State Management Viewpoints on Defense Economic Enterprises

3.1. State management perspective on defense economic enterprises

In order to ensure that the economic and technical enterprises develop in the right direction, sustainably and effectively, the State management of economic and technical enterprises needs to thoroughly grasp the following viewpoints:

3.1.1. Combining economic development with ensuring national defense and security

Combining the economy with national defense and security is an important issue for many countries in the world. In Vietnam, our Party's consistent viewpoint is to closely combine the economy with national defense and security. That viewpoint is expressed throughout the Party's guidelines through the Congresses, in accordance with the historical conditions of our country. It is also a continuation of our nation's tradition of "building the country while defending the country", along with the policies of "hiding soldiers in agriculture", "moving for soldiers, staying still for the people", "reclaiming land and establishing villages"... In the Party's Platforms or documents with platform-like characteristics, the viewpoint of combining the economy with national defense and national defense with the economy has been expressed, although to different degrees. [64]

At the 11th National Congress of the Communist Party of Vietnam, our Party continued to affirm: "Closely combine economy with national defense and security, national defense and security with economy in each strategy, planning, plan, and socio-economic development policy and in each locality". [34]

Implementing the policy of combining the economy with national defense and security, the task of production and economic development will continue to be a strategic task of our Army; and the national defense economic enterprise is an important tool to carry out the task of combining the economy with national defense and security. Because the national defense economic enterprise is a special type of state-owned enterprise, the State needs to have a flexible but legal management mechanism so that the enterprise can simultaneously perform both the task of serving national defense and security and the task of production and business effectively. For national defense economic enterprises whose main task is to produce and trade products to serve market demand, the innovation of state management must comply with the principles and management policies as for state-owned enterprises. Regarding the task of serving national defense, it is necessary to identify this as the top political task of national defense economic enterprises, so the State needs to have priority policies to help enterprises stand firm in the competitive environment.

The viewpoint of combining the economy with national defense in the period of international integration needs to go into depth and achieve practical results. To have a practical and effective combination, it is necessary to link strategies, planning, programs, projects, and socio-economic development policies with strategies, planning, plans, and activities of national defense enterprises. However, this is a very difficult issue and is related to national secrets, so in reality, the effectiveness of the combination is still limited. To overcome that situation, it is time to study and develop strategies, planning, and plans to combine the economy with national defense at each level. Only then can we closely link the specific contents that need to be combined between the economic and national defense sectors in a practical and effective way.

Combining economy with national defense and security cannot be spread evenly but needs to focus on key tasks, national defense enterprises operating in key and spearhead economic sectors and fields; in important directions, regions and territories of the country with effective breakthrough solutions. These are remote, isolated, border and island areas which are areas with many socio-economic difficulties and are extremely sensitive to national defense and security. Therefore, to combine economy with national defense and security in key areas, it is necessary to continue to promote the construction and development of border defense enterprises in mainland; at the same time, research and build models of national defense enterprises in sea and island areas. That is an urgent requirement, contributing to the management and firm protection of the sea and island areas of the Fatherland in the new situation.

Implementing the consistent leadership of the Central Military Commission, the Party Committee of the Army exercises direct and absolute leadership in all aspects of the military economic enterprises, accordingly, issues related to Party work, political work, personnel, and investment will be managed according to the specific regulations of the Ministry of National Defense. The Ministry of National Defense will be resolute and consistent in the process of directing and operating the military economic enterprises.

3.1.2. State management of defense economic enterprises must force enterprises to act according to market principles of competition and efficiency.

In the past, state-owned enterprises were generally subsidized and enjoyed privileges, so their competitiveness was weak and their efficiency was low, but they still existed. Switching to a market mechanism requires state management agencies and officials of state-owned enterprises to renew their thinking and act according to market principles, which are competition, integration and efficiency.

World Bank experts have recommended that: “Competition improves the performance of SOEs not only because competitors push SOEs to perform better, but also because competition will clarify the costs of supporting inefficient SOEs or the costs of using SOEs to pursue socio-political goals. Competition also provides information about management: the government can assess the role of management, the level of management effort by comparing the performance of SOEs with that of competitors”[57]. In fact, this is what successful reform countries have done: they increased domestic competition by removing price controls and barriers to entry, and increased international competition by liberalizing foreign trade. Not only that, these countries also dissolved most of the SOEs in the competitive sector.

Applying market principles to national economic enterprises requires the State to gradually reduce protection and subsidies to force enterprises to innovate and improve their competitiveness. State management of national economic enterprises must continue to innovate in the direction of gradually reducing administrative intervention, improving the autonomy and operational efficiency of national economic enterprises, creating an open business environment, free trade, and freedom of business according to general provisions of law, in accordance with international practices.

It should be emphasized that the effectiveness of State management of enterprises in the field of national defense and security is not only economic and financial effectiveness, expressed through the difference between benefits and costs, but must be the overall effectiveness in terms of economy, society, politics, national defense and security. The impact of State management on enterprises in the field of national defense and security must contribute to economic growth and stability, contribute to the budget, create jobs, and maintain national defense and security.

3.1.3. Reforming the state management system for defense economic enterprises must adapt to the integration trend and be consistent with international practices.

Globalization and international economic integration are objective trends of the times, bringing both opportunities and challenges to the State management of enterprises of national economic and social development. The process of globalization and integration has both positive and negative aspects, both competition and cooperation, and affects the development of countries. Especially developing countries and small and medium enterprises are often disadvantaged by the negative impacts of globalization and always have to adapt passively. Even so, globalization still takes place inevitably, influencing in one form or another, with different levels for all countries as well as for enterprises. To develop in such a context, our Party and State have decided to: Proactively integrate into the international economy in the spirit of maximizing internal resources, improving the effectiveness of international cooperation, ensuring independence, autonomy and socialist orientation, protecting national interests, maintaining national security, preserving national cultural identity, and protecting the environment. The problem is that without preparation and proactively promoting internal resources, successful integration is impossible. It can be said that the national defense economic enterprise is a special type of state-owned enterprise that simultaneously performs both production and business tasks and serves national defense, so it has received many incentives from the State. However, today, in the context of a globalized market economy, when tariff barriers are removed, liberalization is implemented

In order to promote trade according to WTO commitments, institutions for national defense enterprises in particular and for all enterprises in general need to be innovated to adapt to the process of international economic integration and create favorable conditions to support enterprises to integrate effectively.

The Ministry of National Defense advocates allowing defense economic enterprises to conduct joint ventures and associations with domestic and foreign enterprises and economic organizations on the principle of ensuring internal military political security, national security, compliance with laws and regulations of the Ministry of National Defense, and ensuring economic efficiency. Actively develop overseas investment projects in the fields of high technology and dual-use technology. Closely direct the implementation of overseas investment projects of enterprises with foreign investment activities.

3.1.4. Innovation in state management of defense economic enterprises must be carried out synchronously with general economic reform, in accordance with the economic and political institutions and specific historical conditions of the country.

With current conditions in Vietnam and world trends, according to this point of view, it is necessary to emphasize the following 3 new points:

 Continue to promote the arrangement, innovation, development and improvement of the efficiency of SOEs in the Government's general plan on reforming the SOE sector and the economy. The State needs to issue synchronous policies, create a basic legal framework for types of single-member LLCs, joint-stock companies, forms of economic group organization, corporations, parent companies - subsidiaries; set out specific tasks and solutions for each period and direct the implementation resolutely; reduce the number of SOEs, especially small-scale, loss-making enterprises; focus on and encourage key economic sectors and fields, meeting essential needs for national defense, security and public interests, large-scale enterprises to improve competitiveness; innovate corporate governance and State management of SOEs in accordance with the market mechanism. Continue to accelerate the equitization of enterprises

Economic and technical enterprises in which the State does not need to hold 100% of the capital according to the Prime Minister's regulations. Enterprises that operate at a loss must merge or go bankrupt according to the law.

 The national defense economic enterprises are established and managed in a hierarchical system from the Ministry of National Defense downwards. Therefore, in addition to complying with the law and being managed by relevant ministries and branches, these enterprises are also subject to control and strict constraints on the organization and tasks of the military, and must comply with the specific regulations of the Ministry of National Defense. Thus, the level of "freedom of movement" in the operations of national defense economic enterprises may be lower than that of other enterprises operating in the market. This is an acceptable difference of the State management of national defense economic enterprises compared to other enterprises, requiring the State management of national defense economic enterprises to be consistent with the political and economic institutions of the country.

 Vietnam's military economic enterprises are military organizations. Whether in wartime or peacetime, military economic enterprises still have two noble missions: the task of serving the military and the task of doing business. Due to the historical conditions of our country, the war has been prolonged and the economic situation is still difficult, so the existence of military economic enterprises with its "bisexual" characteristics is considered an inevitable thing, but also a challenge in the process of innovating state management for enterprises. For example, in terms of human resources of military economic enterprises, they are also "people of the army" or more or less enjoy the military's incentives during the war, so psychologically they want to "wear stars, wear hats" and enjoy the same benefits as military officers or professional soldiers. Innovating state management for military economic enterprises will certainly affect the thoughts and interests of military cadres participating in the economy and workers. Therefore, politically, on the one hand, the State, directly the Ministry of National Defense, must have high determination in innovating management of military economic enterprises, on the other hand, it must ensure the feasibility of the innovation contents and create consensus among military officers in state management agencies related to enterprises.

KTQP, of military officers performing administrative duties in enterprises and of the workforce working in these enterprises.

3.2. Solutions to continue improving state management of defense economic enterprises

Based on the assessment of the current state management of enterprises and the results of the survey, the thesis proposes a number of key solutions for state management agencies, especially the Ministry of National Defense, to continue to improve state management of enterprises in the coming time.

Table 3.1 Summary of survey results towards solutions to improve State management for KTQP enterprises (question group 4)

Scale: 5 – Strongly agree; 4 – Agree; 3 – Somewhat agree; 2 – Disagree; 1 – Strongly disagree

Factors considered

Investigation results
Totally agree	Agree	Soy sauce agree	Disagree	Very disagree	Total number of comments	Value medium
X43: Need to innovate strategy, planning, and system development plan Enterprise KTQP	28	110	13	0	0	151	4.10
X44: Need to innovate policies and regulations for enterprises	32	104	14	0	0	150	4.12
X45: Need to innovate organizational model Production and business of national defense enterprises	28	96	21	1	0	146	4.03
X46: Need to reform regulations on granting business registration licenses for KTQP enterprises	13	70	46	19	0	148	3.52
X47: Need to innovate State management for capital and assets of KTQP enterprises	24	99	18	10	0	151	3.91
X48: Need for innovative control over Enterprise KTQP	34	90	21	6	0	151	4.01
X49: Need to innovate the state management apparatus for KTQP enterprises	27	90	23	11	0	151	3.88
X50: Need to improve rolling quality Ministry of State management for economic and technical enterprises	55	85	10	0	1	151	4.28

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The table above shows the survey results in group 4 questions of the survey form - questions aimed at solutions to improve State management for KTQP enterprises.

- Regarding the need to innovate and improve strategies, planning and development plans for national defense enterprises: the survey results for State management officials as well as for national defense enterprises all show that it is necessary to innovate the work of building strategies and plans of the Ministry of National Defense for national defense enterprises so that national defense enterprises can continue to grow and develop. Of the total 151 responses to question 43, all (accounting for 100%) said that it is necessary to innovate the work of building strategies and plans for national defense enterprises, of which 28 opinions strongly agreed, 110 opinions agreed and 13 opinions relatively agreed. There were no opinions disagreeing. This survey result, according to the author, is not inconsistent with the survey result in question 27, in which the majority assessed that the strategy and planning for KTQP enterprises are reasonable ( X 27 = 3.49), this is due to the importance of strategy and planning for the development of KTQP enterprises. The mean value

jar

X 43 = 4.1 > 3 reflects this.

- On the need to innovate and improve State policies and regulations

State policies and regulations for economic enterprises: The survey results (question 44) for both State management officials and economic enterprises all show that it is necessary to innovate State policies and regulations for economic enterprises so that economic enterprises can continue to grow and develop. This is very consistent with the survey results of questions 29, 30, 31, 32 - questions to assess the suitability of policies on products, capital, credit and taxes for

DN KTQP. Average value of variables:

X 29 ,

X 30 ,

X 31 , X 32

even

approximately 3, which is at an average level. Thus, policies on products, capital, credit and taxes all need to be innovated and improved to encourage the further development of KQP enterprises. Specifically, out of a total of 150 responses to question 44, all (accounting for 100%) said that policies need to be innovated.

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