Vietnam cuts army business links

Vietnam's leaders have decided to remove dozens of companies from the control of the armed forces and the ruling Communist Party.

The companies will instead be transferred to civilian ownership. The decision, taken last week by the Communist Party's main policy-making body, the Central Committee, represents a significant break with the past. Many state and party organisations have made large amounts of money by going into business.

Vietnam's armed forces own a mobile phone company, a bank, shipbuilders, textile factories and even hotels - in total more than 100 firms. Most of these began by making weapons or uniforms but increasingly they have taken on a life of their own. Some senior officers have found a comfortable second career as company directors.

But now the ruling Communist Party has decided the military should concentrate on defending the country and only keep hold of companies with genuine security functions. The party and party-controlled organisations will also lose control of their businesses.

It is a major step and will involve taking on a number of vested interests. But it is a sign the party is serious about separating the running of the country from day-to-day business decisions. It is part of a policy to bring all state-owned enterprises under the control of a single holding company - with a view to selling off stakes to private investors.

Some senior officials want to emulate the model of Singapore's state holding corporation, Temasek, which allows the government to control the overall direction of companies but also get access to foreign investment and skills.

No details have yet been released about how the process will work in Vietnam, or how long it will take.

There is bound to be plenty of debate before it is fully implemented.

BBC