ASEAN Beat | Politics | Southeast Asia

In Laos, Reform Hopes Peter Out Into Business as Usual

The Lao communist party’s newly selected General Secretary Thongloun Sisoulith once promised change. Now he sits atop a closed and sclerotic system.

David Hutt
In Laos, Reform Hopes Peter Out Into Business as Usual

A monument to the Lao communist revolution outside a museum in Vientiane.

Credit: Sebastian Strangio

In early 2016, a crevice of hope was opened following the news that the newly-appointed prime minister of Laos might be ready to embark on the course of change. Thongloun Sisoulith made a lot of noise about tackling endemic corruption. In his first year in office, he ordered cost-cutting measures within the ruling Lao People’s Revolutionary Party (LPRP), including bans of conscious extravagance, forcing some party members to sell their cars and property at auction. The party went after well-connected drug kingpins. Thongloun banned the export of timber, spoke publicly about ending mining operations, and ordered Chinese-owned agricultural plantations to stop using pesticides that damaged the health of fields and workers. Indeed, he spoke often about protecting the environment, even as the party was accused of conspiring with (mostly) Chinese developers to steal and spoil the land and construct a string of hydro-dams along the country’s rivers.

In a rather free-flowing interview with a Thai journalist in 2017, Thongloun appeared to walk back his country’s fixation with energy exports. “If Laos is to be the battery of Asia,” he said, “this might be overly ambitious.” Laos might become a battery but only a “small battery,” he seemingly joked. In a lengthy article for the Diplomat in early 2017 on whether Thongloun was a “reformer,” I suggested that his time spent in the Ministry of Foreign Affairs has maybe had made him more open to new ideas and, importantly, removed him for several years from the claustrophobic world of Vientiane politics. He was different to his colleagues, it appeared.

This week, at the LPRP’s National Congress, an event held every five years, Thongloun was elected the party’s new General Secretary. For sure, it’s a considerable bump for Thongloun. He now holds the most powerful position in the country and should also get the post of State President, the head of state, when that decision is formally announced next month.

But Thongloun isn’t a reformer, as his government’s policies since 2017 have made clear. By the close of 2020, Laos was more dependent on China than ever before, including on Chinese debt, which at some point in 2020 raised the real possibility of the country defaulting on its loans. Most likely as a way of alleviating its debt burden, last September it effectively signed away control of its electricity grid when the state-run Electricite du Laos entered a partnership with China Southern Power Grid, in which the Chinese firm holds the majority stake and, therefore, de-facto control.

Meanwhile, corruption continues apace. Party apparatchiks haven’t become more in keeping with the common man. Mining has restarted, including the extraction of gold from the sprawling Sepon mine in 2020, after a six-year hiatus. Human rights have deteriorated, with the authorities “disappearing” even greater numbers of activists. And the environmental degradation caused by the damming of the Mekong has become considerably worse, so much so that Vientiane now risks a major spat with Hanoi and Bangkok over how its decisions affect their parts of the river.

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Laos saw its first major disaster in this field in early 2018 when a saddle dam collapsed in southern Laos, killing at least 40 people and displacing thousands. The exact numbers may never be known, but are likely much higher than the government lets on. As soon as the news broke, Thongloun’s government showed itself not only entirely uncaring and incompetent, but also unyielding. If there was one event at which he could have massively altered the country’s policy, forcing a rethink to what he had only the previous year described as an “overly ambitious” plan to become an energy-exporting giant, it was this. Instead, the government lied about the numbers, failed to properly help its affected citizens, and quickly rushed to approve even more dams, even those accused of being badly planned and at risk of similar collapses.

Reading out the party’s new five-year National Socio-Economic Development Plan (2021-2025) on Thursday, it was all too clear how non-reformist Thongloun has become. The essence of the plan is that nothing will really change. It plans for the service sector to become more important than industry by 2025, but that was a change naturally taking place, and is in part the result of the government’s lack of foresight into how to actually improve Laos’ industrial sector.

For the most part, the new five-year plan was the same as the old one. The main takeaway is that the country will remain dependent on loans, mainly from China. It wants to cut the state deficit, decrease national debt and increase foreign currency reserves – all sensible ideas – but which the government hasn’t been able to achieve over the past five years, and probably won’t by 2025. Gone are the days of a “dictatorship of the proletariat.” Now it’s a “dictatorship for the bourgeoisie”: trickle-down economics padded by Marxist-Leninist nouns and adjectives.

A few minor changes were made to the communist party’s rule book at last week’s congress, but they were hardly inspiring. Two-term limits on senior political offices became codified, but that has been an accepted and followed tradition for decades. Joining the party will become harder.

All in all, it was a pretty monotonous congress. Maybe that was because party members were so distracted by the COVID-19 pandemic that they had little time for imaginative thought. Or that the party reckons it’s on the right path. Or, most likely, because it thinks it has no other options.

Conventional wisdom holds that Laos is confined and claustrophobic, almost straitjacketed by its geography, being pinched between far larger and more powerful states. Having no connection to the sea compounds the sense of insularity. “Land-locked” is the accepted adjective even if Beijing now promises its investment in expressways and railways in Laos will make it “land-linked” – an optimistic assessment. Meanwhile, because it hasn’t opened up to the world, unlike its communist-cousin Vietnam (Laos’ trade with the West is marginal), it is confined to dealing with only its three neighbors: Thailand, Vietnam, and China – and increasingly just China.

But compounding all of this is a political system that tightens further the country’s straitjacket. Put another way, Laos does actually have possibilities for change and renewal, for new options to be taken and paths to be followed, but none are possible whilst the country remains controlled by its hermetic communist party. Thongloun, who appeared to be a reformer when he became prime minister, now sits atop that sealed system.