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The dark horse wins 'Most Surprising Nation of Year'

The dark horse wins 'Most Surprising Nation of Year'

THEY might be called the good, the bad and the promising. They are the Southeast Asian nations that have most surprised us over the past year.

The good, the really stunningly good, has been Indonesia – with its stable, multiparty democracy and a vibrant economy recently upgraded by Moody’s, the global ratings agency.

The bad, the really shockingly awful, has been Vietnam, where Moody’s demoted its rating and warned of galloping inflation and a balance of payments crisis.

But let’s not dwell on Hanoi’s woes since we’ve reported that for some time. Instead, let us now praise a surprising dark horse: Laos.

Its promising economic progress has been largely unheralded, partly due to skewed media coverage, in turn partly due to logistics.

Roughly the size of the United Kingdom, but with only 5.6 million people, Laos has the lowest population density in the region and its rural infrastructure remains rudimentary.

Journalists rarely visit and there are no international news bureaux in its capital Vientiane, so that significant developments are often ignored or buried in the inside pages and then dropped the next day.

In fact, there have been major events over the past couple of months, the most startling being that on December 23, Prime Minister Bouasone Bouphavanh, 56, abruptly resigned.

He was replaced by Thongsing Thammavong, 66, the former National Assembly president and organisational head of the ruling Lao People’s Revolutionary Party, based at ‘Kilometre Six’ outside Vientiane.

After just four years in office, no one had foreseen Bouasone’s exit and no one could credibly explain it.

Some said it was because he allowed over-spending by the government (unlikely), or that he failed to aggressively fight corruption (very unlikely), or that he had weak party support and faced being dumped at the coming party congress in March (possibly).

Bouasone himself said it was due to “family reasons”, but the most significant thing was that it caused not a ripple of reaction among the Lao populace, nor did it affect the economy in any way.

Which brings us to another under-reported matter, the upwardly mobile Lao economy has been growing at 7.5 percent for the past decade, among the fastest and most consistent in the region.

Copper and gold mining, hydro-power and tourism are the major sources of revenue, as more and more people are weaned off subsistence farming.

Astonishingly, in a move that places Laos ahead of Cambodia and Myanmar, a stock market successfully opened two weeks ago.

A month before that, the giant 1,070-megawatt Nam Theun 2 hydro-electric plant became fully operational. It will bring Vientiane around US$2 billion over the next 25 years.

All this has been belatedly noticed by some canny outsiders like Mark Mobius, head of the Templeton Emerging Markets Group.

Earlier this month, he said that Laos has the potential to become one of the “compelling” frontier stock markets as demand for its hydro-power and mineral resources boosts growth.

Already Laos has 14 hydro plants with a total capacity of 2,540 megawatts and it plans to build another 20 over the next decade, turning the country into the “battery” of Southeast Asia.

On the mining front, companies like MMG and PanAustralian have invested in massive gold and copper mines at Xepon and Phu Kham, while the southern Boloven plateau has large bauxite deposits not yet exploited.

Other things have happened that you’re also likely in the dark about.

Last August, the United States marked 55 years of diplomatic ties with Laos and posted a military attaché there.

A spiffy new American embassy will open this year and USAID will come in shortly, hot on the heels of the Asia Foundation.

Oh, and the first general election in Laos for 35 years will occur on April 30, but you probably won’t hear much about that either – which will suit Laos just fine.

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