State enterprises in need of reform
State enterprises in need of reform
A total of 99 state enterprise units need to improve or reform their business operations because they are not productive, according to the National Committee for Business Development in 2013.
Meanwhile only six units were classified as highly effective and 27 units should improve their organisational structure, the committee found.
According to the committee's report, of Laos' 132 units the committee collected information on 77 units, which have a combined total of 2,958 billion kip in registered funds and 9,492 billion kip in business funds.
Together they contributed 841 billion kip to the national budget. The government also received 343 billion kip in dividends from this sector, the committee reported at the annual enterprise meeting held in Vientiane last week.
In a bid to strengthen and develop st ate enterprise units this year, the committee will improve those units that are currently operating in a protected monopoly environment and must improve ahead of exposure to competition.
The committee will seek to upgrade state enterprise units that are not performing effectively by encouraging them to form joint venture businesses or undertake other reforms, especially state enterprises that are 100 percent government owned.
The committee will encourage them to act more responsibly by coordinating with the Ministry of Finance and relevant sectors in financial and accounting systems improvement as well as complying with other rules of business operation.
Better coordination will help state enterprise units to develop new technology, ensure transparency, and provide accountability for inspection personnel.
The committee advised that state enterprises should boost their responsibility in managing their operations and take responsibility for the profits and losses which result.
The committee will also provide favourable conditions for state enterprises to access funding and grow their business operations.
Despite the fact that Laos' economy is continuing to grow, business operations are still struggling with various challenges, especially budget issues and the impacts of natural disasters.
It is necessary to step up development and improve the business sector so that it can contribute more to the economy and overall socio-economic development.
Gross Domestic Product (GDP) growth in Laos has been consistently around 8 percent in recent years. Per capita average annual income stood at about US$1,500 last year while the government collected revenue of about 41,800 billion kip or 19.6 percent of GDP, according to the committee's report.
vientiane times
