State enterprises mull hiring management professionals
State enterprises mull hiring management professionals
The government is considering hiring professionals to manage state enterprises to enable them to survive as business competition hots up.
The government magazine Manager reported recently that senior government officials have agreed to the initiative in principle. The move would permit state enterprises to hire private sector professionals for top management positions if it was deemed to be necessary.
Under the new policy, the government would retain its officials on the management board to ensure the enterprise continued to operate in line with government policy.
It is unclear when the government will enact the new policy but many believe that placing professionals in senior management positions would boost productivity, which is increasingly required in times of growing competition.
At present, the top managing directors of all state enterprises are government officials. But some have no experience in business management and struggle to make their operations competitive. In a free market, a competitive edge is essential to win over customers.
The magazine also reported that the government intends to convert state enterprises into public companies that are listed on the stock market. This will enable the public to join forces with the government to develop and expand businesses.
At present, two partly-owned government companies, EDL-Gen and BCEL, are listed on the Lao Securities Exchange. Lao Airlines is another state-owned enterprise that has expressed interest in listing. The government believes that listing state companies on the stock exchange will result in the management of such operations becoming transparent.
The government also intends to invest in businesses in which the private sector has little interest, to ensure the country has a diversified economy.
At present, there are 139 state-owned enterprises with total assets of 19,430 billion kip or 33 percent of total GDP.
In 2011 these enterprises contributed 8.2 percent of GDP. In that year there were 48 state-private joint ventures with a total asset value of about 4,292 billion kip. These operations contributed 7.3 percent of GDP in 2011.
The government is also encouraging the private sector to invest in remote areas of the country as part of job creation efforts. The government is offering various incentives including tax breaks to companies that agree to invest in rural areas.
The government is also committed to improving the business climate, to make it easier for Lao and foreign business to start up a new concern. The government has eased restrictions on imports and exports as part of its obligations as a member of the World Trade Organisation.
vientiane times
