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Saturday, March 15, 2025
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Laos Tackles Bureaucratic Bloat with Major Government Overhaul

This Week

As Laos continues to grow and change, the Lao People’s Revolutionary Party has recognized that its government structure isn’t keeping pace with the country’s fast development. In response, the Party has announced a major restructuring, focusing on both ministry and constitutional changes to improve the overall governance framework.

Despite previous efforts to improve efficiency, there are still many overlapping roles and unclear responsibilities, slowing down progress and preventing the government from operating at its full potential, according to a Resolution published on 12 March and signed by Party Central Committee General Secretary and Laos’ President Thongloun Sisoulith. 

To tackle these challenges, the Party is gearing up for a major overhaul aimed at streamlining ministries, agencies, and the civil service to improve political stability, transparency, and efficiency.

This year’s resolution goes beyond ministry mergers and reshuffling, with anticipated constitutional amendments, although further details are yet to be revealed. 

The goal is to align the government structure with the Party’s vision of a lean, efficient system that better manages resources and reduces bureaucracy.

Reducing Redundancies to Boost Efficiency

By 2024, the central government alone had 47 sectors, 456 departments, and over 2,200 divisions, leading to confusion over who does what and slowing down decision-making, the notice stated.

This lack of clarity is causing a lot of inefficiency, according to the March Resolution. It’s affecting everything from business operations to government services. 

The civil service is also too big, the document suggests, with over 168,000 civil servants–about 2.18 percent of the population. 

This is putting a huge strain on the national budget, with government salaries alone eating up nearly 40 percent of the annual revenue. 

This data shows that the government is spending a lot but not getting enough in return, leading to a growing budget deficit, as confirmed by the document signed by President Thongloun.

With so many people in the public sector, job roles are unclear, and some civil servants end up doing multiple jobs at once, for instance working as taxi drivers overnight to support their families. 

This, combined with low wages that haven’t kept up with the country’s growth, has led to frustration and low morale among workers. Currently the minimum salary in Laos is LAK 2,500,000 (approximately USD 117). Despite its recent increase from the previous LAK 1.6 million (about USD 75), the amount remains generally inadequate to address the national challenge of labor shortages and increasing school dropout rates. 

To fix this, the Central Committee has decided it’s time to make some major changes. 

They want to streamline the government even more, merge similar departments, cut out unnecessary layers, and make everything work more smoothly. 

The goal is to improve leadership, make the budget go further, and create a fairer, more effective salary system. 

In the end, the Party hopes this restructuring will lead to a government that’s more responsive, transparent, and capable of handling the challenges that come with a growing economy and a fast-paced regional development.

Streamlining Ministries and Civil Service to Cut Redundancies

According to the latest notice, as part of the overhaul, personnel will be reassigned based on specific needs, with a focus on promoting skilled individuals for the broader national benefit.

The restructuring process will also focus on eliminating redundancies, enhancing organizational flexibility, and ensuring a clearer delegation of roles and responsibilities, all in an effort to create a more streamlined and effective governance structure.

Among the expected key changes are amendments to the constitution and relevant laws, which will be implemented to establish a clear framework for the overhaul. 

In this major government overhaul, several ministries in Laos will merge to improve efficiency. The Ministry of Planning and Investment will combine with the Ministry of Finance, and the Ministry of Energy and Mines will join the Ministry of Industry and Commerce. The Ministry of Natural Resources and Environment will merge with the Ministry of Agriculture and Forestry to form the Ministry of Agriculture and Environment. 

Other changes include transferring civil servant management from the Ministry of Home Affairs to the Party Personnel Board and moving administrative functions like mapping and religious affairs to the Prime Minister’s Office. The Ministry of Information, Culture, and Tourism will also shift its media responsibilities to the Party Propaganda and Training Board and become the Ministry of Culture and Tourism.

The restructuring aims to create a more efficient, professional, and accountable government that can deliver better services for the people.

The changes will be done in stages, with central-level reforms expected by May 2025 and local-level changes by July 2025. 

According to the announcement, the goal is to make the government leaner, more effective, and better suited to the country’s growing needs.

Previous Restructurings: Ongoing Efforts to Improve Government Efficiency

The restructuring of the Lao government before the March 2025 changes occurred in 2020. This was part of an ongoing effort to improve efficiency and effectiveness in governance, driven by the 10th Party Congress in 2020. 

During that time, the government undertook major reforms to streamline administrative bodies, reduce redundancies, and improve the overall functioning of ministries and local administrations. 

The reforms were aimed at better addressing the country’s economic and social challenges, as well as improving the public service sector.

Since the 5th Party Congress in 1991, there have been calls to streamline and simplify the government. However, while there have been some steps to merge ministries and organizations, the changes haven’t been enough to make the system as lean and effective as needed. 

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