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Laos: Govt to Boost Efficiency of State-run Enterprises
Source: laovoices
Source Date: Friday, October 21, 2011
Focus: Information Access, Government Portal, Citizens’ Service Delivery, E-Government
Country: Lao People's Democratic Republic
Created: Oct 25, 2011

The government will revise its policy on state-run enterprises, in a bid to strengthen the management and efficiency of these businesses.

 

Under the National Socio-Economic Development Plan for 2011/2012, which came into effect at the beginning of this month, the government will identify those enterprises in which it will retain a 100 percent stake and those in which it will seek investment from the private sector.

 

The move aims to enable the government to mobilise funding for the most important areas of business, to ensure the supply of certain goods and those that are related to national security.

 

The government created many state-run enterprises after the founding of the Lao PDR in 1975. However, some of these have since gone bankrupt due to poor management. Others are still functioning but struggle to survive amid growing competition.

 

Policymakers say that industries in which the state must hold a share of at least 51 percent are national security, construction materials, food supply, telecoms, and aviation, because of their pivotal importance to development.

 

The government wants to hold the majority share in these industries to ensure they follow its development policy, and in case the private sector is not interested in these sectors.

 

For example, a private airline may not be willing to fly to remote parts of the country due to the lack of passengers, policymakers said. However, a state-run airline will fly to these areas to boost links between rural areas and cities in line with government policy.

 

Officials at the Business Improvement Office said the government has given the green light for state enterprises such as Lao Airlines to be listed on the stock market, to generate more capital for growth. The two state enterprises BCEL and EDL Generation have been listed on the stock market after mobilising investment funding of more than US$120 million. ETL plans to list on the stock market at the end of this year after selling 30 percent of shares to the public.

 

Lao Airlines also intends to list but has been unable to name a date, saying it must first improve its management system to ensure effective and transparent operations, one of the main conditions for listing on the exchange.

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