Mon, Nov 29, 2004 - Page 5 News List

Former socialists agree to reform their economy

HUGE STRIDES The leaders of Cambodia, Myanmar, Laos and Vietnam said at the ASEAN summit in Laos that they will step up reform and promote the private sector


Leaders of Cambodia, Laos, Myanmar and Vietnam agreed yesterday to "redouble" efforts to reform and integrate their formerly socialist economies by promoting private sector participation and facilitating trade and development in the sub-region.

Meeting in the capital of Laos, which is hosting the 10th summit of the Association of Southeast Asian Nations (ASEAN) on Monday and Tuesday, the four leaders signed a Vientiane Declaration on enhancing economic cooperation and integration between Cambodia, Laos, Myanmar and Vietnam, the economic laggards in the 10-country grouping.

The average per capita income in the four least developed ASEAN countries is US$250 per annum, compared with US$1,600 in the remaining six.

The four countries, acknowledged the growing gap between their economies and the six original ASEAN members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- and agreed to "redouble efforts to attain regional economic development through the implementation and our commitment to reform," according to the Vientiane Declaration.

Among other things, the leaders vowed to promote the greater role of the private sector in their economies, enhance market access to their markets for their ASEAN neighbors and three East Asian partners -- China, Japan and South Korea -- and to explore a single visa for the sub-region.

The Vientiane Declaration was signed by Hun Sen, Bounnhang Vorachith, Lieutenant General Soe Win and Phan Van Khai, the prime ministers of Cambodia, Laos, Myanmar and Vietnam.

The declaration spells out areas of accelerated cooperation between the four formerly socialist economies in trade, agriculture, transportation, industry, tourism and telecommunications.

For instance in transport, it vowed to "facilitate transit shipment of goods," a crucial clause for land-locked Laos.

Container shipments from Vientiane through Thailand to Bangkok port cost about US$1,200, higher than the US$800 it costs to ship a container from Bangkok to Japan and the US$300 for a container from Bangkok to Perth, according to business sources in Vientiane.

Laos could theoretically save costs by shipping via Vietnam.

Cambodia, Laos and Vietnam -- called "Indochina" by French colonialists -- were classic communist economies until the late 1980s when the former Soviet Union, their chief donor, collapsed.

Myanmar renounced its "Burmese road to socialism" in 1988, following nationwide protests against military rule and economic collapse in the country, which was declared one of the worlds least developed nations in 1987.

Since the late 1980s all four countries have had to implement market-oriented reforms, inviting investments from former foes and promoting exports to the West and democratic Asian countries.

Vietnam joined ASEAN, established in 1967 to counter the spread of communism in the region, in 1995. Laos and Myanmar joined in 1997 and Cambodia finally joined the grouping in 1999.

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