Is Laos Really Launching a New Corruption Crackdown?

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Is Laos Really Launching a New Corruption Crackdown?

A closer look at the developments underway and their significance.

Since coming to power in April 2016, Lao Prime Minister Thongloun Sisoulith has made grandiose claims about tackling corruption. He wants to rid it from the country’s most important sectors, he has said, and he aims to restore the image of Communist Party officials in the eyes of the public. For years, apparatchiks have been considered opulent, distant, and, most importantly, perennially on the take.

Thongloun has made some inroads in this respect. He has outlawed the timber trade, a rich source of bank-handers and a chief cause of deforestation. He has held public auctions of Party leaders’ vehicles, some of which sold for hundreds of thousands of dollars. Last year, he sacked two provincial governors – one from Attapeu, the other from Xieng Khouang – after they were accused of profiteering from the timber trade. These were high-profile dismissals, rarely seen in the past, and they have certainly afforded Thongloun some public support. Most political analysts say his approval rating is high, even if the Party’s isn’t.

For all this, and more, corruption appears to be getting worse. Laos dropped 12 places in the latest Transparency International index. Radio Free Asia has quoted officials saying that the government last year lost three times as much money in revenue than in 2016. Optimists assert this is actually a positive development; petty corruption is on the rise because of increased efforts to tackle it. Public sectors workers and Party officials know they must now skim more money because they won’t be able to do so in the future, this argument goes. Pessimists, however, simply say that nothing has really changed under Thongloun’s watch and the Party is as corrupt as ever.

The truth, as it often does, probably lies somewhere in between; there has been change, but nothing as radical as the government contends. Still, changes are important to take notice of in the midst of some continuities.

The first is that this administration, compared to previous ones, has been far more open about corruption amongst its officials; so much so that its openness now appears conspicuous. National Assembly representatives have been more stringent in their criticism of corruption. “Officials, businesses, and investors are all accomplices… These people are bad,” one said in November, for example. By making its anti-corruption campaign public, the Party hierarchy is now doubt trying to portray to Laotians that it takes the matter seriously, necessary as corruption remains one of the people’s greatest annoyances, which has affected the Party’s legitimacy over the years. Thongloun and senior figures appear genuine about trying to restore the morality and ethics of the Party, if only to ensure that the Party maintains some legitimacy – and maintains power.

A second possible change has been decentralization in anti-corruption activities. Statistics are hard to come by in Laos, but two recent reports offer indications of what has taken place. In April, China’s state-owned Xinhua reported that the Party’s Inspection Committee had investigated 146 cases of corruption last year; 994 people, 908 of whom were Party officials, were found to be involved in graft. Another 420 people, including businesspeople, are also under investigation. And this month, Radio Free Asia reported that in the space of a few months roughly 80 government officials have been charged with graft offenses, as well as dozens of senior executives from major firms who are accused of running “ghost” projects. As of last month, the Party’s Inspection Committee has sentenced 14 officials for graft, the report added.

There is most likely some cross-over in these figures. But, importantly, what RFA reported was that Provincial People’s Courts have been instrumental in recent months in sentencing those accused of corruption. Last month, Xayaburi’s Provincial People’s Court jailed five Party and government officials for graft. Incidentally, Xayaburi province’s budget is thought to be missing $850,000, reportedly chiefly because of graft. Oudomxay’s Provincial People’s Court this month sentenced roughly a dozen people to prison, also for corruption. The decision to sack two provincial governors last year is thought to have come directly from Thongloun, while the central Inspection Committee led the charge against many of the officials sentenced last year. Now, however, with Provincial Party Courts playing a more important role, it could point to a decentralization of anti-graft efforts.

The last noticeable change is that Party is more vocal about going after businesspeople, not just Party officials. This is especially true for those connected to the construction industry. Deputy Prime Minister Bounthong Chitmany, who also heads the national Anti-Corruption Agency, admitted in October that graft in this sector “is getting worse.” He added in his address to the National Assembly: “The real cost of building a one-kilometer length of road is only $400,000, but the government ends up paying $1.7 million. Thus, $1.3 million is lost.”

There is no doubt that anti-graft efforts in this area are in part motivated by economic concerns. The government is in considerable debt, which could become very serious and problematic in the coming years, according to some sources. With the Party forced to impose some austerity measures, every penny now counts, compared to the Party’s free-spending days in the past. And if the government is to maintain economic growth, it needs to invest, chiefly in infrastructure and construction.

Whether this is a new phase in Laos’ anti-corruption campaign, which pales in comparison to graft purges currently taking place in Vietnam and China, remains to be seen. Some analysts argue a genuine anti-corruption campaign would have to sweep away most Party officials, which Communists in Vientiane are highly unlikely to do. More likely, the campaign will continue at a slow and steady pace, noticeable when a high-profile figure is involved (such as the provincial governors), but conducted behind-the-scenes most of the time. Expect more rhetoric from the Party, though hardly any more transparency.