and policies. That is why, when dealing with the difficulties and impediments relating to mechanism, policy, the law needs to solicit opinions of the State managerial agencies; in many occasions, the answers come late and the time is prolonged. A number of the legal provisions in exercising the authorities of the representative offices of the State’s owner and in the operation of the State-run enterprises have still got inadequacies or are yet to be clear, synchronous, unified, but they are slow in amendment and addition, thus making an impact on the effectiveness of carrying out the Commision’s tasks.

On the part of governance of enterprises

Firstly, the State-run enterprises are proactive in renovating the model of governnance of enterprises in the direction of modernity to meet the requirements of the market economy and international integration. They have the plan on selecting and appointing a contingent of qualified managers who have the experience in management of the regional and global class; at the same time,  favourable conditions are created for their working, promoting all of their knowledges, experience and talents for the development of the State-run enterprises; a mechanism on the reasonable salary and bonuses for labourers is bu klt, thus creating a material and spiritual impetus to attract the high-quality human resources.

Secondly, to accelerate the digital transformation, to take poart in the strategy of developing the digital economy, the digital society, the green economy, the circular economy in accordance with the suitable roadmap in order to raise  productivity, quality, effectiveness and competitiveness of enterprises.

Enterprises need to build and deploy the solutions so as to maintain the activities of safe production and business, without having a break in production chain, ensuring the life of labourers in all circumstances. To shift investment in the direction of greening in the direction of sustainable development. To study the investment, deploy the projects in accordance with the areas and tendencies of developing new technologies of the world.

Thirdly, to be proactive further in integration and expansion of international market, taking the domestic market as the important place to be served as the springboard to reach out to integration, to link the regional and global value chains. To participate in developing the areas of high-tech contents, of novelty, having the capacities of occupying the domestic market and reaching out to the regional and world markets./.


(1) The power plants under the EVN, the PVN and the TKV have occupied about 87% of the total output of electrical energy to be supplied to the society. Especially, the EVN has ensured the power transmission for the whole national grid; has implemented the dispatch of electrical energy; has distributed electrical energy nationwide; has managed the operation of the rural power grid, the large-scale, great-capacity power plants, in which there are the multi-purpose large-sized strategic power plants, having a specially important significance in the economy, society, defence and security.

(2) Petrolimex and PVOil have occupied 72.5% of the retail market nationwide (Petrolimex has occuoied about 50%, PVOil, about 22.5%

(3) In the 2016-2020 stage, the PVN had exploited approximately 121.14 million tons of oil, maintained to supoly 100% of market share of dry gas and 70% of LNG market share nationwide, meeting about 70% of petroleum and oil requirements, 70%-75% of nitrogenous fertilizer for agricultural production

(4) In the 2016-2020 stage, TKV increased the coal mined output by 180.3 million tons; consumed about 189.5 tons of coal, 5.78 million tons of aluminum, 60.600 tons of broken brass, occupying the governing market in the coal and mineral mining area nationwide

(5) According to the preliminary report of 46 out of 63 provinces and cities, in 2022, the whole country had 69 logistics centres, concentrated in a number of industrial zones. However, as judged by experts, Vietnam has still lacked many modern, large-scale logistic centres, so it needs the change of the traditional logistics centres to the new-generation logistics centres with the application of 4.0 technology

This article was published in the Communist Review No. 1005 (January 2023)