Lao Teachers Face Three Months of Late Wages

Teachers in some areas in impoverished Laos have not received wages for more than three months amid financial problems gripping the government, according to a group of teachers in the country’s capital.

The teachers from Vientiane’s Sanakham district told RFA’s Lao Service on Thursday that the salary delays added to frustration following reports that the government will suspend a monthly allowance for civil servants.

“Our salaries have been delayed for three months but we are told that we have to be patient,” one teacher told RFA, speaking on condition of anonymity.

“The government owes [us] money—each of us three months. Some people are owed 4 million kip (U.S. $500), but others are owed as much as 5 million kip (U.S. $635).”

The teacher said that salary delays for educators had occurred in “many places across the country,” without providing details.

Reports indicate that back pay is also owed to civil servants in several lines of work, including military personnel, police, and retirees.

Allowance suspension

The complaints of wage delays followed an announcement by Prime Minister Thongsing Thammavong last week that the government would suspend a 760,000 kip (U.S. $97) per month living allowance paid to state employees and push ahead with a promised salary increase.

State employees told RFA that they had received no official notice of when the suspension would go into effect.

The International Monetary Fund has told Lao authorities in recent annual consultations to tighten its policies to avoid a major economic crisis.

The Fund had raised concerns about Laos’s rising inflation, the banking system, public spending, deteriorating current account deficit, and falling international reserves, IMF officials said.

The IMF warning came amid a persistent shortfall in revenue, which led Thongsing to order ministries and government agencies last month to closely control expenditures for Laos to pay its debts and avoid a financial crisis.

A recent report by the local Vientiane Times called the payments for the monthly allowance to be scrapped “far bigger than the pledged increase to state salaries.”

The allowance, which is mostly used to help civil servants pay their electricity and water bills, was introduced last fiscal year, which ran from October to September this year.

“They [the government] have not sent out an official notification, so there are many offices calling each other to ask how to calculate salaries and whether to include the allowance or not,” a finance official told RFA, speaking on condition of anonymity.

“So far, this is only speculation because the government has not notified us yet and we assume we should continue with pay as usual, but we will certainly receive a notification at some point,” she said.

She called on the Ministry of Finance to distribute an official document for use as reference in salary payment to end the “confusion.”

Budget tensions

The allowance cut comes amid budget tensions that the Ministry of Finance said were caused by lower-than-targeted tax collection coupled with a 140-percent increase in state allowance and salary payments last fiscal year, the Vientiane Times reported.

During the last fiscal year, the government spent almost 3 trillion kip (U.S. $381 million) on allowances paid to state employees.

The Ministry of Finance estimates that it will save around 1 billion kip (U.S. $127 million) by cutting the allowance, which Thongsing said last week was never meant to be permanent, adding that the move had been made to avoid possible economic crisis and social disorder.

Reported by RFA’s Lao Service. Translated by Bounchanh Moaungkham. Written in English by Joshua Lipes.