Political stability in Laos holds the key to economic prosperity

LAOS has conducted an election to its national assembly amid media criticism labelling it a "non-event", neither free nor fair, but ignoring the country's need for political stability in its ambitious drive for economic prosperity.

The nationwide election, held every five years, went smoothly in February this year in which some 4.28 million Laotian people voted to elect 164 national assembly members out of 224 candidates who were in the running from 18 constituencies, and also to elect Provincial People's Councils which are the provincial parliaments. The winners in the national assembly included 158 candidates belonging to the ruling Lao People's Revolutionary Party (LPRP) and six Independents.

The independents, however, were cautiously vetted and approved prior to the election by the Laos Front for National Development, a government-affiliated political organisation.

Thongloun Sisoulith, a 75-year-old veteran who had served as the prime minister since 2016, was elected as the new head of the state, replacing Bounnhang Vorachith. Mr Thongloun said he would create favourable conditions for stability, economic growth and poverty reduction.

Commentators point out that elections in Laos do not meet the standards of fairness and freeness as it is a one-party state under the LPRP which dominates political and social life. For the LPRP, however, politics is about stability and keeping a tight lid on the sources of upheaval.

Yet, a US Department of State report states that "there is minimal risk from civil unrest in Vientiane", explaining that the political situation is relatively stable. It said that although several small bombings had occurred in Vientiane in past years, they did not target foreigners because their perpetrators were a mix of local and expatriate Laotians who were dissatisfied with the government.

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The US report did not clarify the real nature of the threat of continuing anti-government violence since the year 2000 when the country faced sustained periodic shootings and bomb attacks on transportation hubs and border checkpoints by suspected insurgents

In most cases, the government of Laos does not identify individuals or groups who carry out the attacks. The government has long been worried about opposition from the country's Hmong ethnic minority, many of whom claim that they face persecution from the government because of their clandestine links with the United States during the Vietnam War, when thousands of Hmong fought under the command of "advisers" from the Central Intelligence Agency during the so-called "secret war" against communists in Laos.

For these reasons, the LPRP maintains a tight control on the political process because it worries about such threats to stability, which is preserved by a Laotian law banning peaceful assembly, and prohibiting participation in demonstrations, protest marches, or other acts that "cause turmoil or social instability" without government permission.

Those who participate in protests or other public events may face five years' imprisonment, although the authorities do not usually enforce this provision. In October 2018, police in Savannakhet province shut down a public concert at which performers and the audience wore T-shirts with the slogan "No bribes for jobs", referring to alleged corruption in the hiring process.

The fact that very little seems to happen in Laos should make it a sanctuary for trade and investments. Its economic growth story started when it ended its isolation and opened its borders to foreign trade and investment in the early 1990s. The country's "2030 vision" aims to quadruple per capita gross domestic product (GDP) between 2016 and 2030, which calls for annual investments of around 30 per cent of GDP.

As the pandemic took a firm grip, the country has revised downward its annual economic growth target from around 8 per cent to 4 per cent, in its next five-year plan (2021-2025), emphasising "sustainable, balanced and quality", after taking into account concerns over heavy reliance on resource-based economic development such as its large hydro-electric projects.

Worries are surfacing over the huge debt burden of the projects that China is conducting in the country, some so massive in scale that they have exerted unbearable pressure on the Laotian economy. The country had entered into partnership with China fully aware of the risks of indebtedness in order to achieve its growth target.

With a slew of investment opportunities, many investors from Asean, the US and Japan are exploring the agricultural sector - both production and exports - by raising livestock, building dairies, and investing in agribusiness using modernised harvesting, planting and processing.

The development of special economic zones has attracted major international companies in projects in Vientiane, Savannakhet, and Champasak provinces as they offer incentives and tax holidays, an abundance of inexpensive electricity, and low labour costs. Moreover, the country's central location in the Mekong region makes it a good candidate for investments in tourism. The minerals and mining sector, particularly copper and gold, has also proven effective as a driver of economic growth in the country.

In an important move, the Lao government completely liberalised its retail sector in 2015, allowing the entry of foreign retail establishments, and is now witnessing some US franchises performing well in the local market. Currently, foreigners may invest in any sector except those the government considers sensitive to national security, health or national traditions, or those that may harm the environment.

Laos' allure as an investment destination is improving with large-scale development of its infrastructure through the China-Laos Railway, which is expected to open this year, connecting Vientiane with Yunnan Province via high-speed rail, and also connecting the northern Lao cities of Boten, Vang Vieng, and Luang Prabang with Vientiane. Laotian highways linking Laos' major cities with neighbouring countries are also being improved.

A visitor to the Laotian capital of Vientiane will find it a picture of peace with a generous sprinkling of Buddhist pagodas, its citizens dining on local delicacies at street cafes that fit a novelist's description of a city coming out of a long slumber.

The English novelist Somerset Maugham had seen signs of sleep everywhere in the 1920s, noting that even "the coconut trees with their dishevelled heads were like old men suddenly risen from sleep".

After having missed the industrial revolution, Indochina had to confront technology in its most brutal form in the Vietnam War. One of the most heavily bombed countries in history, Laos entered a period of self-imposed isolation from the non-socialist world and joined the regional community of nations in the 1990s.

Its image as a country where life seemingly proceeds at a leisurely pace fails to give the true impression of a nation that has the gumption to see through ambitious economic projects.

• The writer is the editor-in-chief of the Rising Asia Journal.