Corruption arising in Lao society has been called a major obstacle for development and likened to termites eating away at the nation.

The rise in cases of corruption has been attributed to the change in the economic system from a planned economy to a market oriented system.

“There was a lot of corruption in the old regime, but after liberation in 1975 the corruption situation was controlled by the Party and Government,” said Vice President of the State Inspection Committee, Mr Langsy Sybounheuang.

According to the lecturer, Mr Langsy, after Laos opened its relations to the world, corruption became an outstanding problem in the society. “There are many more avenues to pursue corruption and hide the evidence,” he said.

“If there is a lot corruption in countries that have many parties, the ruling party will loose its power for the next term, because the people will not vote for the corrupt party. In the countries that have one party, the people will rise up and overthrow the government. This is the danger of corruption,” he explained.

Mr Landsy continued to explain that in countries that are managed by an autocratic state system, corruption arises from the misuse of state subsidies. In a democracy that lacks rules to control corruption, leaders make closed-door decisions. The government bureaucracy is large and it is tradition for bureaucrats to give gifts to each other in exchange for services. Leaders do not provide enough education to their lower cadres.

The speaker talked about ways to limit corruption by saying that making management processes accountable through inspection following the principles of good governance and democracy, the people can participate in and can inspect the state activities. This would entail, according to the speaker, eradicating bureaucratic rules and red tape that do not fit with the situation.

According to Mr Langsy, the Lao People’s Revolutionary Party has clearly stood for the eradication of corruption. The Party has raised the problem of corruption at its Fifth Congress, aiming to warn Party members and alert them to the tricks of corruption.

The speaker identified three forms of corruption. “The corruption in our country happens in the purchase of materials and project bidding. The ministries have their partners and most of the bidding conducted by the ministry will be won by their partners,” Mr Langsy added.

He said that another form of corruption happens where there are powers to bargain. For example, customs officials bargain with the traders to pay lower taxes and this bargaining typically occurs when people want the facilities, need permission or need something quickly.

“In previous years we found many cases of corruption and we could confiscate property but could not punish the corrupt people,” Langsy said. He said that his organisation lacks staff who have the ability to check and know the tricks of the corrupt people. In addition, Laos lacks specific laws on corruption.

The Anti-Corruption Division of the General Police Department of the Ministry of Security accepted that the corruption, which is happening in Laos, has negative impacts on politics, economy, and society and culture of Laos. “The corruption is a threat to the very nature of our Party and Government. It is the number one challenger and is slowing down the state management,” said Chief of the Anti-Corruption Division, Major General Boualaphan Siphomma.

Corruption is a most dangerous problem. It causes conflicts and unfairness in the society and make the people disbelieve the leadership of the Party and the management of the Government. It also opens the opportunity for critics to make false charges about the Party’s policies, according to Major Boualaphan.

Major General Boualaphan Siphomma also talked about the corruption, which is done by state officials such as illegal trading, where officials cooperate with the traders to declare fake accounts and allow the traders to pay lower taxes than they should. There are state officials who ask for money from the people when they come to apply for something or ask permission for something. The officials try to delay their documents unless they get money. In some cases, officials overcharge people for services.

In the last few years there has been much corruption. The State has lost a lot of money from embezzlement. The Civil Aviation Department for example could not account for US $380,000 while the Lao Commercial Bank (Banque Pour Le Commerce Exterieur Lao) could not explain where US $12 million went. The Lao Mai bank lost more than 6 billion kip and the National Treasury lost more than 350 million kip.

To stop the storm of corruption in 1999, the Prime Minister issued an anti-corruption order aiming to increase the consciousness of the law among state officials. In addition the order defined rules for the state officials and designated 16 prohibited articles. Among these articles, it is prohibited to open private documents, prohibited to delay the processing of documents, prohibited to keep state revenue a secret, prohibited to use power that comes with duty, prohibited to receive gifts in exchange for services and materials or for bids on projects. It is also prohibited to be an adviser without permission from the organisations and prohibited to open accounts in the foreign banks.

Phonekeo Vorakhoun, VTE Times, August 31, 2002