Civil Sector Workers in Laos Lose Out to Corruption And Rising Cost of Living

laos-map-305.jpg A map showing Laos.

Salaries for civil servants in Laos remain stagnant and will not be increased during the next fiscal year largely because of corruption, despite the rising cost of living in the one-party communist nation, sources inside the country said.

Sila Viengkeo, vice minister of finance, told a press conference at the National Assembly [parliament] that civil servant salaries, which have not been increased during the current fiscal year, would not be raised next year, according to a report by the Vientiane Times on Monday.

A civil servant, who declined to be identified, told RFA’s Lao Service that current salaries are not enough to cover personal expenses.  

“Three meals per day cost 50,000 kip (U.S. $6.14) each, so in total they cost 1.5 million kip (U.S. $184) per month, not including other expenses, while my salary is only 1.2 million kip (U.S. $147),” he said.

As an example of the rising cost of living, he said a bowl of noodle soup now costs 25,000 kip (U.S. $3) compared to 20,000 kip (U.S. $2.45) last year.

This makes civil servants’ lives more difficult because their current salaries are not enough to meet their daily expenses, he said.

“To resolve the money problems, I need to earn additional income by raising ducks and chickens in the house and growing vegetables for family consumption,” the government worker said.

Some civil servants must borrow money from individuals and pay 10-percent interest to make ends meet, he said.

Lao ministries, government organizations and local authorities employed about 150,000 civil servants, or more than 2 percent of the country’s population, in 2013, according to government information.

‘Poorer and poorer’

But while the majority of civil servants face a financial crisis because of stagnant salaries and often delayed salary payments, those who work in tax collection and at customs agencies have avoided such woes because they receive more money than other public administration employees, sources said.

During a parliamentary session last month, a lawmaker questioned Finance Minister Lien Thikeo about why tax and customs officials were financially better off than other civil servants.

Lien, however, did not have an answer.

“It is well-known that officials in the tax and customs sectors in Laos earn extra income somehow by getting involved in corruption, so they can have big houses and luxurious cars," said a finance official in a government office, who declined to be named. "This causes money to leak from tax collection."

“Only some servants who sit in the right chairs get richer, while others become poorer and poorer,” he said.

The country’s tax collection system cannot meet national targets because of  the corruption, and the investigation mechanisms of state audit organizations do not work as they should, sources said.

Where’s the money?

During a meeting of the National Assembly on July 8, a lawmaker criticized a report issued that day by state audit organizations for its lack of content and convincing evidence about how much state money had been lost to corruption.

“When this audit report was compared to the previous one…, it was a theoretical report rather than a practical one,” said Vanpheng Keonakhone, a lawmaker who represents Vientiane. “The exact amount of money lost to corruption has not been reported, so we can’t see what the positives and negatives are, and which organizations are in debt and by how much.”

Although the audit report specifies that customs tax exemptions for gasoline and imported vehicles are likely to rise over the next few years, it does not identify who is involved in related corruption or how many liters of gas are subject to graft, she said.

Laos has experienced a financial crisis over the last three years largely because of corrupt public sector employees who siphon off money for personal gain, depleting government coffers and resulting in delayed salary payments to public sector employees.

In 2013, the government declared a salary increase for public administration workers, but was unable to deliver because it did not have enough money.

Reported by RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Roseanne Gerin.

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