Laos' battle with poverty

The average income is less than $1 a day

By Simon Ingram in Vientiane

It is not often that communist-ruled Laos finds itself in the international spotlight.

The recent meeting of European and South East Asia foreign ministers held in the capital, Vientiane, was just such an occasion, and the communist authorities made the most of it.

The roads were freshly resurfaced and flags fluttered from every lamp post to mark the biggest event of its kind to be held in the country.

The ministers were treated to lavish banquets and spectacular pageants - hospitality meant to deflect attention from security concerns prompted by a series of unexplained bomb attacks in the city, and from suggestions that this landlocked and impoverished nation is on the verge of major political and economic troubles.

Simple subsitence

A quarter of a century after independence, Laos remains one of the poorest nations on Earth.

In markets in the capital, peasant women wait beside piles of vegetables and other meagre produce.

For most of the five million population, simple subsistence is the norm. The average income is less than $1 a day.

The situation was worsened by the recent Asian financial crisis, which decimated the national currency, the Kip, by some 90% and which fuelled runaway inflation that at one point hit 170% annually.

Since then, a measure of economic stability has been restored.

But Kari Nordheim-Larsen of the UN Development Programme says the government is still worryingly reliant on overseas donors to fund its spending programmes.

"I don't think either the [foreign] partners who want to help Laos overcome poverty, nor the Lao Government itself is happy with this situation," she said.

"There has to be more real economic growth in Laos, and not only in the agriculture but in other sectors as well, so that it can replace this very high level of assistance."

If the country's communist leaders cannot offer prosperity, people like 16-year-old Noi know better than to complain.

"We want our country to develop like Thailand and our other neighbours," he says, adding: "Hopefully that'll happen soon."

Open expression of dissent is very rare here, and is swiftly crushed.

Younger generations are taught to praise their country's long and painful struggles against former enemies like the United States.

Personality cult

Observers say that in order to bolster the legitimacy of their rule, the country's ageing leaders are feeding a personality cult around the late president, Kaysone Phomivane.

A new museum commemorating his achievements was opened in Vientiane on 13 December - the anniversary of Kaysone's 80th birthday.

Public comment on a string of mysterious bomb attacks in recent months is firmly discouraged.

A tourist restaurant, buses and Vientiane airport were among the targets of the blasts, which have left one person dead and several dozen others injured.

The state-controlled media echoes the official line blaming anti-government groups based abroad for attempting to stir up trouble.

"They want to show that there is no security in Laos," said Somsanouk Mixay of the Vientiane Times newspaper.

"But as you can see during this Asean-EU meeting, there is security, there is peace in Laos.

"The only results of those blasts is to anger the people."

Change society

On the streets of what remains one of Asia's sleepiest capitals, it's hard to detect immediate pressure for change.

But long-time Laos observers like Russian journalist Yevgeny Belenky say the authorities are beginning to respond to calls from international donors to open up the political system and to put an end to rampant corruption.

"These people want to change society but step by step," he says.

"They know they cannot live in the same political system indefinitely when all the countries around them are living by a different political system.

"But when there will be any changes in Laos, these changes will have to come slowly."

So far, and in spite of the bombs and the recent defection of a senior government minister, there is little hard evidence that Laos is threatened by serious instability.

But recent events have introduced a new sense of unpredictability here, and few can say with confidence where that might lead.