Civil servant pay plan faces infrastructure hurdle

Remoteness and lack of infrastructure are proving challenges as the Ministry of Finance works to have all government officials’ salaries paid by bank transfer by 2011.

“It is a challenge to implement the system in every district because some rural areas lack good infrastructure,” said the ministry’s Deputy Head of Office, Mr Sanya Praseuth, recently.

So far the system has largely been implemented in urban areas, as some rural districts lack electricity, and communication by road or telephone is difficult.

“But our staff everywhere must get their salaries regularly to pay their families’ expenses and as an incentive to work,” he said.

The system may not be fully in place nationwide by 2011, “but it must be about 96 percent complete,” he said.

The system will eventually be in place in almost all districts of the country because local banks and post offices are cooperating to introduce the new method of payment.

Once bank transfer payments are taking place nationwide, it will help the government to know the exact numbers of officials and help them to budget for salaries, he said.

Currently this system is in operation in urban districts of Borikhamxay, Khammuan, Savannakhet, Champassak and Attapeu provinces, and throughout the capital.

The ministry expects officials in Luang Prabang, Xayaboury and Xieng Khuang provinces will start receiving their salaries by bank transfer next January.

Vientiane has about 68 state bodies with over 9,000 staff.

Of these, 5,392 employees in 35 sectors have opened bank accounts for the deposit of their salary.

The ministry’s office is now working to bring the remaining officials into the system.

So far the system has been a success and many government officials are now receiving regular salary payments through banks.

However, many officials have not withdrawn their salaries from banks.

In September, there was more than 24.2 billion kip still deposited in Vientiane, 3.2 billion kip in Savannakhet province and 3 billion kip in Champassak province.

Salaries are paid into savings accounts, providing a pool of funds from which the government can borrow money for use in development projects. Account holders also receive interest on these deposits. In the past there were no payments into savings accounts because all salaries were paid in cash.

The system first came into effect at the ministry in October 2007 and was introduced in the remaining ministries last year.

By Phonsavanh Vongsay
November 16, 2009
Vientiane Times