The National Assembly’s Economic Committee’s chairman Nguyen Van Giau told a National Assembly Standing Committee meeting last week that the draft of this law, currently under discussion, should allow the establishment of an independent agency under the government’s control to manage and supervise all state capital in enterprises.

“This solution will help create a breakthrough in managing state-owned enterprises (SOEs), thereby separating state bodies’ management function from their function as enterprise owners,” Giau said. “Such bodies should focus on making mechanisms and policies for enterprises, rather than doing business. They also should transparently access the effectiveness of enterprises’ usage of state capital.”

However, the law’s drafters proposed that the existing model for state capital ownership in enterprises be maintained as currently prescribed in the draft law’s Article 5 on representatives of state capital ownership.

Under this, the prime minister, ministries, ministerial-level agencies, government agencies and people’s committees would continue exercising some rights to and responsibilities for representing state capital ownership in enterprises that they establish.

“The removal of the current model will mean a set-back in state capital management, because it will create a new administrative apparatus,” said Nguyen Hanh Phuc, Chairman of the National Assembly Office.

But Giau argued that “The maintenance of this model will not help remove chronic weaknesses in SOE management.”

For example, when the Vinashin scandal was uncovered several years ago, the Ministry of Transport, which manages Vinashin, was not held responsible.

Many other National Assembly members have echoed the committee’s view, saying that the existing model must be removed as soon as possible.

Deputy Minister of Finance Nguyen Van Hieu said that the ministries of Planning and Investment and Finance were weighing the pros and cons of three scenarios for a new model.

“We are considering whether we should establish a ministerial-level body or a department in charge of SOEs’ capital and assets. We also wonder if we should maintain the existing model or not,” Hieu said.

“If we maintain the existing model, society will not be able to advance, because state capital largely comes from people, while it is being used wastefully by SOEs. At present, all ministries have their own enterprises which compete with one another. This will reduce the economy’s competitiveness globally,” said the National Assembly’s Council of Ethnic Affairs’ Chairman Ksor Phuoc.

“I totally with the Economic Committee’s proposal that there must be an independent body in charge of representing state capital in enterprises,” he said.

National Assembly vice chairwomen Tong Thi Phong and Nguyen Thi Kim Ngan also gave the thumbs-up to the proposal.

“There should be an independent body that can help overcome the weaknesses of SOEs. However, what model should be used will need further discussion,” Ngan said.