ADB to Lend $300M to Vietnam to Help Reform SOEs

The Asian Development Bank (ADB) will lend $300 million to Vietnam to help the country reform state-owed enterprises (SOEs), Deputy Head of the Financial Corporation Department under the Ministry of Finance, Dang Quyet Tien said.The 25-year term loan will be directly disbursed to SOEs in 2013, Mr. Tien noted, adding that the ministry will receive applications for financial support from the firms starting February 2013. Earlier, Minister of Finance Vuong Dinh Hue said that ADB will provide $600 million worth of loans to Vietnam to help the country restructure some state-run groups and corporations.Restructuring SOEs is likely to be very expensive for Vietnam but experts deem the process indispensable in raising transparency and competitiveness in the economy.SOEs currently hold 70% of the country’s fixed assets, 20% of social investment, 50% of state-funded capital, 60% of bank loans and 70% of the official development assistance (ODA) but many of them incurred losses and operate ineffectively. Failures of two giants, Vinashin Business Group and Vietnam National Shipping Lines (Vinalines) which caused total loss of over $6 billion to the state budget, are typical examples. (Tuoi Tre – Youth Dec 5 p6)