In the year 2000 there were over 10,000 SOE’s and today the number is less than 2000, yet SOE reform still remains high on the agenda of the international community.
Vietnam’s development partners, told the Government at last week’s Vietnam Development Partnership Forum, that as Vietnam further integrates into the global economy under the Trans Pacific Partnership Agreement and other Free Trade Agreements (e.g. EU- Vietnam FTA) it is imperative to take comprehensive reform measures in its SOE’s to make more room for private enterprise. In almost all FTA’s signed and to be signed the country has and must commit to further SOE reform and a reduction of the State’s role in these organizations.
Under the EU Vietnam FTA the Government must ensure that foreign enterprises can engage or have larger involvement in key sectors currently often restricted under the regulations governing foreign investment, such as Food production, beverages, fertilizers, plastic products and ceramics.
In Vietnam the State Owned banks are often directed to support SOE’s to the detriment of the Private Sector and SME’s in particular.
The resident representative of the IMF told the Government at the above Forum that the recently signed and agreed FTA’s provided opportunities for Vietnam to boost reforms to enhance overall business environment and to establish a level playing field for small and medium size enterprises as well as SOE’s thus providing equal access to markets, resources, land and capital.