VIENTIANE, Sept. 27 (Xinhua) — Lao government has planned to establish municipalities and cities for a modern and self-sufficient city system.

Lao Prime Minister Thongloun Sisoulith issued an order recently asking ministries and provinces to form committees to study and prepare for the establishment of municipalities and cities, local daily Vientiane Times reported Tuesday.

Towns or districts must meet certain criteria before they can be upgraded to municipalities or cities. These criteria relate to population density, public amenities, and services.

Provinces are expected to submit to the government the names of towns or districts that are likely to meet the criteria by the end of 2016 or early 2017.

"Once the names of the proposed towns are submitted, a central committee will carry out inspections. It is expected that municipalities and cities could be established by 2017," said Bounphak Sombandith, director general of the Local Administration Department with the Ministry of Home Affairs.

Vientiane's four main districts Chanthabouly, Sikhottabong, Xaysettha and Sisattanak, as well as Champassak Province's Pakxe, Savannakhet Province's Kaysone Phomvihane, Luang Prabang district in Luang Prabang province, and Khammuan's Thakhaek district are likely to meet the criteria, the director said.

In his order, Prime Minister Thongloun told ministries and ministry-equivalent organizations to revise the mandates of their local line departments by defining clear mandates and responsibilities for districts, municipalities, and cities.

In this regard, he suggested that provinces and the capital Vientiane streamline the administrations of municipalities and cities once they are established to ensure they are efficient.

The Ministry of Finance was told to draw up financial legislation for the municipalities' and cities' administrations to enable these bodies to become self-sufficient in terms of their administration budget and even save some surplus for their further development.

Bounphak said the lessons learnt by many countries suggested it was advisable for special financial legislation to be introduced for municipalities and cities to enable them to become financially self-sufficient, with clear responsibilities outlined.

The establishment of municipalities and cities is in line with the amended Law on Local Administration that was passed by the National Assembly in 2015.

Under the law's Articles 45 and 62, a municipality or a city can be established upon the approval of the government following a request made by provincial authorities after they are given the green light by their local assembly or parliament.

Six criteria have been outlined for a district or municipality to meet in order to be upgraded to a city. A district must have a population of at least 60,000 people and a density of at least 900 people per square kilometre in urban areas, with proper public facilities.

The number of people living in urban areas working as farmers must not exceed 25 percent of all urban residents, according to the law.

Five criteria are set for a district to be upgraded to a municipality. A district must have a population of at least 40,000 people and a density of 450 people per square kilometer in urban areas, with certain public facilities. The number of people living in urban areas and working as farmers must not exceed 30 percent of the total urban population.