Seventeen percent of the country's 6,250 state enterprises are suffering losses, the official Nhan Dan daily said. All Vietnamese state enterprises are facing a liquidity crunch, with many carrying domestic and external debts amounting to as much as two and a half times their equity capital, the communist newspaper said. However a consultant to the World Bank said that given the nature of accounting at most SOEs, the figure could be far higher.
Any figure is arbitrary because accounting is so bad.
Vietnam's bookkeeping practices are notoriously bad, and there is strong resistance to financial accountability of SOEs, he said. The lack of transparency is the legacy of a Vietnam's former centrally planned economy when the state automatically subsidised loss-making companies. Since the launch of economic reforms more than a decade ago, most SOEs have been subjected to the rigours of the market economy. Other foreign analysts have called for a level playing field that will allow the private sector to compete with state behemoths. The World Bank consultant said the financial health and ultimate existence of all but the roughly 300 largest SOEs matter little to the economy.