Building of public offices in Laos suspended until 2020
LAOS has banned construction of public office buildings until 2020 as part of efforts to implement its frugality policy.
The government also reaffirmed that open bidding must strictly be followed in all state investment projects as stipulated in the country’s laws.
These instructions were made via Prime Ministerial Order No 09 signed by Prime Minister Thongloun Sisoulith on May 19.
The order aims to ensure the frugal and effective use of the state budget to maximise the interests of the nation and retain the resources required for poverty reduction efforts.
Over recent years, the government has increasingly imposed measures in pursuit of a national frugality policy including the issuance of a 2016 decree regarding thrift and anti-extravagance.
Nevertheless, the enforcement of those measures has not always been accomplished as anticipated.
Worse, expressions of opulence and extravagance in Lao society have seen a continued tendency to increase.
In support of measures to control spending, the government has decided to prohibit the construction of new public offices. In the case of necessity, proposals for the construction of new office buildings must be submitted to the government for consideration and approval.
In 2014, the government made a major cut in spending on development projects in response to the country’s revenue shortfall to enable the government to maintain liquidity.
Development projects that the government halted in that year were mainly related to infrastructure such as the construction of new public offices and other facilities.
Instead, the government sought to focus more on projects providing swifter return on investment to minimise the impacts from such development projects stalling.
Over the past years, state investment projects have been plagued by allegations of misappropriation of funds and inflated budgets.
The PM order told sectors to monitor such investment projects to ensure the state budget is being put to the most effective use possible while addressing any irregularities that may arise.
The PM order said no more projects would be granted to any company without proper competitive bidding to ensure that the national budget is disbursed effectively.
Purchases of new vehicles for administrative affairs will not be permitted for 2018.
The government sector has been told to make budget savings by organising meetings, seminars and workshops at their own offices instead of renting venues at hotels.
As revenue collection is expected to accomplish only 96 percent of the target for 2017, the government has announced that some new development projects planned for this year could be postponed until next year.
According to a report from the Finance Ministry, the budget deficit is projected to reach 9.34 trillion kip (Bt38.7 billion).
If the money needed to repay debts owed on loans and bonds is added, the total soars to 15.93 trillion kip.
Savings measures including the suspension of new projects aim at strengthening fiscal stability, reducing vulnerability to economic shockwaves that can be compounded by chronic levels of public and private debt.
