Laos: Barrow-Loads Of Banknotes

2002

Dr Nick Enfield

The Bank of the Lao PDR has just introduced two long-awaited new bank notes, at the values of 10,000 and 20,000 Kip. Some may have hoped this would alleviate the perennial inconvenience in Laos of having to carry around virtual bricks of cash – until now, the highest denomination of the Kip was worth less than half a dollar, making major purchases cumbersome if not requiring a sports bag. The new bank notes are only a minor improvement, however, with the highest denomination now worth just US$2.00. (And counterfeit notes have already been discovered!) Many locals avoid the problem by dealing in Thai baht and/or United States dollars, which have long been in free circulation in Laos.

The widespread presence of foreign currency is one factor behind the continuing growth of the Lao economy, most visible in urban areas. One source of overseas money is from Lao communities who fled the new regime in the 1970s and 80s, and who are now returning to invest and participate in local business activity. Another source of foreign currency, in much larger amounts, is in the form of development aid. Laos has seen massive input of international development aid over the last decade or so, but the distribution of that wealth is badly out of balance. It is now widely acknowledged by those involved with the development industry in Laos that embezzlement of project funds by corrupt officials is a serious problem, and yet little is being done about it.

One vibrant but not especially profitable area of export activity from Laos involves the (mostly illegal) export of labour to Thailand. Young Lao villagers are travelling to Thailand in ever-increasing numbers, in the hope of bringing savings back to their families. In many cases, the worker’s family is paid an advance sum, which the worker is then indebted to repay. This prompted the Lao newspapers to use the term ‘slave labour’ in reporting the recent return to Laos of 20 young Lao women (on 20 June 2002) who had been discovered working illegally in Thailand. This was the fifth group to be returned to Laos by the Thai labour ministry under a new United Nations project on Trafficking in Women and Children in the Mekong sub-region. Despite these repatriations, and official attempts to reduce the flow of illegal workers from Laos, there are estimated to be around 50,000 illegal Lao workers currently in Thailand, and young Lao people continue to cross the Mekong in search of paid work.

The newly introduced ‘Article 135’ stipulating the death penalty for those convicted of trafficking more than 500g of heroin has been invoked for the first time, with the sentencing to death of three Lao nationals. This has aroused some public fascination, with rumours (untrue) that the three were executed in public in a major Vientiane square. Drug abuse is held responsible for ever-increasing social problems across the nation.

WATCHPOINT: Extreme measures against drug trafficking will have little deterrent effect on Lao workers who seek to make a living, legal or illegal, wherever they can.

 

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