Southeast Asia Information Port (www.dnyxxg.com) – Thongloun Sisoulith, General Secretary of the Lao People's Revolutionary Party Central Committee and President of Laos, recently ordered intensified reforms of state-owned enterprises (SOEs), explicitly stating the need to help SOEs escape losses and transform them into key drivers of national economic growth. This move is of great practical significance given Laos' heavy debt burden and economic development pressures.
On Wednesday, President Thongloun chaired a meeting of the SOE Reform Committee in Vientiane, emphasizing that SOE reform is "a crucial and urgent task." He specifically instructed the committee to formulate short-, medium-, and long-term reform plans, striving to achieve fundamental changes in SOEs within the next five years. The committee, chaired by Deputy Prime Minister Saleumxay Kongmasit (the original name is a transliteration difference), is directly under the Politburo, the highest decision-making body. This move is seen by outsiders as a key step in Laos' adjustment of its regulatory mechanisms and strengthening of reform implementation, potentially breaking the previous deadlock of slow reform progress.
President Thongloun Sisoulith stated frankly that the lagging progress of reform agencies previously overseen by other departments directly led to increased losses and debt accumulation in state-owned enterprises (SOEs), necessitating a major overhaul of the regulatory system. Industry data from 2024 confirms this predicament: of Laos' 168 SOEs, only 78 were profitable, including 49 wholly state-owned enterprises. In terms of shareholding structure, these 168 SOEs comprised 102 wholly state-owned enterprises, 13 state-controlled joint ventures, and the remaining 53 had state ownership below 51%.
Dr. Kikho Chanthabouly, Vice Chairman of the State-Owned Enterprises Reform Committee, revealed at the meeting that in 2024 alone, Laos' wholly state-owned enterprises accumulated losses exceeding 2.358 trillion Lao Kip. However, he also pointed out that the overall losses are gradually decreasing, indicating that previous reforms have achieved initial success and the situation is improving. Notably, Laos has recently promoted SOE reform by introducing external cooperation, such as the acquisition of a 49% stake in Lao Airlines by COMAC (Commercial Aircraft Corporation of China), with both parties jointly developing a business improvement plan. This serves as an important practical example of SOE transformation.
Regarding the next steps in reform, Chairman Tong Lun put forward several core requirements. He emphasized that state-owned enterprises (SOEs) must improve the efficiency of fund utilization and severely rectify the chaotic situation of some enterprises engaging in extravagant spending, inefficiency, and continuous huge losses. Addressing the public's strong concerns about "SOEs suffering serious losses while their executives enjoy high salaries," he explicitly pointed out that no investigations have yet been launched into holding negligent executives accountable, a situation that urgently needs to be changed.
Chairman Tong Lun called for the selection of qualified personnel for SOE executive and core positions through a merit-based recruitment mechanism, resolutely eliminating nepotism. He also demanded the establishment of a regular SOE inspection and evaluation mechanism to ensure efficient and compliant enterprise operations and strict implementation of business development plans—a weak point in the performance of many SOE executives in the past. Furthermore, he stressed the need to improve the transparency of SOE operations, streamline bloated organizational structures, and eliminate unnecessary redundant personnel.
"Reform must be truly implemented; SOEs must be modernized to make them competitive in both domestic and international markets," Chairman Tong Lun reiterated at the meeting. This meeting comprehensively reviewed the progress of Lao state-owned enterprise reform and clearly outlined future development plans, laying the foundation for further reform.
