Arab Today, arab today vietnam\s state sector a \cancer\ in economy
Last Updated : GMT 14:20:32
Arab Today, arab today
Arab Today, arab today

Vietnam\'s state sector a \'cancer\' in economy

Arab Today, arab today

Arab Today, arab today Vietnam\'s state sector a \'cancer\' in economy

Hanoi - AFP

Opaque, corrupt, inefficient -- Vietnam\'s state-run companies are used to criticism, but now they stand accused of creating a systemic economic crisis which the communist regime cannot fix. More than 25 years after it started a transition towards a market economy, the government is trying to unpick a web of state-owned firms, which have a stranglehold on the economy and are proving stubbornly resistant to reform. \"The public sector is the Communist Party\'s biggest mistake,\" said Hanoi-based economist Nguyen Quang A, adding that the \"long illness\" of the public sector was causing a broader economic crisis. \"The economy is in its worst situation since 1986,\" he told AFP, referring to a major economic crisis which precipitated free-market reforms. The state sector is \"the spoiled child of different interest groups (who) do not want to reform the sector to protect their power... They are seeking to maintain its status at any price.\" Despite a string of interest rate cuts aimed at stimulating the economy, Vietnam\'s annual growth slowed to its weakest pace in 13 years in 2012, and resurgent inflation is seen as limiting the scope for further stimulus. Vietnam has more than 1,300 state-owned enterprises (SOEs). They account for 45 percent of the country\'s total investment, use 60 percent of commercial bank loans, and absorb some 70 percent of development aid. But they contribute just 30 percent of annual GDP growth according to figures from the Ministry of Planning and Investment made public in November. Some analysts argue that if one counts SOE subsidiaries and so-called private enterprises which are in reality controlled by top government officials, the state sector accounts for 70 percent of Vietnam\'s total economic activity. But the sector is not in good health. SOEs have racked up some $61 billion of debt which represents more than half of total public debt in Vietnam. Several of the SOEs have already collapsed in spectacular fashion, including shipping giants Vinashin -- which ran up $4.4 billion of losses -- and Vinalines, which has defaulted on payments of some $1.1 billion. Their downfalls have been used in particular by detractors of Prime Minister Ngyuen Tan Dung -- seen as a reformer when he took office in 2006, but now roundly blamed for the country\'s economic woes. Dung championed the SOEs as a path to economic prosperity, citing the example of South Korea\'s Chaebol. Experts say the SOEs have become expert at hiding their debts, have incomprehensible strategies, hazardous investments in non-core sectors which are cunningly designed to circumvent government regulations. The top officials running the companies frequently flaunt lifestyles incompatible with their official remuneration, fuelling public anger at the corruption, inefficiency and waste. \"The crisis of public debts is an economic drama that has lasted five years already and is linked to the authority of the Communist Party,\" said Quang A. In the last few months, rumours have been multiplying about the weaknesses of a string of other major SOEs. The official media has singled out Electricity of Vietnam (EVN) and the coal giant Vinacomin as the next heavyweights heading for a collapse, only kept alive on a life-support drip of official favours and credit. Some 30 of the 85 largest SOEs have accumulated debts between three and 10 times larger than their capital according to Minister of Planning and Investment Bui Quang Vinh, speaking in December. \"People intentionally violate the law purely for personal interest,\" he said, bringing up massive investments by several SOEs in sectors they were not authorised to operate in. Scapegoated for the sector\'s broader collapse, the ex-head of Vinashin has been sentenced to 20 years in prison, and the top officials at Vinalines are in prison awaiting trial. No systemic solution has been proposed to avoid repetition of their failures. Yet the Vietnamese model, a strange mix of \"market economy with socialist orientation\" has been discredited both at home and overseas. \"Public enterprises have to beg for state subsidies to survive -- they have become a cancer in the economy,\" said one Vietnamese parliamentary on condition of anonymity. \"Reform is too slow because it faces strong opposition from leaders and company directors. Billions of dollars have been lost. But hardly anyone has been brought to justice.\"

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today vietnam\s state sector a \cancer\ in economy Arab Today, arab today vietnam\s state sector a \cancer\ in economy

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today vietnam\s state sector a \cancer\ in economy Arab Today, arab today vietnam\s state sector a \cancer\ in economy

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Malaysia Airlines picks new CEO

GMT 12:54 2017 Saturday ,21 October

Malaysia Airlines picks new CEO
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Residents get glimpse of Raqa in ruins

GMT 07:10 2017 Saturday ,21 October

Residents get glimpse of Raqa in ruins
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Sweden to get biggest car factory

GMT 14:10 2017 Friday ,20 October

Sweden to get biggest car factory
Arab Today, arab today Actress Mona Zaki praises husband’s role

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 09:56 2017 Friday ,20 October

Privacy Groups Warn of Perils

GMT 08:04 2017 Thursday ,19 October

Second US judge orders freeze

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday