State-owned corporations and groups in Vietnam continue paying high salaries, despite incurring losses.
According to Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, the average salaries of those working at state-owned enterprises (SOEs) was estimated at VND3.7 million (USD176.19) per month in 2010, 13.5% and 38% higher than those working in the foreign-invested and private sectors.
State-owned corporations and groups in Vietnam continue paying high salaries, despite in
Board members, general directors, directors of state-owned corporations and groups earn some VND30-40 million (USD1,428-1,904) per month, 2.5 times more than the average state-sector employee.
A number of SOEs pay their chairmen and directors VND70-80 million (USD3,333-USD3,809) per month, despite the State enforced ceiling for these positions of VND50 million (USD2,380) per month.
The Ministry of Labour, Invalids and Social Affairs said the salary disparity between managers in more efficient SOEs is increasing.
Directors for companies in less lucrative sectors such as forestry, coffee, garments and textiles, paper, sugarcane and railway transportation have an average month salary of VND15 million (USD714.3) per month, while those employed in petroleum, posts and telecommunications, aviation, coal, power, finance, banking and construction have average salaries of VND40 million (USD1,904) per month.
Staff working for SOEs in lucrative sectors earn an estimated VND8.14 million (USD387.5) per month, 3.35 times more than those working in less value-added sectors.
However, a number of corporations and groups offering some of the highest salaries to their staff are actually some of the country’s largest loss-making enterprises, including the Electricity of Vietnam Group (EVN), Vietnam National Shipping Lines (Vinalines), Civil Engineering Construction Corporation No.1 (Cienco1), Military Petroleum Corporation (Mipeco) and Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO). By the end of December 31, 2010, the total losses of these firms reached up VND26 trillion (USD1.23 billion).
Deputy Finance Ministry Tran Van Hieu said, total the liabilities of corporations and groups have sharply increased from VND419.9 trillion (USD19.9 billion) by the end of 2006, accounting 1.32% of their total equity, to VND1,088 trillion (USD51.8 billion) by late 2010 (equal to 1.67% of their equity).
Non-core investment still on the rise
By the end of late 2010, corporations and groups had spent around VND21.8 trillion (USD1.03 billion) on non-core businesses, including VND3.57 trillion into securities, VND2.23 trillion in insurance investments, VND495 billion into investment funds and VND10.12 trillion into the banking sector.
A number of corporations and groups had invested into non-core business areas, but did not inform the Government of their actions, including the Vietnam National Coal and Mineral Industries Group (Vinacomin), Vietnam Rubber Group, Vietnam Paper Corporation and Vietnam Food Corporation.
According to Pham Viet Muon, Vice Chairman of the Office of the Government and Deputy Head of the National Steering Committee for Enterprise Reform and Development, the Government has requested all state-owned corporations and groups to withdraw their capital from non-core business areas before 2015.
Between 2015 and 2020, Vietnam will equitise 27 state-owned corporations and groups. The State will hold between 65 and 75% of the chartered capital of 11 of these groups.