Virtual meanderings

Laos | The Growing Divide

My Lao breakfast

I’ll begin this post with a short story that I witnessed, and then add some comments.

One thing is undisputed – the influx of tourists (and money) has transformed the lifestyle of Vang Vieng residents radically. Prior to the town becoming a tourist attraction (10 years ago?) the town residents and the villagers in the countryside had a similar lifestyle. Nowadays every job in town revolves around tourists – tubing, bars, restaurants, guest houses, cafes, internet rooms, tourist agencies, hostels, massage parlors, peddlers, pancake makers, bike and scooter rentals, shake stalls. One side effect of the many is that the “goodies” originally enjoyed by the tourists have made their way into the lifestyle of this newly created Lao “middle-class” – mobile phones, A/C, motorized scooters, plasma TVs, etc. When I biked around the Vang Vieng vicinity I could confirm that the villagers had a lot of catch-up to play – people lived simple and off the land. (Luckily, they have power lines and electricity – courtesy of the Lao socialist government, I guess).

Vang Vieng biking

Now, the story. I was having my breakfast in an open café near the guesthouse – I was the only customer inside the café. The price for a fresh French bread, a cup of tasty Lao coffee and two hard-boiled eggs was 15,000 kip ($2).

An elderly woman showed up – she wore simple blue cotton clothing. She carried a covered basket on her back and – I could guess from her actions – offered her produce to the young woman from the café – who, I presume, was the wife or daughter of the owner. The elderly woman took out some of what was inside the basket. It was corn. The young lady exchanged some phrases with the old woman. The tone of her voice and the look on her face seemed to me somewhat arrogant and pejorative. She eventually made up her mind, picked up some corn ears – and paid the old lady.

Village woman - town woman

Courtesy: Author

   I did not see well how much she paid, but it was certainly not a big denomination banknote. Very likely it was one under 1000. The old lady politely thanked, smiled – as is customary in Laos, put her corn basket back on her back and went further.

And now – some comments. The Lao currency – the kip – is exchanged to the US dollar at around 8,000:1 . Naturally, just about anything you buy costs thousands – e.g. a night at the hostel was about 25,000 kip ($3), the entry to the national museum was 30,000, the best fruit shakes in the world cost 5000, a van ride from Luang Prabang to Vang Vieng costs 100,000 ($12), etc.

Surprisingly, in my travel guide-book there was still the information that (officially?) the kip was further subdivided into 100 att. The only reasonable way to interpret this was that the atts had been in circulation up until some time ago, perhaps not too long ago – or else why mention it at all. I looked up how fast inflation had worked in Laos online. Here’s a quote from Wikipedia:

“In 1979, banknotes were introduced in denominations of 1, 5, 10, 20, 50 and 100 kip. 500 kip notes were added in 1988, followed by 1000 kip in 1992, 2000 and 5000 kip in 1997, 10,000 and 20,000 kip in 2002 and 50,000 kip on January 17, 2006 (although dated 2004). On November 15, 2010 a 100,000 kip banknote was issued to commemorate the 450th anniversary of the founding of the capital, Vientiane and the 35th anniversary of the establishment of the Lao People’s Democratic Republic.”

Unsurprisingly, inflation has moved hand in hand with the economic opening of the country in the early 90s. For historical reasons Laos – ruled by its ever-more-powerful neighbors, colonized by the French, bombed to oblivion by the US – started developing its economy in the 70s basically from scratch. By the early 90s was still basically a self-sufficient economy with few (if any) competitive products on the international markets. After the Soviet Union – its most important backer – disintegrated, Lao government desperately looked for a new way of revenue for the country’s economic development. Laos, being a land-locked country did not have much options. Agriculture and tourism – that’s about it. So this is for what they went.

What I am getting at is that since the 90s the country has clearly been moving on two tracks. Some occupations/places/people have been the lucky beneficiaries of the country’s efforts to move forward economically – while others have seen little or nothing of it – for objective reasons. Sheer luck (e.g. living at the right place) has played a bigger role in the process who gets to advance and who gets to linger behind – than any other factor (education, entrepreneurial skills, etc.).

So, figuratively speaking – some people got the kips, while others were left with the atts. Those benefiting from exports or tourism have gained a lot – Luang Prabang and Vang Vieng are two such examples. But should one act like they succeeded by their own ingenuity when  they were simply sitting on a gold mine? The answer to this – in the case of Lao – is yet to be seen.

100000 Lao kip


One response to “Laos | The Growing Divide

  1. Pingback: Organized or freestyle? Organized be it this time… « mastercopycat

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