Comparison of the Income Growth Rate of Employees and Profit Growth of 3 Joint Stock Companies.

- . Focus on disseminating information to leaders and employees of enterprises to grasp and understand the policies of the Party and State on restructuring and transformation to limit and overcome hesitation and opposition to restructuring.

- Equitization of state-owned enterprises must ensure the real ownership of shareholders, including the majority of employees, to create strong motivation within the enterprise. In addition, it is also necessary to boldly sell shares to the outside to attract capital and intelligence from the whole society, especially strategic investors, to create more motivation for enterprise development.

- It is necessary to encourage and promote the process of improving the financial situation before equitization, to clarify and have a mechanism to promote debt settlement; in addition, the post-equitization production and business plan must also be highly feasible, the enterprise's leadership and the collective of employees must also be unanimous and determined to innovate and develop the enterprise.

- Must flexibly adjust the form of arrangement during the implementation process, the equitization process, if the enterprise has major financial fluctuations... cannot be equitized, then immediately switch to other forms (transfer, sell, dissolve, bankrupt...)

- The arrangement and transformation of SOEs in general and through the equitization process in particular is identified as a difficult process that cannot be carried out hastily. Therefore, this process must ensure both progress and stability and development of the enterprise after the arrangement, avoiding the tendency to chase progress without ensuring the quality of the equitization process.

- For enterprises with remaining State capital after equitization, the selection of the person directly managing the State capital portion must be carefully considered, avoiding monopoly (choose 1 person) and must be closely monitored and monitored regularly. If the requirements are not met, they must be replaced immediately.

- Focus on improving the qualifications and responsibilities of Party Committee cadres, this is a decisive factor in improving the quality of Party activities in enterprises. Build a good relationship between the Party Committee and the business owner. Solving this relationship well is the key to ensuring Party building work in enterprises.

- Building a team of state management officials in corporate finance with professional capacity and strategic vision, understanding of market economy, innovative thinking, bright mind, daring to think, daring to do, daring to take responsibility in performing public duties to help enterprises be competitive and participate in the process of international economic integration.

- Twice a year, the Standing Committee of the Enterprise Innovation and Development Board or the Provincial Leaders organize meetings and dialogues with enterprises to listen to their feedback on difficulties and problems that need to be resolved as a basis for adjusting or building appropriate policies and mechanisms related to enterprises.

2.4.1.3 Experience of Nam Dinh province

By the end of 2010, Nam Dinh had equitized 50 SOEs. The number of equitized SOEs was not large, the average capital size of enterprises was small, and the operating time was not long. However, the operating efficiency of enterprises after equitization was initially improved, as shown in the following aspects:

Firstly , state ownership is initially restructured according to the requirements of developing a multi-sector economy. Through the sale of shares, the State recovers an important amount of capital into the state budget to reinvest in enterprises and resolve a number of policies for workers.

Second, the change in ownership structure has created a new driving force for changes in the management apparatus and corporate governance methods, while creating an effective control mechanism for employees over the enterprise. Thanks to that, many enterprises have saved production costs and increased labor productivity.

Specifically: Joint Stock Companies in Nam Dinh province have reduced costs by about 20% on average. In some joint stock companies such as Nam Dinh Steel Wire Mesh Joint Stock Company; Nam Dinh Automobile Transport Joint Stock Company, Thanh Cong Infrastructure Construction Joint Stock Company; Son Nam Textile and Garment Joint Stock Company..., product costs have been reduced by 50% compared to before equitization.

Third , forming a new distribution mechanism in the direction of promoting resources in the conditions of a market economy and international integration: Employees in enterprises have the right to buy shares and become shareholders, so their relationship with the enterprise is expressed in two capacities: Employees for the enterprise and owners of the enterprise. Therefore, in addition to salary, they also receive income in the form of dividends. This makes them more interested in the survival and development of the enterprise. Through enterprises formed from the equitization of state-owned enterprises, it can be seen that: at Nam Dinh Agricultural Construction and Rural Development Joint Stock Company; Nam Dinh Construction Joint Stock Company; Nam Ha Pharmaceutical Joint Stock Company; Song Dao Nam Ha Shipbuilding Joint Stock Company; Nam Dinh Steel Mesh Joint Stock Company; Bach Dang Joint Stock Company,... the average monthly income of employees increased from

800,000 to 2,500,000 VND/person/month (3.1 times increase). In the remaining enterprises, the average increase is 1.5 times.

However, the equitization process of state-owned enterprises in Nam Dinh has also given rise to the following socio-economic problems:

*The change in ownership structure in some enterprises does not create a clear change in the management apparatus and corporate governance methods, and it is difficult for workers to become real owners of enterprises after equitization.

Enterprises formed from the equitization of state-owned enterprises in which the state is a major shareholder (state capital of 30% or 51%) still rely heavily on the request mechanism - so the management of the enterprise's operations is extremely difficult and congested. The management apparatus from the chairman of the board of directors, board of directors

The departments and production workshops were basically transferred from state-owned enterprises, and have not yet approached the new management method, so the direction and operation of production and business in these enterprises is still confusing. In particular, there are CEOs and Chairman of the Board of Directors who do not respect the company's charter, causing disunity within the company.

In addition, management and executive staff in enterprises have limited educational qualifications and professional expertise, are passive in adapting and approaching modern technology at a low level, and operate management activities mainly based on experience, are afraid of collisions and are slow to innovate.

In fact, in enterprises formed from the equitization of state-owned enterprises in Nam Dinh province, the proportion of shares sold to employees in the enterprise accounts for about 70% of the charter capital, the portion sold to shareholders outside the enterprise only reaches approximately 10%. Along with the basically closed equitization , in many joint stock companies, the State still holds a large proportion of equity capital (usually from 60% to 80%). This reality shows the inadequacy of the Province in dealing with the issue of ownership structure conversion in the equitization process.

In some joint stock companies, employees are also shareholders, partly due to inadequate awareness of their rights and obligations or limited understanding of the law on joint stock companies, partly due to being too poor, so they are forced to transfer their shares to others, thereby losing ownership of the company.

As a result, some enterprises after equitization have seen a decline in production and business results compared to before equitization. These are usually enterprises operating in difficult industries and fields, with outdated production technology, uncompetitive products, and weak organizational and leadership skills. These enterprises account for 5% - 7% of the number of enterprises that have undergone equitization of state-owned enterprises, including: Nam Dinh Construction Materials Joint Stock Company, Export Handicraft Textile Joint Stock Company, Nam Dinh Seafood Processing Joint Stock Company, etc.

* Many problems arise for employees in state-owned enterprises during equitization, especially in enterprises that are making losses after equitization.

One of the most difficult issues in the transformation of state-owned enterprises is to deal with social issues related to the staff and workers who have been with the enterprise for many years. In terms of benefits, staff and workers of state-owned enterprises who are enjoying salary and insurance regimes have many advantages over other types, especially in cases where the enterprise is operating at a loss. Meanwhile, the social insurance contributions for employees of enterprises formed from the equitization of state-owned enterprises still have many shortcomings due to the lack of appropriate guidance documents from state management agencies.

Many elderly officials and workers will not meet business requirements when SOEs are converted into JSCs. In the above context, when the issue of resolving surplus labor in some JSCs has not received due attention, it is clear that the equitization process of SOEs causes considerable social concerns.

Besides some enterprises formed from the equitization of state-owned enterprises that operate effectively, have conditions to expand production scale, and attract more workers, there are many enterprises that have declined in business, leading to labor surplus. In this case, due to the lack of necessary support from the state, these enterprises do not have enough material conditions to solve social problems (subsidies, finding new jobs...) related to those who have lost their jobs. The superiority of the equitization of state-owned enterprises is not promoted, the next equitization process will encounter many obstacles.

* Workers' income increases slowly:

In general, although in many enterprises formed from the equitization of state-owned enterprises, business results (revenue, profit, etc.) have been somewhat improved, the average income of employees as well as the contribution to the state budget have increased, the growth rate of the last two indicators is still low, not commensurate with the development of the company. This is shown in the following table:

Table 2.2: Comparison of the rate of increase in employee income and profit of 3 joint stock companies.

STT

Company Name	Time JSC activities	Rate of increase about paying the state budget	Profit growth rate	Rate of increase employee income
1	Wire Mesh JSC steel	11 years	16%	534%	23%
2	Textile and Garment Corporation Son Nam	6 years	20%	488%	17%
3	JSC NADIMEX	6 years	4%	153%	10%

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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• Absolute growth rate of experimental chickens over weeks of age

Source: report of Nam Dinh Provincial People's Committee in 2009

Table 2.2 shows that, at Nam Dinh Steel Wire Mesh Joint Stock Company, after 11 years of operation, the profit growth rate reached 534%, while the income growth rate of workers was only 23% and the state budget contribution only increased by 16%. At Son Nam Textile Joint Stock Company, after 6 years of operation, the profit growth rate was 488%, the income growth rate of workers was 17%,... Thus, the benefits from the business results of these companies mainly fell on the company owners, including some workers as shareholders, while the lives of the majority of workers, although improved, were not significant.

* The relationship between shareholders and the JSC is not yet clearly and transparently bound, the rights and obligations of shareholders as owners of the company are not fully implemented.

The survey shows that: in many companies, there are no thematic seminars, conferences and real forums for employees as shareholders to express their views and give their real democratic voice to the problems of the business, which has caused inhibition and disunity within a few companies. In addition, the activities of political and social organizations

The social responsibility of enterprises formed from the equitization of state-owned enterprises still has many limitations and confusion, and has not yet promoted its role and capabilities. In addition, many enterprises, in pursuit of profit, ignore or take lightly the issue of environmental protection.

2.4.2. Some lessons learned for Thanh Hoa province

From the experience of equitization and solving socio-economic problems arising in the equitization process in some localities, some lessons can be drawn that Thanh Hoa province can refer to and apply as follows:

Firstly , in order for the equitization of state-owned enterprises to be successful, the arising socio-economic problems must be effectively limited and resolved. The equitization program and plan must be systematically planned as part of the restructuring program of the state-owned enterprise sector in particular and the whole economy in general. It must be based on repositioning the role of the state economic sector to expand the scope of state-owned enterprises that must be equitized. Equitized enterprises must be supported in a consistent and appropriate manner. At the same time, the equitization of state-owned enterprises must be carried out step by step, and the equitization subjects must be enterprises with potential to avoid legal debt cancellation for state-owned enterprises that have been operating at a loss for a long time and have a lot of bad debt.

Second, it is necessary to attach importance to propaganda work to influence the awareness of subjects related to the equitization process, and limit disagreements and opposition to equitization in various forms on the basis of consensus on common long-term interests. In addition, there must be binding responsibilities for leaders of enterprises subject to equitization in implementing the equitization project and plan approved by the Prime Minister and the Chairman of the Provincial People's Committee, proactively focusing on thoroughly handling outstanding issues in the equitization process to effectively implement the steps of equitization. Reality shows that in most state-owned enterprises, employees cannot initiate, oppose or obstruct equitization if the director and the governing body have initiated and launched it. Therefore, it can be seen that the effectiveness of equitization, the speed of progress, depends mainly on

on the role of business leaders and governing bodies.

Third, there needs to be coordination between sectors and levels and specific and clear assignment of responsibilities in organizing the implementation of the SOE equitization plan. Provincial leaders need to regularly urge, guide and inspect enterprises to implement equitization according to approved plans and schemes; promptly detect and work with enterprises to remove difficulties and obstacles in the SOE equitization process to propose and recommend to competent state agencies for consideration and resolution.

Fourth, it is necessary to focus on directing the complete settlement of outstanding financial issues of enterprises before the conversion, especially outstanding and long-standing debts. This is a very important factor in the process of arranging and innovating State-owned enterprises. In fact, enterprises that comply well with capital and asset management, proactively handle outstanding debts, and improve the financial status of enterprises before equitization will create favorable conditions for determining enterprise value, shorten the time in the equitization process and often create high production and business efficiency after equitization.

On the other hand, it is necessary to perfect the institution to create a fair legal corridor for domestic and foreign investors, reduce administrative procedures, and combine with measures to solve social problems. Closely combine equitization and corporatization to overcome the situation of equitization in form.

Fifth, we must boldly sell all State capital in equitized enterprises where the State does not need to hold controlling shares, as well as avoid the situation of closed, internalized equitization in order to create real, correct changes in the ownership structure of enterprises. Reality shows that equitized enterprises without State capital participation often have higher production and business efficiency than enterprises with State capital. On the other hand, if State capital is still involved in the enterprise, a representative must be appointed to manage the State capital, and the authority and responsibility of the enterprise must be clearly defined.