Lao authorities admit that public investment on development projects needs better management as lack of transparency has led to budget wastes.
In his recent speech to the 8th
Ordinary Session of the Lao National Assembly's Sixth Legislature, Mr.
Sinlavong Khoutpaythoun, Minister of Planning and Investment, said that management and disbursement of budget allocated for various government-funded development projects are still inefficient in many aspects, due mainly to ambiguity, lack of transparency, and decentralization.
In addition, many development project costs are over-assessed, and many project contractors have violated agreements. Also, some completed projects do not meet required standards in all aspects. This has caused direct impacts on the government's efforts to reduce poverty in rural areas of the country, since government-funded development projects aim primarily at poverty reduction.
It will also affect the Lao government's ability to get more foreign assistance to finance its development projects in the future. For the 2008-2009 fiscal year, Laos received a total of 560 million dollars in foreign aid, of which $383 million was grants while the rest, $177 million, was long-term, low-interest loans.
Meanwhile, Transparency International says the main cause of ineffective spending of government budgets is corruption, which is prevalent in the public sector. It ranks Laos 158th among 180 least-corrupted nations in 2009, which means Laos is among the most corrupted countries in the world.
In another development, the Lao State Inspection Commission says spendings on flood relief projects for the 10 affected provinces exceeded the approved budget of 217 billion kips by as much as 325 billion. In spite of that, many flood-damaged infrastructures were poorly repaired, and new ones were poorly built.
Songrit Pongern reported from Bangkok on November 28, 2009. Listen to Songrit's report for more details in Lao. (English translation by Buasawan Simmala and Dara Baccam.)