December 18, 2017

Corruption causing major loss to Laos

By: Somsack Pongkhao, Vientiane Times, December 18, 2017

Examples of Lao money/currency
VIENTIANE - The state lost more than 480 billion kip (US$57.53 million) through corruption over the past five years, and this directly affected national development and poverty reduction efforts in Laos, the State Inspection Authority (SIA) has said. 

The SIA uncovered the misappropriation in different sectors due to officials taking bribes and abusing power for their personal gain as well as the falsification of documents to embezzle state funds.

A senior inspector from the SIA, who wished to remain anonymous, told Vientiane Times on Thursday that the financial fraud mainly occurred in development projects, particularly ventures implemented without evaluation and bidding procedures.

Additionally, dishonest officials committed financial deception by embezzling state funds and assets, including money that should have been used to fund schools and improve health services across Laos.

Of the total figure of 480 billion kip, the SIA was able to retrieve 337 billion kip and it  has vowed to be diligent about getting back the rest of the money for the government. 

Over the past five years, more than 100 people, of whom 86 were government officials, have been apprehended as a result of their alleged involvement in fraudulent activities and embezzlement.

The SIA has warned it will seriously enforce the laws to counter the misappropriation of funds.

During a recent address on the occasion of the International Anti-Corruption Day recently, the SIA Vice Chairman, Mr Sinay Mienglavanh, announced that his organisation will enhance its efforts to scrutinise target sectors and ensure corruption-free projects.

This includes sectors related to revenue amassment and budget expenditure, infrastructure development projects, land use management, excavation of natural resources and prosecution of state services.   

The SIA will also concentrate on examining state enterprises and unauthorised development projects in which the value of the construction is overly expensive.

Prime Minister Thongloun Sisoulith told the National Assembly in October that road construction is a low profile, high profit activity.

He said the cost of constructing one kilometre of road should be about 3.5 billion kip but in some cases, 14 billion had been charged for a one kilometre stretch, which he described as incredible.

The UN describes corruption as a serious crime that can undermine social and economic development in all societies. No country, region or community is immune.

Every year US$1 trillion is paid in bribes,  while an estimated US$2.6 trillion is stolen annually through corruption - a sum equivalent to more than 5 percent of the global GDP.

In developing countries, according to the United Nations Development Programme, funds lost to corruption are estimated at 10 times the amount of official development assistance.

This year UNODC and UNDP have developed a joint global campaign, focusing on how corruption affects education, health, justice, democracy, prosperity and development.

In Laos, the national taskforce team has been established to scrutinise sectors and projects. The team comprises officials from all relevant sectors including the State Inspection Authority, the Ministry of Planning and Investment and the Ministry of Finance.

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