A labor ministry official in Laos has dismissed calls for a “solution” to the problem of foreign companies bringing their own workers into the country, saying that the businesses won’t hire domestic workers because the government has failed to adequately train them.
The labor situation in Houaphan province highlights lax oversight of foreign investment in Laos, where companies — many of which are based in China and Vietnam — flock to exploit natural resources with little regard for the impact on the environment and communities.
Authorities typically give foreign companies free rein to operate in Laos because the country is starved for outside investment.
On March 6, Sounthone Xayachack, the vice president of the Lao National Assembly, or parliament, ordered Houanphan authorities to “solve worker shortages” and “prevent foreign companies from bringing in their own workers” while on an official visit to the province.
She noted that in 2024, the Lao government could only provide slightly more than 26,000 jobs for domestic workers. According to the World Bank, the Lao labor force totaled just over 3.5 million people in 2023 — approximately 42,000 of whom were unemployed.
A 2023 report from the Ministry of Planning and Investment claimed that there were 2,600 companies in Laos looking to fill at least 153,315 positions.
Despite the shortage of workers, an official from the Department of Labor and Social Welfare recently told RFA Lao that foreign firms operating in the country aren’t interested in hiring locally because “the majority of Lao workers have no skills or experience.”
“They don’t meet the requirements of the companies' needs, so both Vietnamese- and Chinese-owned companies do not want to hire our workers,” said the official who, like others interviewed for this report, spoke on condition of anonymity due to fear of reprisal.
“The government lacks the budget necessary to train Lao workers with the skills that they need.”
Few willing to hire Lao workers
A Houanphan provincial official agreed that it would be “impossible” to prevent foreign firms from bringing their own workers “because our Lao workers don’t meet their requirements.”
“[The hiring situation] depends on each company’s needs,” said the official, who also declined to be named. “There are a few foreign companies that are willing to hire Lao workers.”
Another high-ranking labor ministry official told RFA that Houanphan province “has been facing a worker shortage,” but did not provide statistics to back up her claim.
It was not immediately clear if the shortage the official mentioned referred to a lack of workers or a lack of “skilled” workers, but she did note that “even Vientiane province also relies on Burmese workers.”
In Houanphan, she said, many Lao workers choose not to work for foreign companies “because of lower compensation” and because the province is located along the border with Vietnam, and they worry that they would lose their jobs to Vietnamese nationals who are looking for work.
The official said that many Chinese and Vietnamese investors run businesses in the province — including Chinese mining firms — “but I don’t think they ever hire local people.”
Bribes exacerbate problem
Other observers told RFA that a lack of skilled domestic workers is only part of a larger problem, which includes local officials receiving bribes to look the other way when foreign firms bring in their own employees without work permits.
“It may be because of officials receiving money under the table so that they keep quiet and never inspect the projects,” she said. “Additionally, Lao government officials are scared to confront Vietnam or China.”
A resident of Houaphan confirmed to RFA that many of the workers “are migrant workers” from countries that foreign investors are based in, while local Lao workers are choosing to relocate to other provinces to find jobs.
“I admit that our Lao workers' skills are not good,” he said, adding that even the Lao government is forced to hire foreign workers for certain projects.
“For example, a Vietnamese-owned company was granted a project to build a building for the Lao government, but in the end, most of the workers were from Vietnam,” he said.
Translated by RFA Lao. Edited by Joshua Lipes and Malcolm Foster.