The National Assembly (NA) has approved a major restructuring of the government by merging several ministries to improve efficiency, strengthening anti-corruption by granting local administration more power, extending retirement ages for civil servants, and approving tax breaks for investors in Smart City Development areas.
On 20 March, all 156 members of the NA unanimously supported the plan, which reduced the number of ministries from 17 to 13. The decision followed a proposal by Prime Minister Sonexay Siphandone during the 2nd Extraordinary Session of the NA’s 9th legislature.
Ministries Merged to Streamline Administration
Under the new structure, the Ministry of Planning and Investment was merged with the Ministry of Finance, keeping the name Ministry of Finance.
The Ministry of Energy and Mines was combined with the Ministry of Industry and Commerce, which will continue to operate under the same name. The Ministry of Natural Resources and Environment was merged with the Ministry of Agriculture and Forestry, and the new entity is now called the Ministry of Agriculture and Environment.
The Ministry of Home Affairs was dissolved, and its responsibilities were divided among different entities. It was placed under the Party Central Committee’s Personnel and Organization Committee, while governance, mapping, and religious regulation duties were transferred to the Prime Minister’s Office and other relevant ministries.
Additionally, the Ministry of Information, Culture and Tourism was restructured, with the information sector now managed by the Party Central Committee’s Propaganda and Training Board. This led to the ministry being renamed the Ministry of Culture and Tourism.
The government expects the merger process to be completed by May, while restructuring at the local administration level is set to finish by July. The changes were made in line with a recent resolution passed by the Lao People’s Revolutionary Party Central Committee.
Amendments to the Constitution
During the same session, lawmakers approved all the draft amendments to the Constitution. Key changes include giving more power to local administrations, promoting the development of an autonomous economy, and strengthening anti-corruption measures by granting more authority to auditing and inspection agencies.
Changes in Local Governance, Civil Servant Laws
To align with the constitutional amendments, the NA also approved changes to the Law on Local Governance. The Law on Civil Servants was also revised, with two major updates; The retirement age for government employees has been increased from 60 to 65, and the maximum age for recruiting new civil servants has been extended from 35 to 40.
Special Incentives for Smart City Development
The NA also approved incentives to boost investment in the Amata Smart & Eco City project in northern Laos. These incentives include tax breaks for companies investing in the development, which aims to promote economic growth and innovation in the region.
The Lao government believes these changes will improve efficiency, strengthen governance, and attract more investment, as officials aim to implement the restructuring to support the country’s long-term development.