The slow privatization progress of state-owned enterprises (SOEs) during the 2016 – 2019 period are putting pressure on all concerned parties to complete the process in 2020, according to the Ministry of Finance (MoF).

Illustrative photo.

The task has become even more complicated given negative impacts of the Covid-19 pandemic in the first three months of 2020, causing a crash in the stock market and business stagnation in both Vietnamese and global economies.

Between 2016 and March 2020, the authorities have approved privatization schemes of 174 SOEs with a total aset value of VND443.12 trillion (US$18.91 billion), of which state capital is valued at VND206.74 trillion (US$8.82 billion). Of the figure, only 36 are in the list of 128 SOEs subject to privatization under the prime minister's instruction in the 2017 – 2020 period, or 28% of the plan.

As a result, the remaining 92 are supposed to complete the privatization process until the end of 2020, but in March, none of them started the process, said the MoF.

Notably, SOEs subject to privatization in Hanoi and Ho Chi Minh City make up 54% of the total, including 13 in Hanoi and 38 in Ho Chi Minh City; six managed by the Committee for State Capital Management (CSCM), four of the Ministry of Industry and Trade, and two of the Ministry of Construction.

In March, VND308.5 billion (US$13.17 million) was raised through the divestment of VND213.4 billion (US$9.11 million) in book value of two SOEs, taking the divested amount in book value to VND397 billion (US$16.94 million) in Q1, and the proceeds to VND772 billion (US$32.95 million).

Overall, SOEs divested a total of VND25.16 trillion (US$1.07 billion), raising VND171.84 trillion (US$7.33 billion) from 2016 to March 2020.

To speed up the privatization process, the MoF said it is vital to perfect the legal framework for the operation of SOEs subject to privatization and divestment.

More importantly, provinces/cities and SOEs involved in the process must show stronger commitment to realize the PM’s instruction for SOE restructuring.