The suffiency message is spreading. Here is a report from the Vientiane Times (27 Jan 2009).
The agriculture-based, self-sufficient nature of the country’s economy will protect Laos from any major fallout from the global financial crisis, according to a senior economics lecturer at the National University of Laos. Vice Dean of the university’s Economics and Business Management Faculty, Mr Somchit Souksavanh, said on Friday Lao people would not suffer any negative impacts from the crisis on the same scale as millions of others around the world.
“People all around the world are worried about the crisis but Lao people haven’t experienced any changes to their standard of living,” he told Vientiane Times. “There are no reports of people being unable to earn a living.”
He explained Laos was at an advantage because more than 70 percent of its population live off the land and are self-sufficient. Most farmers grow vegetables and raise poultry and animals for their own consumption and were not worried about the declining demand for agricultural products in the global market.
Mr Somchit said forests were a source of food for many local communities and if Lao people could survive this way of life they would have no problems during the crisis. He said some employees would suffer but they would not be as disadvantaged as people in other countries. If Lao people lose their jobs, he said, they can simply go back to work on their farms.
Mr Somchit said the financial crisis would have a strong negative impact on people who relied on both industrial production and consumer demand. “If the demand for industrially produced goods falls, fewer goods will be produced, resulting in lower profits, which may mean mass lay-offs among the labour force,” he said.
“People who live in industrialised countries live in fear of losing their jobs because they can’t grow vegetables and raise animals as people can in Laos .”
Mr Somchit said although the country’s self-sufficiency would enable people to weather the crisis, it would hinder economic development. He said one of the major problems with an agriculture-based society was the supply of agricultural products as raw materials to factories. “When people grow vegetables only for their own consumption, investors don’t feel confident about investing in factories to process agricultural goods,” he said, adding that the government wanted to expand industrialisation.
He said farmers must be trained to diversify and grow different types of crops to ensure the supply of sufficient agricultural products to processing factories. He also said if the price of one crop fell, farmers could rely on other crops as a source of income.
9 responses so far ↓
1 Roland // Jan 28, 2009 at 5:10 pm
Well, let’s see. The subsistence agricultural economy is better for the people because they aren’t affected by events in the rest of the world, so it’s a good thing the country isn’t developed, but the government thinks development would be good for the people and so wants to promote industrialization.
Sounds about right for a Communist country.
2 antipadshist // Jan 28, 2009 at 7:26 pm
I wonder what is the level of income of Mr Somchit comparing to the average of folks he talks about ?
also of all those who are leaders or officials there (government, army, police etc.)
do they also ahdere to “sufficiency” principle ?
does Mr Somchit grow his own vegetables ?
3 Seng // Jan 30, 2009 at 10:38 am
Laos do feel the recessions. Your statements above may be too optimistic with more personal assumption than the actual life here. Here are some examples:
Lao Kips become stronger (11,000 kips per one US$ in 2007 to 8,400 kips per on US$ now). Looks promising Kips, but already giving troubles to some import export companies in keeping their contract commitments to the farmers, no longer afford to pay the farmers the promising prices for their crops especially for corns. Hundred thousands of corn grains stranded in the mountains of Laos just waiting to be destroyed by molds and storage pests. Good prices of corn in 2007 lured many farmers to grow corns in 2008 instead of traditional upland rice. The farmers are now facing tough challenge to cope with their need of rice.
Money economy is every where in this country. Rely on nature and forest products has become the story of the past as all have been exploited by the greedy Chinese and Vietnamese in the past decades.
The recessions direct hit the gold and copper mines mainly run by the Australians which caused resting thousands of the local staff and labors and canceling the contracts of the local suppliers to the mines. Garment factories pay is extremely low, 14 working hours a day can help less than US$ 100 a month to the factory worker.
Youths from the remote villages, all gone to the cities and to Thailand, leaving the villages with the elders and children and leave the paddy lands unploughed.
The cities in Laos are fulled with the internal migrants of youths, prostitution is booming, social instability need fast aids.
4 Kambung // Jan 30, 2009 at 8:13 pm
Self-sufficiency is not an original ‘Thai message’. It was the bedrock of Lao state attempts to weather the demize of Communism by encouraging every official and his family to open a small shopfront selling candies, a vegetable patch and a chicken coupe. But it was never self-sufficiency that got Lao people through hard times – it was being a member of a large family network for support, being a client of a powerful patron, diversifying trade and income sources, having a relative in the public service – it was ‘reliance on others’.
I wonder if there is (or ever was) a single example of a community that is ’subistent’ in the purest sense – that it is ’self-sufficient’ and does not have trade, barter or alternative economic (marriage, relatives, patrons) links to other communities? Seng’s examples are good evidence against the assumption that Laos is somehow ‘outside’ the global economy. Instead, Laos seems to be left out of global ‘recognition’. That is, recognition that its people are eager participants in world affairs. Lao labour (in the hundreds of thousands) is bound up in regional economic and trade networks (mainly in Thailand). Lao elites are shaped by regional and global educational opportunities (in dozens of countries). Remote rural Lao communities are impacted by resource development projects, even if they do not grow cash crops. Lao are affected by regional disasters such as the Asian Tsunami, in which dozens (possibly hundreds) of Lao working in southern Thailand were killed.
Whichever way you look at it, ’self-sufficiency’ is a message pushed by elites who are in no way interested in being self-sufficient themselves. And it is being pushed on impoverished communities who seem very interested in finding any way they can to participate in the global economy.
5 richard jackson // Feb 2, 2009 at 6:50 pm
One of your contributors states that the Australian mining companies in Laos are laying off thousands of workers and cutting back contracts. While there has been one local press report (Vientiane Times) stating that 3000 people were being laid off by the biggest mine (LXML’s Sepon mine for which I work), this report was completely inaccurate. It is true that exploration cutbacks and the onset of the dry season meant that the equivalent of three hundred casual jobs involving clearing ground for UXO removal were temporarily not required. This is a seasonal phenomenon and not uncommon. However, even here instead of laying off workers directly the remaining UXO and general clearance work was, in co-ordination with local authorities and villagers, redistributed so that all previous employees in this area had part-time work. Otherwise in the last two months or so fewer than five Lao staff have been made redundant and around a dozen expatriates.
Despite this amendment to the statements of your previous correspondent, it is difficult to disagree with the core of his argument; Laos is unlikely (to say the least) to avoid being quite sharply impacted by world economic events. LXML contributed $US 140 million to the Lao exchequer in 2007-2008 and close to half the value of the country’s exports. Since copper prices have fallen by two-thirds since mid-2008 there is certain to be a major reduction in both government revenue and exports from this source in 2008-2009.
6 richard jackson // Feb 3, 2009 at 9:33 pm
Update on yesterday’s email which only considered redundancies at Sepon to early January: as of end of January a total of 25 Lao workers (out of 5,000 plus) had been laid off. In addition 288 ItalThai construction workers have finished their work and returned home. Sorry not to have been as up to date as I should have been.
7 Darma // Feb 6, 2009 at 6:16 am
It would be more accurate for Mr. Somchit to state that, relative to its neighbors, Laos would suffer less in terms of its economic downturns. Let’s be honest, Laos does trade with its neighbors and FDI is becoming an ever more important source of revenue. If the Thai economy were to shrink at a rate forecast by its ministry of finance, then this may impact the level of FDI received in Laos from its neighbor. The cross-border trade between the two country cannot be underestimated either. Hence, while Laos’ GDP may not be affected to the same degree as Thailand’s or other nations in SE Asia, Laotian authorities should not downplay the growing integration of Laotian economy in the regional realm.
8 xyooj // Mar 15, 2009 at 9:57 am
Somchit is down-playing the potential impact on Laos. It’s short-sighted to see that Laos is on another planet that is not going to be affect with those on the planet Earth…doesn’t it makes you wonder why a person of his position could make such a statement.
It may not have significant affects to the people who are in remote areas that do not rely on industrially produced goods (i.e. electricity)….but obviously it will affec those who now needed those industrialized goods to survive.
hmmm…..why is the current government of Laos letting other nations depleting its natural resources (i.e. gold, copper, etc…)???
9 Frank G Anderson // Jun 5, 2009 at 9:55 am
On the Thai-Lao sociopolitical front, I have been reading some interesting and yet shocking historical records, accounts often by foreigners, but also some from original Thai, relating to the Anuwongse affair and invasion of Thailand by the Lao back in 1825-28. The more I read the ill I become at the ferocity and intentional merciless shown to the Lao king and his race overall by the Thai.
The issue of forced tattooing of all males, including those in the Isan region, to given them a Mark of Cain Siamese style, seems in some sense to be a forerunner of another kind of tattooing we are witnessing today – forced fealty to the monarchy and forced loyalty to it. Unless you are ‘wearing’ that ‘tattoo,’ you are not really Thai and don’t love your country, nation or king…
A sad continuance of oppression.
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