Laos Sheds Its Isolationist Cocoon

Here on the banks of the Mekong, Southeast Asia’s economic boom simply passed Laos by. It is as though Laos fell off the world map and Vientiane--small, dusty, sleepy--was time-trapped in the pages of a Graham Greene novel.

While canyons of glass-fronted high-rises tower over other Asian capitals, Vientiane remains a collection of rutted streets and two-story shops, the capital of a country where only one-tenth of the villages are anywhere near a road and only one-quarter of the population has access to safe drinking water.

“Quiet? Yes, it’s that,” said writer James Michener, a six-year Vientiane resident and nephew of the late author with the same name. “But if you’ve got your computer, your books, it’s a great place: charming, relaxed, like the unspoiled Asia of old.”

For a good many years, Laos’ aging Communist leaders--the Pathet Lao guerrillas who came out of mountain caves in 1975 to mismanage the country into bankruptcy--were content to keep the nation exactly that. They devised policies to ensure the country’s isolation behind the Bamboo Curtain and shunned paths toward prosperity that Singapore, Malaysia and others had followed.

But the temptation eventually proved too great, and today big changes are in the wind. As U.S. Ambassador Wendy Chamberlin, who speaks Lao and taught here from 1971 to 1973 for International Volunteer Service, put it: “They took a look around the neighborhood and saw that foreign investment--export-led growth--created the economic boom, and they want to be part of it.”

The Communists have set a modest goal: to escape from the ranks of the world’s 25 poorest countries by 2020. Under the “new economic mechanism” reforms, first toyed with in 1986, they have lifted trade barriers, instituted free-market prices, given farmers the right to own land, liberalized the investment code. Vientiane, if not exactly abuzz, has reacted with a flourish of activity: new shops, more motor scooters, a new airport terminal under construction.

“We are a poor country trying very hard to be rich in the years ahead,” said Linthong Phetsavan, acting general director of the Foreign Ministry’s press department. The road, he admitted, will be a long one.

Three-quarters of Laos’ public-expenditure budget comes from foreign aid. Its resources--oil, gold, precious metals--are in only the early stages of exploitation. Its plan to build dams and power plants to export hydropower to Thailand has been set back by a Thai economic crisis. Its land remains cluttered with unexploded U.S. ordnance from the Vietnam War that makes development dangerous, expensive and sometimes untenable. And much of its middle class has never returned home after fleeing the Pathet Lao’s harsh rule in the mid-1970s.

“While the rest of Asia was developing, Laos was left standing around, wondering what time of the day it was,” said one Western businessman. “Can they ever catch up? I’m not sure. Unlike the Vietnamese, the Laotians are a pretty laid-back people--polite, friendly but not terribly industrious.

“What Laos has going for it is that it’s in vogue with donor nations. The remoteness, the mystique of Southeast Asia, the embrace of a free-market economy--they all give Laos a certain appeal. You’ve got donors falling all over each other to fund the same project,” he said.

To be sure, fate dealt Laos a tough hand to begin with. A landlocked nation battered by war, it had been colonized, occupied and manipulated by foreign powers since the 19th century. Today, as poor as Bangladesh in per capita income, it is a country the rest of Southeast Asia continues to dismiss as a backwater stepchild.

Writing in Bangkok’s English-language Nation newspaper, a Thai columnist recently told how people were fleeing his country’s economic downturn. “One friend wants to go to New York,” he wrote. “Someone has already gone to London, another to Hong Kong. I even know someone who has moved to Laos. He was that desperate.”

Whereas Laos once eschewed anything tainted by the West, the country’s real seat of power--the Communist Politburo, six of whose nine members are military men--now eagerly seeks close political and economic relations with those nations. Laos is the only Indochinese country that did not experience a break in diplomatic relations with Washington in the aftermath of the Vietnam War.

U.S. diplomats term relations with Vientiane “good and improving.” They say the government has been cooperative in assisting in the search for the remains of U.S. airmen shot down over Laos and in seeking crop substitutions that will wean farmers off the opium they grow. Laos is the world’s third-largest opium producer.

Over many generations, Laotians became used to being kicked around. The Thais invaded Vientiane in the 1820s and left only a temple standing. France colonized the country in the 1890s; Japan controlled it in World War II; CIA agents, operating under cover of the U.S. Agency for International Development, manipulated it in the 1960s. All the while, a bewildering array of Laotian factions--neutralists, royalists, Communists--fought one another for power. And for good measure, the Vietnamese came up with a grand scheme: They would put the Ho Chi Minh Trail not in their own country, but in Laos.

The Pathet Lao came to power promising retention of the monarchy, guarantees of individual freedom, a neutral foreign policy and a role for the private economic sector. Every promise was broken within months, and in a purge of the past, upward of 40,000 Laotians were sent off to re-education camps.

Today the hammer and sickle and the Communist jargon are gone along with the Bamboo Curtain.

A two-lane bridge, built by Australia, spans the Mekong near Vientiane and provides the first river-spanning link to Thailand. And Laos took an important further step to end its isolation earlier this year by joining the Assn. of Southeast Asian Nations.

As a reminder of how much times have changed, the huge Russian Embassy, completed just before the 1991 breakup of the Soviet Union, stands nearly empty behind a 10-foot-high stone wall on the outskirts of Vientiane. Designed for a staff of several hundred, it houses only about 20 diplomats and staff. Moscow is reportedly looking for a tenant for the top floors.