Governance, Barriers, and the
Socioeconomic Prospect in Laos
Mana K. Southichack, Ph.D.
Development and Agricultural Economist
Interim Executive Director
LaoEcon Organization
USA
Abstract:
Government can either serve as a barrier or facilitator for socioeconomic
progress. While some socioeconomic progress has been made since the 1990s, due
largely to foreign aid, the existing governance emphasizing societal control
does not only restrain economic growth, it exacerbates income inequality at the
expense of the poor and disadvantaged. As an example, government suppression of
the free flow of information and the private sector’s participation in the
publication and media businesses does not only depress employment and
professional development in the industry, the development of national
intellectual capital stock and the market at large, it discriminates against the
poor and disadvantaged. The existing judicial system, which is un-immune from
the interference of high-ranking individual party members and government
officials, can neither guarantee a level playing field to investors nor justice
to the average citizen, an advantage for the rich and/or politically
well-connected. Barriers to socioeconomic progress that exist in Laos are
numerous. Certain barriers are purely natural phenomena while others are manmade
and event-driven. Lowering these barriers would stimulate economic growth and
social changes, but to whose advantage, the elites or the mass, it depends on
how broadly and far reaching these barriers can be lowered. However, thus far,
the efforts to reduce economic barriers by the Lao government have focused on
natural variables while evidences indicate that governance is the main
impediment to economic and social progress. The absence of fundamental reforms
in governance has caused the fruit of foreign aid and economic growth to be
skewed towards the few urban elites at the expense of the poor. To move towards
sustainability and broad-based economic growth with social advancement necessary
for poverty eradication and beyond, broad-based fundamental changes are
necessary. In this light, this paper examines how and in what key areas has
governance obstructed and promoted socioeconomic progress in Laos.