By John Ruwitch
HANOI, Dec 7 (Reuters) - Spooked by the near-bankruptcy of Vietnamese state shipbuilder Vinashin, foreign ambassadors and aid donors urged the government on Tuesday to speed up the reform of state-owned enterprises to avoid a similar debacle.
The discussion at an annual donors' meeting underscored concerns about ripple effects from Vinashin's debt woes and what some saw as a frustrating lack of progress in a key area for the economy.
After the government revealed Vinashin was sinking under ${esc.dollar}4.4 billion in debt earlier this year, it ordered the conglomerate to be reorganised and hived off parts of the business.
Last week, Vinashin proposed a delay in the first payment on a ${esc.dollar}600 million, eight-year loan due later this month, raising questions about the extent of government support. Foreign creditors were due to hold a conference call on Wednesday to consider the proposal, sources said.
The possibility of a Vinashin default led Standard & Poor's on Monday to downgrade the long-term credit rating of another major Vietnamese state-owned enterprise, coal and mining group Vinacomin, which had planned to raise up to ${esc.dollar}500 million via an international bond this year.
However, the ruling Communist Party continues to identify the state sector, and in particular "economic groups", or conglomerates, such as Vinashin as the favoured component of the economy.
"The fact that we don't see all of the balance sheets of all of the SOEs begs the question: Are there other Vinashins out there?" U.S. Ambassador Michael Michalak asked the meeting.
Despite promises to keep up reforms and speed up a programme of partial privatisation of the SOEs, or state-owned enterprises, there has been little progress, he noted. "As you've heard Americans say before: Where's the beef?"
Anthony Stokes, Britain's new ambassador to Vietnam, said more problems at SOEs were inevitable.
"I wonder whether 'Are there any other Vinashins?' is the right question with state-owned enterprises," he said.
Maybe, he went on, it was better to ask: "There must be other Vinashins: how can the government ensure that the trade and investment community can see with confidence that they are identifying those other Vinashins and the ways to help them evolve into a more effective, market-oriented model?" A statement by Australia and the Asian Development Bank on behalf of the donors group said the acceleration of SOE reform was "particularly important for Vietnam's macroeconomic stability and sustainable rapid economic development".
"I think there's a real commitment by the development partners to Vietnam's development and a recognition of the challenges that it faces now as a middle-income country in the medium term," said John Hendra, United Nations Resident Coordinator in Vietnam.
"But I think you could also hear some frustration that some of these critical issues that really need to move for Vietnam to get to the next level are still not being addressed." (Additional reporting by Wendy Mock; Editing by Alan Raybould)
Our Standards: The Thomson Reuters Trust Principles.
