Laos Economy and Politics

By | June 6, 2022

According to Homosociety, the economic characteristics of the Law in the last fifteen years have been directly determined by political events, assuming very different connotations in the two opposing areas of the country: the area controlled by the Patriotic Front which, initially limited to the northern provinces, has progressively extended following the advance of the front of the partisan struggle in the countryside, and the “government” area, which included all the cities and the most fertile lands along the Mekong (see below, S toria).

Around 1960 the whole Laos was a very backward agricultural country (average annual income percapita about 60 dollars), with large areas characterized by a subsistence economy (nine tenths of the peasants). A census had never been held there; in the cities – of which only one conspicuous, Vientiane, with about 80,000 residents – 5% of the country’s population lived. Over 90% of the active population was employed in the primary sector, in which farms of 1.5-2 ha of the lowest technical level predominated (yields equal to 20% of the most advanced rice-growing countries). Rice, the main crop (almost 98% of arable land) and staple food of the country, was not sufficient for its needs. In the insignificant secondary sector, handicraft production predominated, not infrequently still carried out together with agriculture. The industrial plants were reduced to a few hydroelectric plants, small rice mills and sawmills. The only mining activity – in a single mine – was that of tin (only about 400 tons per year of tin concentrate), by a joint Franco-Laotian company. Absent the railways; the roads that could be traveled throughout the year had a length of just over 1000 km, in a country as large as two thirds of Italy. In foreign trade, imports (destined for urban dwellers: industrial consumer products, especially cars; foodstuffs; petroleum products) exceeded exports by almost ten times (tin concentrates; forest products; cotton; coffee for two thirds).

In the areas controlled by the Patriotic Front – and primarily in the two northern regions, mostly mountainous – starting from 1964, the population was practically forced to move and live in caves (of the 8000 existing villages, as many as 7000 were destroyed) ; but at the same time it has carried out a tenacious work of improvement of the economic and social activity (introduction of elementary cooperative forms, enlargement and technical improvement of rice cultivation, improvement of handicraft activities, creation of some light industry plants, expansion or creation commercial network, fight against illiteracy, improvement of medical services). Despite a large rate of population growth (about 2, 5% per annum in the 1960s for the whole country) the leaders of the Patriotic Front claimed to have achieved food self-sufficiency. Do not forget what was probably the most important increase in communication routes in the country (even if their consistency and shapes are unknown): the creation of the tracks of the so-called “Ho Chi Minh trail” – supply line for South Vietnamese partisans – along the eastern border of Laos.

In the “government” sector of the country ‘s “help” especially the US (the highest percapita of the world: 140 dollars per year on average) has resulted – apart from military supplies – in a flow of consumer products that have ended up compromising the local handicraft activity. In the secondary sector – 2% of the active population, 3% of the national income – the only new activities were the construction of some hydroelectric plants, which moreover serve for the daily life of the main urban centers; the creation, mainly in Vientiane, of a few plants (two cement factories, a cotton fabric factory, some food products plants: sugar, non-alcoholic beverages, beer, canned meat) and the technical renovation of the tin mine, which tripled production. With the exception of a small increase in irrigated areas (today equal to little more than i% of arable land), no progress has been made in agriculture, of which 85% of the active population continued to live practically in self-subsistence and which gave 75% of the national income, at the beginning of the seventies. On the contrary, as a consequence of the war activities, it has seen a conspicuous decrease in the areas worked and in the quantities produced, in the first place of rice (almost one third), the import of which has thus increased. The only novelty is the increase in small areas of tobacco, coffee, cotton and, above all, corn (the latter determined by a certain commercial development of livestock, called upon to satisfy the meat needs of the cities). The cities have in fact swelled (Vientiane has doubled the population), with a rate of more than double the general increase of the country’s population. But it was an urbanization induced by bureaucratic activities (public administration, police, armed forces of just under 100,000 men for a country of 3 million residents). The tertiary sector is thus significantly increased, but with poor economic results. In the field of transport, there was mainly a proliferation of military airfields and a doubling of the number of cars, which remained concentrated in the cities at the service of the bureaucratic layers. Three-quarters of imports have steadily entered the country via the Bangkok-Vientiane road. The trade balance deficit, always conspicuous, was filled by “aid” foreigner of several developed capitalist countries (in the first place – 75% – the USA). Note the increase in rice imports.

After the assumption of power by the patriotic forces, the urgency, as well as a rapid improvement in the agricultural situation, of the geological exploration of most of the country (so far never carried out) to ascertain the consistency and the cheapness of the mineral deposits which, it is claimed, should be numerous and conspicuous.

Laos Demography