BusinessFinance - Banking - MoneyGovernmentInvestmentsLao EconomyLatest News

Corruption Still Rife in Laos Despite Continued Crackdown Efforts

Source: RFA

The government of Laos says it has been ramping up its efforts to battle corruption over the past two years, but NGOs say that the situation in Laos is getting worse.

Many Lao government officials publicly say that corruption is a huge problem, and have taken action to combat it.

The State Audit Organization’s chairwoman Viengthong Siphandon told the Lao National Assembly on Nov. 21 that next year they will investigate 99 targets or government agencies that receive financial aid or loans from foreign sources.

“This year, we inspected 54 targets and found that the government lost $30 million to corruption,” she said.

Siphandon said her agency will audit revenue collection, detailed expenditures, the state budget, rural development and poverty reduction programs, programs that are funded by grants and loans, and the operations of state-owned enterprises.

Siphandon’s efforts mirror those of Deputy Prime Minister Bounthong Chitmany, who according to earlier RFA reports revealed at a party meeting that agencies he heads discovered 146 cases of corruption involving 994 officials who caused a total loss of $120 million.

Bounthong said 14 of the 994 were convicted for economic crimes, with 520 charged and awaiting trial. Of these 420 were investigated and the rest were interrogated.

J&C Services Motor Insurance Laos

Meanwhile, at the International Anti-Corruption Day celebration in Vientiane Capital on Dec. 9, State Inspection and Anti-Corruption Authority Vice Chairman Sinay Mienglavanh said in 2017 and 2018 his agencies “in cooperation with ministries and provinces have inspected many targets that were found to be involved in corruption.”

A total of 587 targets and 37 agencies nationwide were inspected last year, authorities said.

“There are a lot of leaks,” a resident of Vientiane Capital told RFA’s Lao Service. “For example, they collect 100 million in taxes but give only 50 million to the government. They can pocket the other 50 million.”

The Inspection Authority of the Security Ministry also inspected its own employees last year and announced on Dec. 11 that they found 64 cases of corruption, including 24 police officers who collectively embezzled $360,000. Those officers were reprimanded.

An unidentified ministry official said, “It’s difficult. We have to have evidence that clearly shows they did something wrong.”

“We need to investigate, digging through all the details,” the official added.

In September, the finance minister fired eight employees, including the heads of the finance and budget departments, for falsifying documents to import fuel, saying it was for railroad construction.

Lao government policy allows for fuel imported for this purpose to be tax exempt, but the officials sold the fuel on the market for a profit of about $1.3 million.

“We collect taxes according to the government’s [tax code],” an official in Champassak province said to RFA.

“We send the money to a higher level in the government, but we don’t know what happens to it after that,” the official added.

Corruption in Laos worsens

Despite the efforts on several fronts to curb corruption, Transparency International says that Laos is becoming even more corrupt.

The Berlin-based global anti-corruption coalition in February published its global corruption perception index, in which Laos was ranked 135th of 180 countries, dropping 12 places from the previous year.

Laos’ index score was 29 on a scale where 0 is highly corrupt and 100 is very clean. According to the report, Laos is the second most corrupt country in the ASEAN region, behind only Cambodia.

J&C Services Health Insurance

“Corruption is intensifying,” Deputy Prime Minister Chinmany told the National Assembly in October.

“For example, the real cost of building a kilometer of road is only $400,000 but the government ends up paying $1.7 million for it. $1.3 million is lost [to corruption],” he added.

A Vientiane resident said told RFA “Corruption is everywhere. It has become tradition!”

“For example if you request a service, you have to attach a white envelope that contains ‘tea money’ of at least $7 or so, or you’ll have to wait a long time,” the resident said.

The World Bank published a survey in February that found widespread and growing corruption as the main obstacle to doing business in Laos.

Vice President Phankham Viphavanh earlier this year said at a meeting of the Security Ministry, “Corruption is intensifying.”

“Laws are not effective, officials of all levels are corrupt. They abuse their power and positions to rob the country,” Viphavanh said.

“[They] take land, money, wood and gold for personal use. Over the past five years the nation has lost $600 million,” he added.

A Laotian source living in a southern province explained why corruption is so rampant, saying, “Corruption is getting worse because salaries are too low, not enough to live on.”

“At the same time, people like to show off [to give the perception] that they are living in luxury, especially their cars and houses,” the source added.

Meanwhile, a traffic officer in Xieng Khouang province said police officers take bribes because of their low salaries.

National Assemblywoman Valy Vetsavong said in November 2017 during a meeting of parliament, “The loss to corruption is massive.”

“Officials, businesses and investors are accomplices. These people are bad,” she said.

Prime Minister Thongloun Sisoulith told parliament last year that the government is going to crack down on corruption.

“There are too many bribes under the table,” Sisoulith said.

An inspector with the State Audit Authority told RFA on the condition of anonymity, “Frauds occur in development projects.”

“Dishonest officials across the whole country embezzle state funds and assets, including money for schools and health services.”