According to the Ministry of Finance, only 44.4 per cent of the SOEs have posted profits, while 16 per cent are unprofitable.

SOE reform started in the early 1990s. It has gone through several stages.

In the first phase (1991-1997), the number of SOEs was reduced from 12,000 to 5,000.

In the second phase (1997-2000), the situation became sluggish.

In the third phase (2001-2005), the reform process picked up momentum.

Some 3,349 out of 5,544 SOEs have now been equitised.

Even when former SOEs are equitised, the State still plays a dominant role in term of share-holdings.

I can say that equitisation is closely associated with job creation.

Over the past 15 years or so, more than 200,000 jobs were retrenched but the equitised SOEs managed to resolve the problem soundly.

A recent survey conducted on more than 2,800 workers indicated that 81.7 per cent of them were able to find jobs with higher pay within six months of their enterprise being equitised.

Most of the equitised SOEs have reported much improvement in their financial affairs.

More than 2,000 equitised SOEs have managed to settle debts of between VND2-3 trillion (US$125-188 million) without affecting the enterprise’s value.

I agree that the equitisation process has helped accelerate the development of the capital market.

Two-thirds of the companies listed on the securities markets are equitised SOEs.

It is estimated that Viet Nam now has about 2,200 big SOEs with a total capital of about VND31 billion ($1.9 million), accounting for 31 per cent of the country’s GDP.

The government plans to retain a 100 per cent State investment capital stake in 554 enterprises. The remaining companies will be equitised.

In 2007, the government plans to equitise SOEs with total assets of $10 billion.

Pham Quang Dung, deputy director general of the Viet Nam Foreign Trade Bank (Vietcombank)

Among the objectives of the equitisation process is a reduction in SOE debt and the State budget deficit. It is also hoped equitisation will attract more foreign investors and improve business performance.

Equitisation is just one of several methods used to promote the development of the capital market.

In the equitisation process, State commercial banks are not excluded. But how do we speed up the equitisation of State commercial banks? That is the big question. None have yet achieved a capital ownership of $1 billion.

In addition, there are problems with banking administration, particularly the management of information and budget systems.

Staff competency is another area that needs more attention.

In my opinion, during the equitisation process State commercial banks should keep their capital intact while issuing IPOs (initial public offerings) to raise capital.

The equitisation process could be divided into two levels. The first level is the mother bank, the second, the branches.

Nguyen Van Tuan, board president of Vinaconex

In 2000-2001 Vinaconex conducted a pilot equitisation of two member companies.

Taking on board the lessons leant, we then started equitising our remaining 30 member companies.

I’m very proud to say that after the equitisation, all the companies’ annual revenues increased by 15-30 per cent on average. The average return on equity was reported at between 35-40 per cent (some companies reported 65 per cent). As a result, workers’ wages increased by between 10-30 per cent.

Three Vinaconex companies are listed on the Ha Noi Securities Trading Centre (HASTC).

Vinaconex itself is in the process of completing required procedures for listing on HASTC.

Compared to the years before equitisation, Vinaconex’s chattered capital has increased by 50 per cent (VND1.5 trillion, about $94 million).

After equitisation, relationships within the corporation have switched from administrative to economic. The management system has been streamlined and is more efficient.

As shareholders, the workers have actively participated in management activities, including the development of the corporation’s brand name.

Doan Duy Khuong, vice president of the Viet Nam Chamber of Commerce and Industry (VCCI)

By the end of 2006, more than 3,200 SOEs nationwide had been equitised.

The number of SOEs has reduced to about 2,000 from 12,000 in 1993.

We have to admit that equitisation has accelerated the formation and development of the Vietnamese stock markets.

At this moment in time, nearly 200 companies have listed at the Ha Noi and Ho Chi Minh securities trading centres.

In 2006, the stock market accounted for 22.7 per cent of the country’s gross domestic product (GDP). By May 2007, that figure had risen to 32.8 per cent.

According to reports, performance levels in the 850 equitised enterprises have risen markedly. On average, their chattered capital has increased 23.6 per cent and their profits risen by nearly 140 per cent.

However, the pace of equitisation is too slow in major SOEs and State commercial banks.

It is time for Viet Nam to state how the equitisation process should be carried out rationally and efficiently so that the nation’s interests are protected, while attracting greater investment from within and outside the country.