Laos: Development against all the odds

A New Internationalist special correspondent sends this rare report from Laos - a country that owes many of its problems to America’s past involvement in South-East Asia but that is now finding its own unique solutions.

The Vietnam war took its toll of several countries in Indo-China. The continuing prominence of news about Vietnam and Kampuchea (formerly Cambodia) has deflected attention from perhaps the least known state in the area, Laos. As one Indo-China expert has put it, if you want to find a country which has all the problems of the Third World in one place - then Laos is that country.

It is a small, landlocked territory, stretching for 700 miles along the left bank of the Mekong River. However, this great natural waterway does not give Laos direct access to the South China Sea - the double waterfalls at Khone near the Kampuchea border are impassable. Much of the land area of Laos is moist forest or deciduous woodland, except for the Mekong river plain, which is cultivated. The northern part of the country (which borders Burma and China) is mountainous, as is the large eastern border with Vietnam. To the west much of the border with Thailand is the river Mekong.

Most of the main towns lie along the river, though some other areas are (or were) fairly densely populated - for example the plateau area known as the Plain of Jars for the celebrated and mysterious stone jars which litter the area.

At $90 p.a. per capita income, this is one of the world’s poorest 15 countries and the poorest in Asia except Bhutan. It has inherited from its history as a French colony almost none of the basic infrastructure for development, outside Vientiane, the capital. Since the Pathet Lao took over the government after the collapse of previous coalitions, however, the country has now a genuinely nationalist government committed to the development of Laos for Laotians and by Laotians. To some observers the presence of Vietnamese troops and advisers in considerable numbers suggests that Laos has merely exchanged one domination for another but, whatever the final assessment, for the first time a serious programme of development is being implemented. The country is starting again, from scratch.

*Colossal problems to overcome*

But what exactly is the starting point? As a result of the Vietnam war, or rather the clandestine war which was fought on the fringes of Vietnam, the Pathet Lao regime has inherited problems which would daunt administrators in many richer, more prosperous countries.

It is now generally accepted that in total the Americans dropped more bombs on Laos than were used in the whole of the Second World War. Several eastern provinces were almost completely desolated so that no normal life was possible - whole towns destroyed, areas of cultivation turned into moonscapes, forests flattened. As a result only the Pathet Lao guerrillas stayed behind in caves; the rest of the people of those areas fled - about 750,000 out of a total population of only 3.3 million are officially termed ‘displaced persons’.

Many crossed into Thailand where they still wait today in refugee camps, but most remained inside Laos. Some still cross the Mekong into Thailand even today but others are starting to cross back. I met one woman who had braved the propaganda barrier and returned. ‘At least my children get free schooling in Laos,’ she said. ‘We couldn’t afford the bribe to get them into school in Thailand.’ Today in Vientiane perhaps five out of ten people are ‘displaced’.

While the physical damage inflicted on Laos by the United States was immense, the human cost was higher. Vientiane and its people were corrupted in every possible way - the drugs were freer, the brothels more plentiful, the graft more conspicuous, and the alienation more complete even than in Saigon. Though the pace was slower, the atmosphere was decadent, not frenetic. ‘Laos doesn’t have an economy; it has an aid programme,’ a US Congressman commented when visiting Vientiane during the war.

Boosting rice production is the first development priority in Laos today, as even this postcard shows. Last year 12,000 tons of rice had to be bought on the open market.

Illustration: Hand-painted in Laos

In order to understand the Pathet Lao government, its policies and its development strategy today, it is essential to take into account this recent history, the rage felt by Lao nationalists at the physical and human desolation they observed being inflicted by foreigners and the disgust they felt especially for the Americans and their local allies. On the other hand the only help and support they had received was from the Vietnamese, whom they see as their comrades in arms through the most terrible years in their country’s history.

*Development priorities*

At present Laos is unable to feed itself - before the fighting it was a small exporter of rice. Commentators have noted the two consecutive bad harvests and the disastrous floods of 1978 but a major contributory factor must also be the loss of subsistence crops from the very large numbers of "displaced persons’ - mostly subsistence rice farmers and their families.

Rice production is perhaps the first development priority in Laos; last year the Government had to make up a short­fall of 120,000 tons, much of it bought on the open market with precious foreign currency. Irrigation schemes large and small therefore are being promoted vigorously. They are basically of two types. First, short-term projects using pumps to irrigate relatively small areas of the Vientiane plain so that a second rice crop can be produced. Secondly, larger scale, long-term projects involving the construction of dams and water channels for flood control and water regulation during the normal growing Seasons with second-crop irrigation as a bonus. A series of small dams are being built, while much of the canal construction is being implemented through labour-intensive self-help schemes- ‘ok-heng-nga’ (‘collective work’). This takes place on Saturdays when large numbers of government employees, students, school children and (very occasionally) staff of international agencies are free to help. Recently there was strong criticism by staff of some Western Embassies in Vientiane when a number of UN officials took part in a day’s ‘ok-heng-nga’. It was commented that UN officials were ‘helping to build socialism’. To Western diplomats this is an adverse comment, to the Laos a gesture of support.

At present less than three per cent of the rice cultivation area has two harvests a year so the potential for increased production as a result of irrigation is considerable. To this end the Government has a programme that requires farmers to join together in formal co-operatives. This has been portrayed as an entirely coercive policy, but in many places it amounts to formalising an existing arrangement whereby farmers and their families help each other at peak activity periods in the farming year. At any rate, it is hoped that the establishment of co-operatives will result in increased productivity. Loans for fertiliser, machinery and pest-control facilities will be promoted through the farmers co­operatives, which will also be the units through which literacy and post-literacy educational programmes are channelled. Considerable emphasis is being put on the eradication of illiteracy, which has always been a Pathet Lao priority. Surprisingly during the Vietnam war the levels of literacy attained in the areas under continuous bombing were higher than in Vientiane where there was no fighting. The classrooms were caves and dugouts in the limestone hills; lights were candles or simple oil lamps.

*Social development and education in Laos*

A major aspect of the Laotian development strategy is the rapid and widespread Laoisation of both education and administration - the Lao language is now the means of virtually all official communication. To this end there is a major operation under way to translate and publish Lao-language school textbooks and to distribute these textbooks throughout the country. Universal primary schooling and a major expansion of secondary schooling are regarded as essential precursors to real progress.

But the Lao government is trying to pursue a balanced development and education is not reserved for children of school-age alone. There is an ambitious policy to expand pre-school education for which a new section of the old Secondary Teacher Training College at Dong Doc has been created. Girl students selected from all provinces are being trained so as to develop nursery education throughout Laos. As one official explained, ‘this is not just for the benefit of pre-school children, but so that more women may be released for productive work’. I saw this policy in operation at the nationalised Lao Handicrafts Production Centre in Vientiane where a creche had been set up, releasing a number of young women to work at the looms while the children were properly cared for by trained personnel.

The rehabilitation of the devastated eastern provinces is a major problem for the Pathet Lao Government. But with poor and inadequate roads to the area - impassable in the wet season and only suitable for light traffic for the rest of the year - the logistics are daunting. Xieng Khouan, the principal city on the Plain of Jars, (which might now be renamed the Plain of Craters) was totally destroyed. A new town is being constructed a little distance from the old site and the people are slowly being resettled in their devastated land. With UN assistance, a secondary school is being built.

Progress at reconstructing the rich agricultural patchwork of the Plain is painfully slow - there are not enough people nor is there enough equipment. And the scale of the task is immense. Swedish aid is contributing to the road­building programme but there is little other outside help even from those countries which were responsible for the damage. One international agency official in Vientiane commented: ‘I’m afraid the American people arent ready for that yet.’

A ‘most sinister aspect of land-rehabilitation work is the constant danger posed by unexploded ordnance. As part of what the US Army called a ‘territory denial’ policy, anti-personnel ‘mother’ bombs were dropped which spewed thousands of bomblets on impact. Millions of these bomblets remain, still active, on or just below the surface of the soil over large areas in Eastern Laos. Casualty figures are difficult to come by and as most of the danger areas are known and marked, accidents are kept to a minimum. But vast areas of land which ought to be cultivable are, for the present, totally unusable. A refinement of these ‘pineapple’ and ‘guava’ bombs was where the jagged nails and metal darts were replaced by similarly shaped plastic fragments. Plastic does not show up on X-rays. An official US army source during the war gave the reason why the plastic was preferred: ‘We know they have few doctors - this will keep them longer on each casualty.’ The only way the plastic needles could be found was by probing.

The one American group which maintained any sort of relationship and trust on both sides during the war was the Quakers, the American Friends Service. They set up a hospital for the disabled in South Vietnam in the 1960’s which was available to the wounded of both sides. They are still active today in both Vietnam and Laos. In Laos their operation is tiny, a small-scale emergency rice irrigation project. But as this sort of aid is now trickling into Laos from a number of sources, the American Friends hope to contribute to other vital work, and clearance of unexploded bombs could become a high priority. With the present food-grain shortfall in the country, any help towards the rehabilitation of cultivable land in the eastern provinces would also be a major contribution to development.

For further information contact: Roger Rump or Jacqi Chagnan at: American Friends Service Committee, BP 1118, Vientiane, Laos.

Some basic facts on Laos:
Area 91,000 sq. miles (UK is 90,000) of which 60% is forest.

Population 3.6m (1978) of which 1.9m are ethnic minorities: Mon-Khmer, Thai & Meo. Birthrate at 44.611,000 is one of the highest in Asia, but infant mortality at 175 per 1,000 is also high.

Annual population growth is 2.4%: the population will double by about the year 2000. Half of the population is under 17. Life expectancy is 39 (males) and 42 (females). Doctors per 100,000: 5 (Japan 117).

Religions: Laos & Thais: Buddhist.

Hill tribes (Mons & Meos): Animists and ancestor cults.

$90 per capita GNP: this is the lowest in Asia (except Bhutan) and well below Bangladesh. Laos is a net importer of food: its total trade is the lowest in Asia.

Economic resources: Almost totally undeveloped (except rice production), but the country is rich in timber (especially teak) and unexploited mineral resources; tin (some mined already), coal, iron ore. Hydroelectric potential enormous: (Nam Ngum dam already produces over 110 MW, much of which is sold to Thailand). The projected Pa Mong dam on the Mekong just above Vientiane could provide 4,800 MW.

Basic infrastructure such as transport is very much undeveloped and a major handicap to rapid development. Total of only 510 miles of asphalt roads in 1970 and today’s total not much higher. Other trunk roads are quite in­adequate, many having at least some bridges missing and only able to bear weight of small trucks. No railways.

History.

Originally unified by Fa Ngum as a Kingdom in 1353. When it became a French colony in the 1890’s it had already lost territory to Thais and Vietnamese. Became independent in 1953, but civil war followed: fighting between Royal Lao Government and procommunist Lao forces soon broke out. Eventually a cease fire was signed February 1973, and a third coalition government established 1974, but with Vietnam War and corruption among Royalists the Pathet Lao gradually assumed majority control of the Government. In 1975 People’s Democratic Republic was declared headed by Prince Souphanouvong (President) and Kaysone Phomvihane (Prime Minister).

Some Development Projects. Rice Production:

Aid from various sources, including the World Bank’s soft-loan affiliate the International Development Association ($11.9m scheme), are helping to raise production in Vientiane plain by increasing irrigation for dry season cultivation, improving water control, and upgrading crop-husbandry.

Roads:

Chinese were building a network of good all­weather roads in the northern border area until recently. With the help of Swedish aid a trunk road to link Vientiane with Hanoi is in the early stages of construction.

Hydroelectric power: =paragraph Numerous small-scale dams associated with new irrigation projects are being constructed. Forestry: =paragraph Swedish aid and Asian Development Bank loans are making a start at development of forest resources, mostly adjacent to Vientiane - transport difficulties preclude development in other areas except for local consumption.

Cuba: Dancing in the streets; working in the fields

Latin America Newsletter staff writer RONALD BUCHANAN on Cuba’s approach to development and its special contribution to the Third World.

A casual visitor strolling through central Havana might be forgiven for wondering what economic success could possibly mean in the Cuban context. Cuba’s greatest city has none of the bustle of Brazil’s Sao Paulo or South Korea’s Seoul; private cars are few in number; commercial activity appears to be negligible; the atmosphere is tranquil rather than tense.

Success has brought no boom to Havana, for booms are not what Cuba’s revolution is about. Although, when they first took power, revolutionary leaders such as Fidel Castro and Che Guevara made it clear they hoped for rapid industrial development (a Cuban miracle) they always gave overriding priority to the development of a socio-economic infrastructure.

As a result, Havana today exhibits none of the ills of other major Third World cities. No crippled beggars stretch hands out to passers-by; no ‘good-time girls’ linger in the shadows or gather in the bars; almost every dwelling, however humble, enjoys plumbing and electric light.

Neither do Havana’s citizens mourn the lack of ‘colour’. In the absence of violence and economic pressure, social relationships are easier to establish - and are on a sounder basis. At the workplace and in the neighbourhood a wide range of social, recreational and educational activities is available to every citizen.

A revolution with dancing in the streets Commercialised ‘fun’ may be hard to come by but few cities in the developed world can offer the film buff a greater variety every week - from Jaws to the latest Fellini. Every night in Havana you can hear music of all types: pop, symphonic and traditional Cuban to experimental Afro-jazz. At night everyone walks unafraid so parties abound and often they spill out of the houses. This is revolution with dancing in the streets.

Such ease and spontaneity, though, did not come about without a lot of hard work and planning, even though some of the revolutionary government’s measures were born of necessity rather than design.

After years of experimenting with a variety of planning systems and with what Cuban officials admit was at times ,no system at all’, a New System of Economic Management and Planning is being introduced gradually. In principle every enterprise in the country is to be using this system by next year though it is likely that teething troubles will delay implementation.

Under the New System every enterprise will have to account for its economic dealings just as it might under capitalism. Indeed, the official daily newspaper, Granma, has given warning that ‘normally every enterprise should make a trading profit; no longer will lame ducks be bailed out’.

Such criteria will apply to industrial, agricultural and commercial enterprises. For activities having a social purpose inconsistent with ‘profit-making’, such as education and health, the aim will be to secure the best use of resources.

The introduction of the New System is the culmination of a process which began in the wake of the near-disastrous failure to harvest 10 million tonnes of sugar in 1970. Then every available human and material resource was drafted into the harvesting, with extremely destructive effects on the rest of the economy.

*A long hard slog*

The 10 million tonne target (in fact only some 8.3 million tonnes were harvested) was set in an effort to make a ‘great leap forward’ in the economy. The reappraisal which followed its failure led to the adoption of a ‘long march’ strategy in which the Soviet Union and its allies have played an increasingly important role.

Cuba joined the Soviet bloc’s economic community, COMECON, in 1972. And the New System owes much to Eastern Europe, though Cubans point out that their country is much more centralised than than of Hungary, for example, where enterprises decide their own investment policy.

Besides the establishment of closer links with the Soviet camp, the ‘long march’ strategy meant abandoning the attempt to achieve industrialisation in a hurry. Harmony of development is now the keynote and the emphasis has been firmly placed on the countryside - yet another reason for the tranquility of Havana.

In the Caribbean, where massive bills for food imports make balance-of­payments crises endemic, Cuba stands out as an example of the region’s agricultural potential. Alone of the Antilles it has a big and growing dairy industry and nearly all the nation’s basic food­stuffs are home-grown. A deep-sea fishing fleet earns more than $100 million a year from export earnings, as well as helping the national diet. The citrus plantations provide a similar return. Fertiliser and cement plants to service the needs of agriculture have been built in the new ‘poles of development’ away from Havana, such as Mariel and in the nickel-mining area in the east. The achievements of the agricultural sector, though, dwarf those of industry. The production of steel is still on a modest scale, but buses are now being assembled on the island.

*How links with the Eastern bloc developed*

Given the importance of the Soviet Union and COMECON in assisting these developments, it is worth studying how the links arose.

Cuba, as its leaders never fail to remind the people, lies in the ‘frontline’ against ‘imperialism’; only the 100 miles of the Florida Straits separates it from the United States. The hostility which the USA showed to Castro and his rebel army after they had seized power led inevitably to closer links with the Soviet Union; it was the only way for the revolutionary government to survive.

The success of the Cuban revolutionaries was a direct challenge to the United States’ claim to reign supreme over a massive sphere of influence in the Western Hemisphere. Washington’s wrath took the form not only of military attacks both covert and open, but also of an economic boycott - a boycott incidentally, which the majority of the Hemisphere’s nations were forced to adhere to.

The egalitarian measures which the revolutionary government took in those early years assured it of popular support, but even the revolution’s leaders admit that only Soviet aid prevented the collapse of the economy.

Whatever the reasons, though, the Soviets bailed out the Cuban government time after time. Arguably they bailed it out too many times; stronger Soviet insistence might have forced the Cubans to put their economic house in order much earlier than they did.

No-one knows the real level of Soviet aid to Cuba. Much of it takes the form of barter agreements, such as the oil-for-sugar deal which Cuban officials say gives them the equivalent of 40 cents a pound for their sugar - some five times the world market price. Some observers have estimated, though, that the effective level of Soviet subsidies to Cuba is about $2 millions a day, including military assistance.

Such a figure has to be put in perspective, however. Neighbouring Puerto Rico (with about one-third the population) receives more than $8 millions a day in US Federal funds.

*Merging back into the Latin American economy with Soviet help*

Cuba has always made it clear that it would welcome working within the regional economy of Latin America and the Caribbean. There are signs too that the Soviet Union is keen to rid itself of the burden of shipping oil halfway across the world in large quantities, particularly when oil prices are soaring in the world market. These appear to have been the motives behind Cuba’s decision to invest in nuclear energy - with Soviet assistance.

In the last resort, the Soviet Union has staked as much on Cuba’s success as Cuba has on the Soviet Union’s help. Moreover Cuba’s most outstanding examples to the rest of the Third World are Cuban creations alone.

The health and education systems for example, have allowed the government to export thousands of teachers and doctors to other countries, particularly to Africa. Agriculturalists and construction specialists also form part of this remarkable Cuban crusade for world development.

Cuba is also importing thousands of young Africans (mainly from Angola, Mozambique, Namibia and Ethiopia) to study in its unique ‘schools in the countryside’. In accordance with the general Cuban educational principle that work and study should be combined, the students at these boarding schools work in neighbouring fields for about three hours a day. The labour that they do helps to meet the cost of their education and the results achieved in such schools have proved to be much better than in schools of the traditional type.

Cuban leaders hope that a contribution to victory in the battle for African development will be made in the fields and classrooms of Cuban schools.

Taiwan: growing, growing, gone

Financial Times Far East Correspondent RICHARD HANSON looks at the ingredients of Taiwan’s phenomenal economic growth, and foresees an eventual reconcilition with the mainland - but ‘only after China becomes more like Taiwan’.

Taiwan has a population of over 17 million squeezed into 36,000 square kilometers of land, making it one of the most densely populated countries in the world. The land itself is about 75 per cent mountainous, with some of the tallest peaks in the region. The only significant natural resources the island has are some deposits of coal, natural gas and water power, good weather and fertile soil.

In 1949 Taiwan became a refuge for the defeated Nationalist Government of Chiang Kai-Shek who arrived with millions of Chinese from the mainland. At the time, before United States support for Chiang firmed with the outbreak of war on the Korean penninsula, it was thought Taiwan would soon be taken over by the new Communist government in Peking.

From this rather bleak position, however, has emerged one of the strongest of the newly-industrialised countries of Asia, with per capita income lagging only behind powerful Japan and Singapore. Since the early 1950s Taiwan has maintained a real economic growth rate of over eight per cent per annum, one of the highest in the world.

In 1978, Taiwan became the twentieth largest trading country in the world, with imports and exports combined gaining a strong 33 per cent to $23.7 billion. In exports alone the island ranks 17th, rivaling its closest competitor, South Korea, which has twice the population base.

The strength of Taiwan’s export-oriented economy has meant that annual per capita income has risen from just $132 in 1952 to $1,455 last year and is expected to top $2,000 by 1981. By contrast, income per person in China is estimated at $405 a year.

Even more significantly, the benefits of economic growth appear to have been spread evenly throughout Taiwanese society. Government figures indicate that the gap in income between the richest 20 per cent of the population and the poorest 20 per cent is only about four to one now, compared with 15 to one in the early 1950s.

Without a strong economy, Taiwan could not support the large military establishment which discourages any serious takeover attempts by the mainland.

The success of Taiwan, despite its state of now complete official diplomatic limbo since the US withdrew formal recognition in January 1979, also allows the Nationalists to claim legitimacy as the government of the native Taiwanese. Taiwan, they contend, is just the model for what they could accomplish upon return to power on the mainland.

The question remains as to how Taiwan achieved its economic miracle against initially desperate odds. The answer is twofold. First, it had the support after the Korean War broke out of the USA, which felt panicked into shoring up any anticommunist support it could in Asia when the thought of a joint Soviet-Chinese threat loomed large in American perceptions.

In the 1950s and through the mid­1960s, the USA poured economic aid averaging $100 million a year into building up the country. The US Seventh Fleet patrolled the waters between China and Taiwan to ward off any possible invasion attempts, and a powerful ‘Free China’ lobby looked after the interests of Taiwan in Washington. Even now, after the US recognition of the government in Peking, a firm commitment by the US Congress offers the Taiwanese a large measure of security, even though the American troops left this Spring and the defence treaty expires at the end of the year. American business and the big US banks have continued to support Taiwan strongly. The loan commitments by those banks in the first four months after President Carter made a surprise announcement of the end to formal Taiwanese links were greater than for the whole of last year.

Second, Taiwan itself was ready for development. The Nationalists,, immediately after World War Two, regained control over Taiwan from Japan which had held it as a colony from 1895. The efficient (and oppressive) Japanese bureaucrats had established an extensive communications system, reorganised agriculture so as to make it the most important export industry and left the foundations of many modern industries (designed originally to support Imperial Japan’s war effort).

On this base the exiled Nationalist government in 1949 began a series of reforms starting with sweeping redistribution of land which diffused the influence of landlords and gave tenants a new start. The reforms proved to be as revolutionary, perhaps, as anything taking place in China, and certainly were effective in stabilising Nationalist control.

After land reform and a revitalisation of agriculture, the government launched a series of plans which aimed first at reducing dependence on imports. In the 1960s Taiwan worked to expand export industries such as textiles and light electronics. By the early 1970s a modest plan for establishing heavy industries (steel, shipbuilding and petrochemicals) was transforming the country beyond recognition.

Besides broad controls over money supply and capital designed to ward off inflationary pressures when needed, and the grand outlines for development, another factor in the island’s economic success is that the government has interfered little with private enterprise. The economy has an underpinning of small to medium size businesses, thoroughly capitalist. There are more than 10,000 trading companies on the island. This diverse foundation has given the economy as a whole a flexible buffer, on which more sophisticated industries can be formed.

The governments of both Taipei and Peking hold firmly to the gospel that there is only one China and that Taiwan is a part of it. Slowly trade contacts (though officially disallowed) are growing and, inevitably, there will be some sort of accommodation between the two. Because of Taiwan’s well-established success and the pressing need in China (for the moment at least) to industrialise it appears that that accommodation will most likely occur only after China becomes more like Taiwan.