Govt’s restructuring scheme intends to cut administrative costs

Budgetary tension has forced the government to further streamline its structures in a move to ensure cost-effective and efficient administration for serving the nation.
The restructuring scheme is a major move to help the government reduce administrative costs amid a revenue shortfall and economic difficulties as a result of the coronavirus pandemic.
Deputy Minister of Home Affairs, Mr Khammoune Viphongxay, told Vientiane Times on Thursday that administrative costs in Laos remain high due to the large structure of state departments and over-employment of civil servants.
“Sectors that have similar or correlated work will be merged,” he said, adding that various ministries have already combined their departments over the past few years.
In addition, government sectors, including the Ministry of Information, Culture and Tourism and ministry-equivalent organisations, are planning to merge more divisions and departments in line with the government’s policies.
The mergers will result in a reduction of executive officials, saving state money to pay for their cars, salaries and other administrative expenses. 
However, Mr Khammoune was unable to confirm as to what extent or percentage of the restructuring programme has been implemented since the Prime Minister’s Order No.03/PM was issued on February 9, 2018.
One of the main challenges for Laos is that many ministries want to have their own offices in districts to make it easier for coordination and to get their projects done as planned.
Some districts have also established science and technology offices and post and telecommunications offices though this is not necessary to perform tasks at the district-level.
Some State bodies have established new departments so that they can promote their officials to new posts even though there isn’t  much work to do for the new departments.
Under the PM’s Order, districts are banned from having organisational structures that are the same as those at the central level, in order to reduce government spending.
Party committees at the ministry and district levels need to take into account the real needs for development of their sectors and districts. They must inspect, review and re-define job descriptions and job demands in their departments.
Over the past five years, the government has encountered financial difficulties due to the revenue shortfall and the economic slowdown  triggered by a global recession.
Therefore, the government wants to streamline its structures and reduce the excessive number of state officials so that it can reduce expenses on administrative affairs.
In 2018, Laos had about 184,000 civil servants, representing 2.8 percent of the total population, and ranking ninth among the 10 Asean member states on a per capita basis.
If Laos recruits additional officials, it means the government will have to pay more for their salaries, with less funding available for national development.  
Over the past few years, the government granted a smaller quota of civil servants to its sectors in order to reduce the number of government officials. In 2018, 3,000 new civil servants were employed in state sectors, and this was reduced to 1,500 people in 2019. For 2020, the new quota of state employees was set at about 2,000 officials.

By Somsack Pongkhao
(Latest Update August 7, 2020)