Laos PM moves to crack down on reckless spending

Laos Prime Minister Thongsing Thammavong has promised to take stricter measures for maintaining national economic growth and stability with a focus on harsher punishments for government organisations and businesses that breach financial regulations.

Thongsing made the promise yesterday in his address at the National Assembly (NA) session to explain the government's recent performanceon socio-economic management and outline a plan for addressing the issue in the remainder of the 2013-14 financial year.

"We are monitoring some groups of people who undertook projects but are yet to begin, or have only finished one third or only half, while they have already been paid because they have forged documents," Thongsing said.

"There will be harsher punishments for organisations and local authorities who commit these offences."

The prime minister was applauded by the audience, mostly made up of NA members, for taking a strong stance.

Thongsing made his speech to further the explanations already given by the Minister of Finance in answer to the queries of NA members about the government's revenue shortfall.

He also said a national reserve should be built up over the next five years but did not specify how much would be saved.

Thongsing said to ensure the national reserve was a success the government would be stricter on the rule of law, more disciplined about its budget and enforce laws on taxation and land.

In particular, there will be tougher enforcement of anti-corruption laws preventing budget leaks in common problem areas like tariff exemptions for imports and exports, especially of wood, and land tax.

The government is hoping to generate 25,216 billion (US$3.95 billion) kip in revenue for the 2013-14 fiscal year, and a further 4,500 billion kip to address the budget deficit.

Thongsing said expenditure should not be higher than 29,700 billion kip in the same period.

On investment, he said projects accounted for in the 2013-14 budget plan would be allowed to continue. Under government decree no.241 the government will be paying 3,000 billion out of the total cost of 8,100 billion kip, with the rest being contributed by private developers.

The government will postpone some projects it deems ineffective and hold off on starting any new ones. From now on, only seriously needed projects will be authorised.

The government will give special consideration to projects that are already underway if they are seen as effective and look like they will generate returns in the near future.

Thongsing called on members of the public to monitor the issue and said the government was not in a position to fund any new projects.

The only new projects that might be approved would be those that already have their source of funding guaranteed.

The government will also move to control the prices of fuel, rice, meat, and fish, reviewing the situation each month. It will also balance the profits that entrepreneurs in those sectors are able to make.

Thongsing said the government had done everything in its power to achieve the planned targets but conceded that there had been little success in the past two months because of a lack of skilled, specialised staff and modern equipment.

The government will improve its enforcement of financial regulations and draft new decrees. A new committee has been set up to draft the new legislation.

The measures will be aimed at preventing extravagant administrative expenditure on things like receptions and travels.