Lao People's Democratic Republic

While the Emerging Asian region has positioned itself well to weather short-term economic volatility, it is imperative to ensure that the new growth and development strategies of countries in the region do lead to sustainable growth over the longer term. To this end, there must be structural policy reforms to ensure sustained and robust productivity growth, the cornerstone of every nation’s economic growth and competitiveness. The reforms should also target upgrading of economic activities to ensure that the region’s economies can remain competitive participants in global value chains in the face of changing domestic and external conditions.

This chapter considers how and if economic reform in Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) has reduced poverty and income inequality. It opens with a brief introductory section that puts CLMV in a regional context and outlines the themes the chapter addresses. The section on the CLMV experience of poverty and inequality – country by country – examines each country in turn, sketching its history from independence, its experience of war, and its transition from a centrally planned people’s democracy to a market economy in the 1980s and 1990s. In this respect, Myanmar is an exception as it is only now ushering in its first tentative reforms. Cambodia, Lao PDR and Viet Nam, however, have effectively rebuilt and reaped the benefits. Their export-driven economic growth has been strong. Cambodia and Viet Nam have diversified their economies away from agriculture and both are currently fostering eco-tourism and new green industries. All three have reduced poverty – Viet Nam by half. Income disparities, however, persist between men and women, urban areas and rural regions, and ethnic groups. Inequality has actually widened in Lao PDR. CLMV have much to do to ensure development is inclusive and sustainable: further build infrastructure and institutional capacity, widen equitable access to education and employment, make the business environment investor-friendly, invest in human capital, nurture small and medium-sized enterprises, weed out corruption. The section on CLMV countries briefly compares the four countries and their performance in reducing poverty and inequality. Myanmar is a constant exception, principally because so little data are available. However, the final section “Conclusion”, also applies to Myanmar: economic growth does not of itself deliver equally shared benefits for all.

The 1991 Constitution of the Lao People’s Democratic Republic (Lao PDR, commonly known as Laos) guarantees the principle of gender equality. Although equality is promoted further in a number of specific laws, legal awareness remains low, partly because more women than men are illiterate.