On April 15, Prime Minister Pham Minh Chinh chaired a conference with the chairs and general directors of several major state-owned groups and corporations. The theme: “SOEs at the forefront of digital transformation and driving economic growth.”

Proposal to align SOE salaries with private sector

Deputy Minister of Finance Nguyen Duc Tam emphasized that enabling SOEs to pioneer digital transformation and achieve double-digit growth requires mechanisms that allow for performance-based pay.

This includes building flexible salary and bonus frameworks based on specific job roles and aligned with market demands.

He also recommended creating mechanisms to help SOEs access public technology investment funds and venture capital to finance high-risk technology pilots and innovative operational models.

In 2024, the total assets of 671 SOEs reached more than VND 5.6 quadrillion (approximately USD 227.2 billion), up 45% from 2023. Their equity reached nearly VND 3 quadrillion (USD 121.6 billion), a 61% increase. Total revenue stood at nearly VND 3.3 quadrillion (USD 133.9 billion), up 24%, while pre-tax profits rose by 8% to around VND 227.5 trillion (USD 9.3 billion). Contributions to the state budget reached nearly VND 400 trillion (USD 16.2 billion), marking a 9% increase.

Luu Trung Thai, Chairman of the Board at Military Bank (MB), echoed the proposal, suggesting that SOEs should emulate private enterprises in developing salary structures. He argued that linking income to revenue and profits could fund digital transformation efforts.

"Based on our years of experience in digital transformation, a technology company mindset and operational model are essential," Thai added.

He also recommended prioritizing digital transformation opportunities, large-scale technology projects, and new platform initiatives for SOEs to fully leverage their leadership potential.

“You can only manage what you understand”

Prime Minister Pham Minh Chinh emphasized that while SOEs account for a small fraction of Vietnam's nearly one million businesses, they play a crucial role in the economy and hold vital physical resources.

He stressed that SOEs must lead the digital transformation process, build digital government, promote digital society and citizens, and capitalize on their available resources and workforce.

Enterprises should focus on standardizing digital processes, building data systems, applying artificial intelligence, and developing digital infrastructure and products. However, the Prime Minister warned that rapid development must be accompanied by strong cybersecurity measures.

To drive growth, the Prime Minister urged businesses to refresh the traditional three economic engines - investment, exports, and consumption - while promoting new drivers of growth.

He also called on SOEs to cooperate more closely with one another and with private businesses for mutual benefit.

Addressing regulatory challenges, the Prime Minister instructed ministries and sectors to promptly review and eliminate institutional obstacles, especially those related to the Law on Management and Use of State Capital in Enterprises. He reiterated the principle: "Manage only what is understood, don’t manage what isn’t," encouraging decentralization and delegation of authority.

Additionally, he directed ministries to streamline administrative procedures, reducing them by at least 30% in terms of cost, time, and complexity for businesses.

The Vinh