State enterprises in Laos are to be reformed under a new plan outlined by the government that could see top executives sacked.
Vientiane Times reports that failed executives heading state enterprises could lose their jobs if they perform poorly and the enterprise they head faces continued losses.
Finance Minister Bounchom Ubonpaseuth told National Assembly members at the ninth legislature held recently that the Politburo and the Central Committee had instructed the government to resolve issues surrounding the country’s struggling state enterprises.
A committee is to be established that will see the reform of state enterprises, according to the finance minister, with state personnel no longer to be accepted for deputy positions at certain strategic state enterprises.
In the case of non-strategic state enterprises, board members will have the right to select a business director, rather than a government minister selecting a person for the position as in the past.
Under the new policy, the board will then have the right to remove a director who performs poorly.
“If the enterprise makes a loss under a director this year, they will be fired next year,” Mr. Bounchom was quoted as saying by the Vientiane Times during the National Assembly meeting.
Laos has a large number of state enterprises that are performing poorly, making huge losses and creating massive public debt.
National Assembly members noted during talks that while in China and Vietnam, state enterprises have become the engines driving success for their countries, in Laos they make only losses.
According to Mr. Bounchom, investigations will be made into the head of all state enterprises, especially those making losses under the same director for a number of years.
Professional experts will be called in to assist with the reform, according to the Vientiane Times, and will likely do away with bonuses, extra months’ salaries, and other allowances paid to executives at state enterprises stemming from the state budget.