State groups already eyeing stimulus package

Though they outspokenly recommended that the government not focus on a few big projects, not discriminate against small- and medium-size enterprises and non state-owned corporations when implementing the demand stimulus package, most officials of big state-owned groups and corporations took advantage of a meeting with the Prime Minister on Tuesday to ask for money for projects.

Besides Prime Minister Nguyen Tan Dung, Deputy Prime Ministers Nguyen Sinh Hung, Hoang Trung Hai and Nguyen Thien Nhan spent a whole day listening to and discussing measures to prevent economic slowdown in 2009.

Don’t force us to stabilise prices anymore

The biggest concern of officials from state-owned groups and corporations was where the $1 billion stimulus package would flow to in order to achieve the goal of preventing economic downturn, ensure stable jobs for 43 million workers, and maintain the growth rate.

Though admitting it would be difficult to change the situation if the stimulus package focused on huge projects, the Chairman of the Vietnam Textile and Garments Group (Vinatex), Le Quoc An, asked the government to help the group to pursue cancelled high-class cloth producing projects.

A representative of the Vietnam Shipping Lines Group (Vinalines) said that the capital would not be enough for both big and small enterprises, so Vinalines “asks the government to extend the debt payment deadlines for two projects to build 32 ships with the Viet Nam Shipbuilding Industry Group (Vinashin)”.

Vinalines also proposed it be granted a loan guarantee mechanism or allowed a bond issuance, or given access to sources of official development assistance (ODA) to help it build Lach Huyen Port (which was cancelled owing to Japan’s suspension of ODA) and Van Phong Port.

An official from the Vietnam Steel Group, Dau Hung, said: “Please don’t force us to continue stabilising prices because we have maintained the prices since 2002. Our reserves have dried up. We propose that the government provide more capital for us for big projects”; even though, according to Prime Minister Nguyen Tan Dung, steel is not on the list of ten products that require its prices to be stabilised, and the group can sell steel for as much as it wants.

While affirming that the Vietnam Railways Corporation had been implementing many projects well, at the same time the corporation’s General Director Nguyen Huu Bang lamented that this year the corporation had incurred losses because the sale of bed tickets had fallen.

He said that when the government delays or extends debt payments, it should remember state-owned groups as well.

An official from the Vietnam Petroleum Import-Export Corporation (Petrolimex) said that state-owned enterprises played the key role and worked side by side with the government in successfully implementing the eight groups of solutions to curb inflation.

Prime Minister Nguyen Tan Dung affirmed: preventing crisis is the task of the whole society and state-owned enterprises still have to play an important role. The government will treat economic sectors on an equal basis.

Committing jobs for everyone

Representatives of state-owned groups said that their projects would run well if they were given money from the stimulus package. They also committed to fulfill goals set for 2009, and goals exceeding those of 2008. Especially, they promised to not lay off a single worker.

Vinatex’s Chairman Le Quoc An confirmed that the industry’s top priority is maintaining jobs for textile-garment workers. The Chairman of the Coal and Mineral Group, Doan Van Kien, also confidently declared that the industry would not release a single worker.

State-owned corporations and groups all said that they would together assist the 61 poorest districts in 20 provinces listed by the government.

The General Director of the Bank for Investment and Development of Vietnam (BIDV) Tran Bac Ha said state-owned groups and corporations could contribute around VND4 trillion ($235.294 million) in two years and the government should assign each state-owned group and corporation to one poor district.

Crisis: opportunity for investment

Prime Minister Nguyen Tan Dung said: “Many forecast that state-owned enterprises would be in trouble in 2008 but actually, we did a good job. State-owned enterprises still contribute 40% of GDP. Key economic fields are still growing well. Revenue, profit, capital and tax payment are all increasing.”

However, the he asked state-owned enterprises to make detailed plans to prevent economic slowdown.

Many state-owned groups are facing legitimate difficulties. A representative of Vinalines said the maritime industry had experienced many periods of regression but never as difficult as at present. Fees to ship cargo from Brazil to China have dropped from $100 per tonne to $60 at present.

The Prime Minister called on state-owned enterprises to take advantage of the local market, bringing into full play their guiding roles.

He said economic crisis is opportunity for investment, and cited Vietnam Airlines’ purchase of four Boeing 777 in 1998 at two-thirds of the normal price.

He also said that ministries, agencies and enterprises must urgently shortlist necessary projects to submit to the government. The Prime Minister will approve and submit these to the National Assembly Standing Committee and the committee will issue resolutions permitting the boards of directors of state-owned groups to appoint contractors for these urgent projects.

Most representatives of state-owned groups and corporations asked the government to give them more autonomy in implementing projects. “It is necessary to give more power to boards of directors. Housewives can immediately buy fresh vegetables at the market, but men can’t because they have to return home to ask for their wives’ permission,” said the General Director of the Vietnam Railways Corporation. (VNN)