The image most of us of a certain age are likely to have of Laos is a wildeyed, barefoot young Pathet Lao fighter scowling at the camera, dripping in an assortment of Soviet weaponry.
Or if there is one statistic they might know, it is that Laos is the most bombed country on Earth, a plane-load of ordnance being dropped every eight minutes by 1973 as the United States prosecuted a clandestine war against the Pathet Lao (literally Land of the Lao) and its North Vietnamese ally.
More recently, it may be an image of the Lao People’s Democratic Republic, a one-party communist state, better known for its domestic purges, failed attempts at social engineering, bitter and largely forgotten war against the ethnic Hmong and North Korean styleeconomic policies.
Yet this landlocked country of seven million people and more than 130 ethnic groups, overlaid with strong French colonial influences, is now one of the hottest travel destinations in southeast Asia, an easy and staggeringly cheap option, especially for backpackers.
Tourists number 1.6-million annually, bringing in about half the country’s revenue. The rest is from mining (notably copper and gold), sales of hydropower, a small garment sector and
agriculture.
The economy has grown at about 8% a year during the 2000s, necessary for the country to realise its goal of escaping its status as one of the poorest 20 nations worldwide by 2020.
This has also partly been on the back of increases in labour productivity, up by nearly 20% in the past decade, resulting in an annual growth in agriculture output touching 5% over this period.
As a result, rural poverty has fallen from more than 50% to less than 40%, admittedly still a very high figure, and national poverty has been halved to less than 25%.
But, despite more than $400-million in annual aid flows, in the words of one specialist, “like in many countries, donors can always find a good project, but this often just embeds the status quo”.
The recent inflow of Chinese “aid” -- in reality, the linking of services (including the building of roads and a new national stadium to future contracts and mining and business rights -- has served to worsen this effect.
China’s pattern of “aid” should be all too familiar to African countries -- and just as there are concerns in Laos about mortgaging the country’s future wealth to short-term gains from China, Africa faces a similar conundrum.
No wonder then the promises of $10-billion in Chinese soft loans made at the November China-Africa summit in Cairo.
This year the Obama administration declared that Laos had “ceased to be a Marxist-Leninist country” -- this, in terms of the US memo, a “centrally planned economy based on the principles of Marxism-Leninism”.
This move lifted a ban on Lao companies from getting financing from the US Export-Import Bank. But Laos is a land of contradictions.
Even though the hammer and sickle still flies alongside the Laos national flag on most buildings and although officially a one-party state -- only members of the Communist Lao People’s Revolutionary Party are allowed to contest elections -- with a politburo where the writings of Marx and Lenin still sell well and Soviet style posters exhorting the people to great things are a common sight, the country plans to open its first stock exchange in 2010.
Although the captions in the National Museum berate the “imperialist” US and its “puppets” at every turn, today US visitors and firms are warmly welcomed.
President Barack Obama’s decision was clearly prompted by the way the economy, not the politics, are being run. New thinking -- jintanaakaanmai -- on the economy has been encouraged by reforms in neighbouring Vietnam, Laos’s big brother.
Like Vietnam and Cambodia, Laos faces a difficult challenge in this process: dealing with rising inequality, especially between the capital of Vientiane and a handful of other towns and the poverty of the countryside, between the obvious consumption of the politically connected and the barefoot poverty of the rest. This points to the biggest challenge of all.
Unlike Vietnam and China where liberalisation followed investment in the health and education of their citizens, thus ensuring they possessed the means to make full use of the fresh opportunities globalisation offered, in Laos and Cambodia this has not been the case.
In both the benefits are mostly accruing to a tiny elite and to foreigners.
Whereas in Cambodia the process has been driven by a predatory regime, there is greater naivety in Laos, where, as one donor argues, “people are being left increasingly behind in a liberalisation process before they have the means to capitalise on the opportunities and get a slice of the pie”.
A lack of transparency doesn’t help. Despite recent improvements in the ease of doing business, on the Index of Economic Freedom, Laos ranks well down in 137th (of 157) place.
Transparency International rates it at 151/180 on its corruption perceptions list, and it comes in at 163/174 on press freedom rankings. Put simply, Laos cannot be considered to be open and it’s unfree.
There are other parallels with many African countries -- a heavy dependence on agriculture and the challenge of moving from subsistence to commercial agriculture, a growing divide between rural and urban areas and, most notably, a very low capacity to implement programmes.
The absence of capacity also plays out in poor qualitative and quantitative data and, thus, weak planning. But there is no gainsaying the benefit of 8% average annual growth.
The impact is visible in the number of cars in Vientiane, the spread of cellphones and even the number of ATMs -- from just four three years ago to 144 today.
This will bring other issues: traffic, pollution, a still widening urban-rural bias, which will need to be managed, though these are problems you do not have without development.
Lao live for the moment, less reliant on Marx and Lenin than the teachings of Siddhartha in their Buddhist wats. Most of the country studiously knocks off between noon and 2pm each day, their feet to be found poking out horizontally from under their tuk-tuk canopies.
More importantly, this karma enables them -- like the rest of the region, so blighted by war and violence -- to look forward, not backwards, to making a plan and generally getting on with things. That, too, is a lesson for Africa.
Source:mg.co.za
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