Source: Vientiane Times
Two banks previously owned by the state and which suffered chronic losses have begun making a profit following major reforms that saw a 70 percent stake in the banks sold to local investors, a minister told lawmakers on Friday.
Reform is also ongoing in many other state enterprises under an initiative introduced by the government to ensure they operate lucratively, Minister of Finance Bounchom Ubonpaseuth said.
The state-owned enterprise Inter Lao Tourism was dissolved and two others – DAFI and the Lao Cotton State Enterprise – will also be disbanded after being considered incapable of improvement and efficient operation, he added.
The minister delivered an assessment of the situation around state enterprises at a consultation meeting held in the lead up to an ordinary session of the National Assembly, which kicks off on Monday.
After restructuring began in October last year, the Lao Development Bank – one of the two aforementioned banks that is now profitable – had generated profit of 87.91 billion kip as of December 2021. The bank has also paid as much as 58.85 billion kip to the government in fees and taxes.
In addition, the Agriculture Promotion Bank had turned a profit of 7.56 billion kip as of May 2022, after restructuring began in December 2021.
Mr Bounchom said the joint venture process of overhauling the Agriculture Promotion Bank took longer than for the Lao Development Bank because officials in charge had to address embezzlement at the Agriculture Promotion Bank that resulted in losses of 260.46 billion kip.
Elsewhere, progress has been made in the partial sale of the government’s stake in three other state enterprises that had also suffered chronic losses.
The government has sold 51 percent of its stake in the Lao State Postal Enterprise, while the sale of 49 percent stakes in the Lao Logistics State Enterprise and MSIG Insurance (Lao) Co., Ltd. are being processed.
The minister also said the government has formed a committee to carry out reforms in three other major state enterprises – Electricite du Laos, the Lao State Fuel Enterprise, and EDL-Generation Public Company.
Authorities in charge of the matter have asked the Prime Minister to set up another committee to carry out reforms at Lao Airlines, the Agro-industrial Development Company, and the Lao Export-Import Trading Company.
Explaining the reform policy, the minister said the government would continue to hold a full stake in some enterprises, sell off small or large shares in others, and even sell its complete stake in certain enterprises depending on their strategic importance.
“In the case of Electricite du Laos, the state will retain a 100 percent stake, but comprehensive reform must take place as recommended by the findings of a study carried out by the reform committee,” Mr Bounchom told the meeting. The government will retain at least a 51 percent stake in Lao Airlines, the Agro-industrial Development Company, Lao Export-Import Trading Company, and the Lao State Fuel Enterprise.
EDL-Generation Public Company will remain a public company, but comprehensive improvement will be undertaken in line with recommendations made by the company’s new executive council and directors.
There are 178 state-owned enterprises in total, which represent 0.12 percent of all 148,824 enterprises registered in Laos.