Laos continues to struggle with rampant corruption despite recent efforts to eliminate it from the halls of government, according to the country’s State Audit Organization (SAO).
At a Lao National Assembly meeting earlier this month, the organization reported massive losses resulting from under-the-table deals made by officials in all levels of government.
“The SAO audited 51 organizations, 19 programs that received aid and grants, six state banks, and 23 state enterprises, discovering that almost U.S. $50 million was lost or unaccounted for in the 2018 budget,” said SAO President Viengthong Siphanhdone at the assembly on November 7.
Several MPs also complained about the massive losses. An MP from the capital, Bouakham Thipphavong, said “In the last three years, our revenue collection has been down, but our need for development has gone up and up.”
“This is a disaster,” she said, “and as a result, we can’t carry out our development plans.”
“The audit shows increasing violations of financial codes of conduct and use of revenue outside of the system. Assets have been hidden from inspectors,” she added.
She told the assembly that they could no longer turn a blind eye to the problem.
“We have to crack down hard both in the villages and at higher levels. The government is hiring fewer employees because it doesn’t have money. The government should punish the culprits to full extent of the law,” she said.
Also representing the capital, Valy Vetsaphong echoed her colleague.
“We have to resort to strong measures because every government department including the justice system has many corrupt officials. So far, we have been too lenient; punishment has been too light,” she said.
Another MP from the capital, Saythong Keoduangdee, described the way in which many of the officials are able to divert government funds for personal use.
“Some state workers take money from the government budget, split it among themselves, then deposit it into their own bank accounts. In other words, they pocket the money,” he said.
“They deposit only a fraction of it into government coffers. Our economy is growing and people and businesses are paying more taxes, but less money is going to government,” he added.
“That’s why our government is getting poorer and poorer and our government workers getting wealthier and wealthier. That’s wrong; that’s illegal. Our country is going to go bankrupt soon,” the assemblyman said.
From Xieng Khouang province, Sengkham Chongsana, said that bribery and under-the-table money are “everywhere.”
“Our government employees profit from everything, from wood, logs, land, government cars, and houses,” he said.
Money back not guaranteed
Thongchanh Manyxay from Luang Prabang province described recovery efforts for lost funds.
“The audit of the government investment programs indicated that U.S. $200 million has been recovered for 18 projects and another $219 million from another 12 projects. Why did we lose that much money in the first place?” he asked.
“That’s government money for government projects,” he said, adding, “Why did we approved such failed projects?”
The Luang Prabang MP said corruption at this level would be unthinkable outside of Laos.
“You can’t do that in other countries. Each department must defend its expenses,” he said.
“[In other countries,] each department would have been questioned in detail. Our planning department has done that but not well enough. So, I’m suggesting that the government do more studies, inspect more, and get more bids for any [future] project,” he said.
“If not, we’ll lose more money. When we lose it, it’s gone. Our country is still poor, and these massive losses will affect our economic development,” said Thingchanh Manyxay.
Several other MPs urged the assembly to begin a more effective crackdown on corruption.
Bouakham Thipphavong, also from the capital, said that the government should not be so lenient, lest the country face a crisis.
“If we were to punish [corruption] more harshly, corrupt officials will be scared and might not continue to be corrupt,” she said.
“We have no choice but to enforce our laws,” she added.
RFA spoke with a resident of the capital, who agreed that there is too much corruption in Lao society.
“Most government projects are road construction projects, and most of these projects are overpriced,” the source said.
“If the real cost of building a road is only, say, $50 million, and the government pays out $100 million for it, there’s a loss of $50 million.”
Lao Prime Minister Thongloun Sisoulith has vowed to tackle corruption since coming to power in 2016, but the government has made little headway with the problem, which is widespread due to weak laws and lack of enforcement by authorities.
Transparency International, a Berlin-based global anticorruption coalition, ranked Laos 132 among 180 countries on its Corruption Perceptions Index for 2018 and gave the country a score of 29 on a scale in which 0 is highly corrupt and 100 is very clean.
The group said corruption remained endemic among most of the 10 members of the Association of Southeast Asian Nations (ASEAN), of which Laos is a member state.
Reported and translated by RFA’s Lao Service. Written in English by Eugene Whong.