Lao PM resigns amid runaway inflation and criticism over mining concessions – Eurasia Review

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Lao Prime Minister Phankham Viphavanh resigned on Friday for health reasons, retiring after serving in the role for less than two years in a booming economy with runaway inflation and a sharp decline in the value of the currency, the kip.

Viphavanh, 72, submitted his resignation to the National Assembly earlier today. He took office in April 2021 following general elections.

In the current situation, our country is experiencing many difficulties. I am no longer able to do this difficult job, he said in a speech to the National Assembly of Laos. He said he tendered his resignation to the president on December 15, and the president granted his request.

The change in leadership comes as the government tries to temper inflation which has hit nearly 40%, with people complaining that the price of some basic necessities has nearly doubled.

About 500,000 people, or 21% of the working population, are unemployed due to the economic city center and the coronavirus pandemic, according to the Ministry of Labor and Social Welfare.

Minutes after Viphavahn’s speech, lawmakers in the country’s one-party government voted overwhelmingly for Deputy Prime Minister Sonexay Siphandone to be the new prime minister of Southeast Asian nations.

President Thongloun Sisoulith, who is also secretary general of the Lao People’s Revolutionary Party, has served as the country’s president since March 2021.

In his acceptance speech, Siphandone, 56, said he was honored and very proud to have been elected Prime Minister. He is the Soviet-raised son of Khamtai Siphandone, 92, former president of Laos.

The country’s constitution allows prime ministers to serve up to two five-year terms.

Viphavanh’s resignation comes amid criticism that he has granted too many mining concessions, particularly in the northern provinces of Xieng Khouang and Xaysomboun, a source familiar with the political scene said. When taxes on operations failed to flow into the state budget, the country’s debt skyrocketed.

Viphavanh has also failed to tackle rampant corruption, the source said.

The chairman of the State Audit Organization reported to Parliament last week that 141 billion kips, or about US$9 million, of tax revenue had not entered the state budget and that more than 1,430 companies, mostly Chinese, had not paid taxes to the Lao government for over a year.

Finance Minister Bounchom Oubonpaseuth also told lawmakers that at least 53 employees in his ministry had been sanctioned or fired for corruption in 2022.

Some Lao citizens said they hoped the new prime minister could solve the country’s current financial and economic problems, especially high inflation and the depreciation of the Lao currency, the kip.

But one retail store owner in Savannakhet province was not optimistic. I don’t think the new prime minister will make a difference, he said. Whoever is at the top, it will be the same.

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