Viet Nam seeks European expertise to improve SOE’s financial oversight
Ha Noi - Viet Nam’s Government is preparing to strengthen corporate financial discipline, especially for the State-owned enterprises (SOEs), according to senior officials of the Ministry of Finance currently in a fact-finding mission in Europe.
Vice Minister of Finance Tran Van Ta, head of the two-week mission, and Mr. Pham Dinh Soan, head of the Government Financial Department for Enterprises, are holding discussions on the development of the management information system (MIS) with the Federal Bank of Germany. This meeting followed the talks they held last week with their counterparts at the Ministry of Finance of the Netherlands.
A pilot MIS has been recently established, with assistance from the UN Development Programme (UNDP), under the Ministry of Finance (MOF) to strengthen the Government’s financial oversight of state capital and assets in enterprises. The MOF’s visit is exploring the possibility of scaling up the system nation-wide.
The government has carried out three major SOE reform campaigns since 1991 to cut the number of SOEs from over 12,000 to around 5,600, and targets to cut 3,000 more by 2005. This move aims to reduce the State's burden of subsidizing unprofitable enterprises and to focus on healthy and important ones.
“A good management information system is crucial for tracking SOEs performance, improving financial discipline, corporate governance and accountability. Since credit will be linked to performance, this will encourage SOEs to reform”, said UNDP Resident Representative Jordan Ryan. “Viet Nam needs to manage its public spending through the existing SOE more efficiently and effectively to promote better use of resources”.
Poor management has left a number of the existing 5600 SOEs with gross debts totalling $ 12.5 billion by the end of last year, according to official statistics.