Communism and Capitalism Are Mixing in Laos

VIENTIANE, Laos — Hammer-and-sickle flags flutter above government offices in downtown Vientiane, and the entrance to the national museum is decorated with massive sculptures glorifying the workers’ revolutionary struggle.

Officially, this sparsely populated country is still communist — and has been since 1975. But these days, that really depends on whom you ask.

Three months ago the Obama administration declared that Laos, the country the United States tried so hard to prevent from toppling toward communism during the Vietnam War, had “ceased to be a Marxist-Leninist country.”

Following similar announcements in past decades for China and Vietnam, the White House made the declaration without fanfare in a June 12 memorandum that lifts a ban on Laotian companies from getting financing from the U.S. Export-Import Bank.

But in Vientiane, the capital, news of the U.S. policy change was perplexing for Klongmanee Boonliang, an amiable saleswoman in a government-run bookshop. Karl Marx and Vladimir Lenin are still best sellers, she said.

Every month, schools and offices buy 400 to 500 poster-size portraits of the two men and hang them in prominent places. “The Smile of Lenin,” one of several booklets praising Lenin on the shelves, also sells well.

“He was a brave and smart person,” she said, offering an impromptu homily to the founder of Soviet communism. “Everyone wants to get lessons from him. It’s still important.”

What to make of Laos, the former French colony that became a focal point of great powers during the Vietnam War, only to slide back into obscurity once the Cold War ended?

Landlocked and mountainous, Laos has long had a reputation as more somnolent than its hard-charging neighbors. Today, however, Vientiane’s streets are filled with the hallmarks of conspicuous consumption — Hummers, Mercedes and other fancy cars. Purse snatchings are on the rise, a sign perhaps that people have more to steal. In a center-city gym, a group of high school girls spend their evenings practicing dance moves that might make teenagers in Los Angeles blush, let alone the ashen-faced members of the Lao Politburo.

Capitalism is making inroads in Laos, but mastering the ideology might require some re-education. The country is scheduled to open its first stock exchange next year, a plan that prompted a local newspaper to run a series of articles offering a glossary of capitalist terms (“A stock market itself is like any other market,” said a recent explanatory article. “Everything has a price.”)

The official line from the government is that Laos is a one-party democracy — only members of the Communist Lao People’s Revolutionary Party are allowed to contest elections.

“Marxist-Leninist theory is practical and is suitable for the current situation in Laos,” President Choummaly Sayasone said in a speech to military veterans earlier this year that was reported in the English-language Vientiane Times.

Yet even some government offices are enthusiastically entrepreneurial. Provincial authorities have encouraged the construction of lucrative casinos that cater to Chinese and Thai gamblers (Lao citizens are not allowed). And in Vientiane, the Foreign Ministry charges 1 million kip, about $120, as a “registration fee” for visiting journalists and $24 for every day in the country — princely sums for this impoverished country.

Laos is, above all, divided between the rising incomes of Vientiane and a handful of other towns and the poverty of the countryside, where most of the country’s seven million people live — and where ideology of any stripe can seem irrelevant.

In a village about 15 miles outside Vientiane, Thai Lee, a rice farmer, said he had never heard of Marx.

Lenin? He guessed he might be a famous Vietnamese leader.

“If I had studied more, I might know more about it,” Mr. Lee said.

Even during the Cold War, Laos was never a communist country in the style of the more industrialized and developed Soviet satellites in Europe.

Efforts to establish farming communes in the early 1980s were so unpopular that they were abandoned within a few years. And children in Laos are often educated in Buddhist schools, where Marx and Lenin take a back seat to Siddhartha.

Although the cities show signs of newfound wealth, Laos is also too poor overall to be a textbook communist government capable of providing for all of its people. The government is so skeletal that public spending makes up only 11 percent of the country’s economy, according to World Bank numbers, compared with more than double that level in the world’s capitalist headquarters, the United States.

Politically, Laos remains authoritarian, and dissent from the party line is banned. But there have been signs of glasnost, the openness that Mikhail Gorbachev described in the dying days of the Soviet Union.

The National Assembly, the country’s Parliament, inaugurated a hot line two years ago, encouraging citizens to call in with complaints, which were researched and in some cases aired publicly. Earlier this year, the government passed a law allowing citizens to form nonprofit organizations, a move that chips away at the Communist Party’s monopoly on political life.

“Civil society in Laos is still very immature at the moment, but it’s growing,” said Viengsamay Srithirath, a communications officer at the World Bank office in Vientiane. “You see a number of grass-roots organizations coming up.”

For the United States, the decision to change Laos’s Marxist-Leninist status might be seen as a belated coda to the Secret War, the effort by the U.S. government four decades ago to keep Laos from becoming communist and to interdict Vietnamese supply lines through the Ho Chi Minh trail, much of which ran through Laos.

The war, conducted by the Central Intelligence Agency and kept secret because it violated Laos’s neutrality, featured tens of thousands of hill tribe mercenaries on the U.S. payroll and a devastating bombing campaign.

The bombings ultimately failed to shut down the Ho Chi Minh trail, and Lao communist forces, backed by Vietnam and China, were victorious in 1975.

Ravic Huso, the current U.S. ambassador to Laos, says the decision to change Laos’s Marxist-Leninist status was not a comment on the country’s political system.

“Are they still a one-party state? Yes,” Mr. Huso said during an interview in his office. “The legislation was not intended to apply to that. It was intended to apply to the way the economy was run.”

In the June memorandum, President Barack Obama said, “I hereby determine that The Lao People’s Democratic Republic has ceased to be a Marxist-Leninist country.” The memo includes a reference to the U.S. Export-Import Bank’s definition of Marxist economies.

The definition reads: “‘Marxist-Leninist country’ means any country that maintains a centrally planned economy based on the principles of Marxism-Leninism, or is economically and militarily dependent on any other such country.”

The change in U.S. policy was years in the making, Mr. Huso said. Cambodia was removed from the list at the same time. Only North Korea and Cuba remain, he said.

So, is Laos communist?

Southanom Inthavong, the head of the country’s Olympic Committee who has graduate degrees from universities in Moscow and Minnesota, answers the question with a question.

“What is China today?”