Communist Regime in Laos Experiments With Own Style of Perestroika

The Communist leaders of remote Laos are loosening their grip on the country in a local version of the Kremlin’s sweeping reforms.

Under the banner of the New Economic Mechanism, ownership and inheritance of private property have been newly sanctioned, a code encouraging investment from the capitalist world has been passed, and plans are under way to cut by a third the bureaucracy that controlled the lives of Laos’ 3.9 million citizens.

Although still a one-party state wary of political dissidents and run by some of the world’s most durable revolutionaries, Laos may go farther in liberalizing its economy than neighboring Vietnam and a number of other Communist countries, according to Western diplomats stationed here.

“People are beginning to smile again,” said one European who has known the country for decades.

Bonuses and Incentives

While state co-ops do exist, bonuses and other incentives have been introduced. Several supposedly socialist enterprises visited recently appeared to have the loosest kind of structure.

“Go see what we have in the co-operative store, then come back and buy from me,” said a friendly old woman trying to sell hand-woven cloth to visiting Western journalists.

Although still quiet and slow-paced by most standards, striking changes are apparent in Vientiane, the capital city of 250,000.

The tailors and jewelers along Samsenthai, the city’s main commercial street, are back in business, as are the dance halls, where women in sarongs and their partners alternate between traditional ramwong music and rock.

Western Fashions

Unthinkable a few years ago, Laotian women now dance with foreigners at some clubs. Teen-agers wear longish hair and Western fashions, which in the early days of Communist rule was enough to have them branded as “decadent hippies” and sent off to re-education camps.

At the city’s sprawling central market, U.S. dollars, Thai baht and the local kip currency are all legally used to buy Japanese television sets, Thai clothes, European liquor and a wide variety of local farm produce. The newly remodeled market is on lease for 10 years to Thai businessmen who share profits with the government.

Economically booming Thailand next door is the source of most consumer goods, which are traded or smuggled across the Mekong River frontier. Local purchasing power is fueled by some $3 million to $5 million yearly sent home to relatives by refugees in the United States, France and elsewhere.

“Business is getting better every day,” said Virachit Philaphandeth, one of a growing number of entrepreneurs whose monthly 300,000 kip ($850) in net profit is about 50 times the wage of a middle-ranked government official.

Growing Confidence

Virachit, whose ventures include a lumber mill, said that growing confidence in the New Economic Mechanism is leading to more domestic investment and a small boom in private-home building, which is evident in Vientiane and other areas of Laos.

The new policies, the diplomats agree, have been influenced by General Secretary Mikhail S. Gorbachev’s reforms in the Soviet Union, as well as by reforms in neighboring China and Vietnam. Another influence is television, avidly watched here, from robustly capitalist, pro-Western Thailand.

The reforms are also apparent reactions to the period between the Communist victory in 1975 and about 1980, when the regime attempted to collectivize peasants, flirted with inappropriate industrial projects and attempted life style changes antithetical to the basic Laotian character and traditions.

The economy stagnated. An estimated 350,000 people, including a bulk of Vientiane’s skilled middle class, fled the country while adherents of the toppled, U.S.-backed government were sent to harsh re-education camps. An insurgency flickered.

No ‘Song and Dance’

Although Laos did not suffer the postwar traumas of its Indochinese neighbors Cambodia and Vietnam, neither was the transition a Song and Dance Revolution, as some observers claimed.

“There is no philosophy which must be followed from here to eternity,” a key economic planner, Somphavanh Inthavong, said. He explained that slowly evolving reforms were formally approved at the Communist Party’s Fourth Congress in December, 1986, and have gained steady momentum over the last year.

Whatever changes the economic loosening may bring to the political arena, the Lao People’s Revolutionary Party, as the Communist Party is called, currently shows few signs of relaxing its grip on power or dismantling a watchdog apparatus that penetrates to the grass roots.

The country’s first national elections since 1975 are scheduled for November, following balloting at district levels. Officials say there will be more candidates than the 79 seats in the Supreme People’s Assembly but all will be screened before being allowed to run.

Draft Constitution

The major tasks of this and next year will be to finish the draft of a constitution--the first under Comunist rule--and to substitute a legal system for the decrees under which the country has been run since the end of the Indochina war in 1975.

Widely seen as the architect of change is Kaysone Phomvihan, the 68-year-old leader who is one of the longest power-holders in the Communist world. He has headed the party since 1955.

Although long regarded as a conservative, Kaysone has sharply criticized the system’s shortcomings and opened some doors.

Western diplomats say the bulk of re-education camp inmates have been released. Laotians are being permitted to visit refugee relatives abroad, and Buddhism appears to be well tolerated. Although entry into Laos is still difficult, more Western journalists have been allowed to visit the country in recent months.

Non-Communist Aid

Laos is closely bound to Vietnam and the Soviet Union. But U.N. statistics show that unlike a few years ago, about 60% of the $100 million that Laos annually receives in economic aid is now coming from the non-Communist world, notably Japan, Sweden and Australia.

Somphavanh, the economic planner, said the main socioeconomic thrust will be to uplift the more than 3 million subsistance farmers, including large numbers of ethnic minorities, in the rugged countryside.

Few roads penetrate the provinces, where electricity is rare and diseases rampant. The infant mortality rate there is 120 to 130 per 1,000 births, among the highest in the world.

Officials indicate that a key measure of the new economic policy’s success will be its effectiveness in spreading the relative prosperity now being enjoyed in Vientiane and the lowlands bordering Thailand.