LANDLOCKED TO LANDLINKED: THE CASE OF ECONOMIC LIBERALISATION AND INTEGRATION OF LAOS

Abstract: The once landlocked position of Laos has developed into a strategic edge that it can leverage on for economic and social development, as it is situated right at the crossroads of the north-south and east-west economic corridors of the Greater Mekong Subregion (GMS). Due to global geopolitical developments, Laos began integration with the region and the world to support economic development through market reforms and economic liberalisation since the mid-1980s. The flagship GMS programme under the aegis of the Asian Development Bank is enhancing physical connectivity to accelerate economic integration and facilitate cross-border movement of people, goods and capital with a view to improving the competitiveness of the region. However, Laos remains under a one-party regime, and one of the poorest countries in Asia-Pacific, with its share of structural problems, poverty, subsistence agriculture, and increased dependence on external funding. Based on its unique factors, the degree to which the transitional economy has translated into political, social and economic upgrading is highly distinct in socialist Laos. This case study highlighted some of the socio-economic implications of liberalisation and integration and found that trade liberalisation has varied and unpredictable consequences to institutional structures, socio-economic changes, and overall development pattern in Laos.