PHNOM PENH. Apr 3, 2012. Vietnam Prime Minister Nguyen Tan Dung said he is stepping up plans to revamp the country’s bloated state sector that have led to a series of debilitating credit-rating downgrades and pressured Vietnam’s fragile currency.

In written responses to questions posed by The Wall Street Journal on the sidelines of a regional summit in Cambodia, Mr. Dung said he plans to push Vietnam’s state-owned enterprises into closer competition with the private sector to make them more efficient, and to revive a stalled series of partial privatizations, a process known in Vietnam as “equitization.” Creating a more level playing field between the private and state sectors, Mr. Dung said, “is one of the key components of economic restructuring.”

Vietnam’s once-booming economy has foundered in recent years, thrown off balance in part by burgeoning debts at some of its sprawling state-owned enterprises. Mr. Dung’s government previously had adopted a policy of encouraging Vietnam’s big state-owned firms, which control about 40% of the country’s economic output, to diversify into new industries and provide a powerful counterweight to a deluge of foreign investment into the nation.

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