The challenges posed by globalization for economic liberalization in two Asian transitional countries: Laos and Vietnam

The challenges posed by globalization for economic liberalization in two Asian transitional countries: Laos and Vietnam

Can Laos and Vietnam maintain economic liberalisation in times of globalisation?

Paper examines the impact of globalisation on two transitional economies in Asia. Both countries have undergone a radical economic reform process over the past decade, assisted by increases in external trade flows, foreign investment activity, and external assistance. However, the pace of economic reform has decelerated since the perceived perils of globalisation-as evidenced by the Asian Crisis-have become more apparent to the leaderships of these two avowedly socialist states. Although neighbouring and fraternal countries, adopting broadly parallel economic liberalisation programmes, the forces of globalisation have manifested themselves in different ways in Laos and Vietnam. The paper discerns these differences, and assesses whether the two countries are likely to overcome the current hiatus in their economic reform programmes.

Conclusion: Laos and Vietnam enacted economic liberalisation measures in a bid to transform their economies into versions of the more vibrant economic models that surrounded them in Southeast Asia. Half way through doing so, Laos and Vietnam's leaders saw the Asian crisis partially discredit the economic models that they were seeking to emulate. And to make matters worse, forces of globalisation now seem to point to a much more demanding liberalisation agenda than was initially envisaged, with implications that may include various additional socio-political perils. Possibly having psyched themselves up for a relatively brief dash to reach the 'transition line', the leaderships in Vientiane and Hanoi have discovered that globalisation is more like a long-distance endurance race. Whether Laos and Vietnam have the necessary stamina and volition to stay in the race remains to be seen.

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