Building a clean and strong political system to meet the requirements of building a socialist-oriented market economy in Laos

CHANHTHASOUK KHAMPHAY
PhD Candidate, Institute of Politics and International Relations,
Ho Chi Minh National Academy of Politics

Laos has clearly defined its development orientation: “The Lao PDR is a socialist rule-of-law state of the people, by the people, for the people with the noble goal of striving to eliminate all oppression and exploitation, to implement justice, democracy, and social equality to bring a prosperous and happy life to workers. Solving social issues must be given due attention and focus along with the country’s economic development. Economic development must not come at the cost of ignoring or neglecting social issues”(1).

1. Characteristics of the socialist-oriented market economy in Laos

The socialist-oriented market economy in the Lao People’s Democratic Republic (Lao PDR) is an economy that has shifted from a multi-sector commodity economy to a market economy, operating fully and synchronously according to the laws of the market economy, while ensuring the socialist orientation, suitable for each stage of the country’s development. It is a modern and internationally integrated market economy; managed by the socialist rule-of-law state led by the Lao People’s Revolutionary Party, aiming to achieve the goal of a rich people, a strong country, and a democratic, equitable, and civilized society.

On its characteristics

In addition to inheriting the common achievements of mankind, the socialist-oriented market economy in Laos has its own characteristics, suitable to the specific development conditions of Laos, specifically:

The socialist-oriented market economy in Laos is a type of economic organization in the process of moving towards socialism from a backward, underdeveloped agricultural country. Therefore, building a market economy in Laos starts from a self-sufficient economy transitioning to a commodity economy, which then transitions from a commodity economy to a market economy.

The socialist-oriented market economy in Laos consists of many components, in which the state economy and the cooperative economy are the foundation, with the state economy playing the leading role. All economic components operate under that law and within the legal framework of Lao PDR.

The socialist-oriented market economy is essentially a type of economic organization based on both the principles and laws of the market economy and the principles and nature of socialism.

The socialist-oriented market economy is an economic model that is “open” both internally and externally.

The elements and operations of the market mechanism are not only affected by the general laws of the market economy but also governed by the specific economic laws of the dominant mode of production, which is:

On the ownership regime:

Unlike the market mechanism in the capitalist economy that operates on the basis of private ownership of the means of production, in which monopoly capitalist companies play a dominant role in the development of the entire economy; the market mechanism in the socialist-oriented market economy in Laos operates in an environment with many types of ownership relations, in which the public ownership regime takes the role of the foundation of the national economy. The socialist orientation requires the consolidation and development of the state economy and the cooperative economy, so that these two components become the foundation of the economy, capable of regulating and guiding the development of other economic components.

On class character and the State’s management purpose: In a socialist-oriented market economy with the management of a socialist rule-of-law state, the State’s intervenes to protect the legitimate rights of the working people, to achieve the goals: rich people, strong, democratic country, with an equitable, and civilized society.

On the operation mechanism: The socialist-oriented market economy is managed by the State and led by the Lao People’s Revolutionary Party. This mechanism ensures that the economy operates in accordance with the principles of the State on regulating the macro economy and the market leading enterprises.

On the relationship between economic growth and social justice: The State proactively resolves the relationship between economic growth and development and social justice. Social justice is not only the driving force for economic development, but also the goal of the new social regime. The success of the socialist-oriented market economy is not only reflected in high growth rates but also in the improvement of the actual living standards of various social strata, development in healthcare and education, narrowing of the rich-poor gap, preservation of ethics, traditions, and national cultural identity, and environmental protection.

On income distribution: The Party and the State play a role in formulating and organizing the implementation of social insurance regimes, income distribution policies, and social security policies for policy beneficiaries, especially families with revolutionary contributions, war invalids, and persons with disabilities, and so on(2).

The socialist-oriented market economy with the above characteristics requires the State to manage the economy and society by law. That is also an important premise for building a socialist rule-of-law state. Conversely, the socialist rule-of-law state is born and gradually perfected when the country’s political, economic, and social conditions develop to a certain level, creating the necessary material and spiritual conditions for the basic rights of citizens to be sufficiently and thoroughly guaranteed and implemented.

With the goal of “A prosperous and happy people, a prosperous and strong country, a democratic, equitable and civilized society”, the 9th Congress of the Lao People’s Revolutionary Party emphasized: “focus on leading the State and society, building and realizing a socialist-oriented market economy. That is an economy consisting of many components that develop together in a truly equal manner and are regulated by law. All economic components actively contribute to improving production capacity and have the capacity to compete in the process of international integration. Among the economic components, the state economy must become an important pioneering force for the socio-economic development of the country. At the same time, it strongly promotes economic components to cooperate with local people, businesses, households, small and medium enterprises, domestic and foreign economic components by improving the business environment, enabling greater strength and competition within the national economic base”(3).

2. The requirements to ensure the successful building of a socialist-oriented market economy in Laos

The requirements for creating an environment for building and developing a market economy

State management to ensure balanced economic development plays an important role in protecting citizens’ interests, lives, property and honor. The political system needs to have measures to establish and protect order in economic relations, ensuring a happy and peaceful life for the people. “Workers are entitled to have jobs, farmers are entitled to have land to develop agriculture and enough food to eat, industrial and commercial capitalists must be encouraged to produce and do business”(4) as pointed out by President Kaysone Phomvihane.

The current practice of Lao PDR requires the recognition of the existence of many economic sectors, ensuring equality among economic sectors; accepting competition between economic sectors, Lao entities participating in production and business as well as foreign entities in the domestic market.

Therefore, the Party leads the renovation and improvement of the organization and apparatus of the political system, promulgates legal regulations in the direction of recognizing a multi-sector economy, diversifying types of production and business, declaring the right to freedom of business, autonomy of production and business entities, the equality of entities when participating in production and business, legal regulations on bankruptcy, fair competition, anti-monopoly, anti-dumping, investment, value added tax, income tax, social stratification, environmental pollution, corruption and other social evils, etc. To achieve this, in the process of building a market economy, it is necessary to create an equal environment for all sectors of the economy. In fact, the Lao People’s Revolutionary Party is renovating and improving the organization and political apparatus of the system to ensure the building and development of a socialist-oriented market economy as follows:

On the policy of building a multi-sector economic policy: The Lao People’s Revolutionary Party emphasizes: “The economy in the people’s democratic regime is a commodity economy with many forms of ownership, many components, many economic organizations, with many different levels and scales”(5). In addition to the state economy and collective economy, the State also recognizes other economic sectors such as private economy, private capitalist economy, joint stock economy, people’s cooperative economy, family economy, joint venture economy with foreign countries, etc. These economic sectors are closely related to one another, in which the state economy is the pillar, holding a key position in the national economy.

On economic structure building: The 5th Central Conference of the 11th Lao People’s Revolutionary Party clearly stated: “The economic structure is a unified body of national economic relations, including: sectorial structure, component structure and regional economic structure”(6). These three parts are closely related to one another, expressed in the unity and conformity between productive forces and the building of production relations in each period. Building a reasonable economic structure aims to promote the country’s economic development, liberate productive forces and improve social labor productivity.

On market development: The documents of the 11th Congress of the Lao People’s Revolutionary Party affirmed: “It is necessary to build a national economy with a unified market, active competition and a system of qualified service units to act as a bridge between economic units, between individuals and enterprises, to ensure that the State can manage and regulate the national economy on a macro level”(7). The synchronous market system includes the commodity market, labor market, financial - monetary market, information market, technical - technological market, retail market, wholesale market, and multi-level financial and monetary service units.

On the development and renovation of economic management mechanisms: When shifting to the building and development of a socialist-oriented market economy, the management and regulation of the centrally planned economy is gradually eliminated. This both facilitates and demands a renewed awareness, paving the way for the State’s new management and regulation mechanism over the economy.. The socialist-oriented market economy operates according to a market mechanism with State management under the leadership of the Lao People’s Revolutionary Party. The role of the Party and the State in managing the market economy is expressed through the following key functions:

1. The State creates a stable and favorable legal environment for individuals and businesses of all economic sectors to operate in the right direction. In addition to creating a favorable legal environment, the State creates a stable socio-economic environment for production and business entities to operate, maintaining political and social stability in the process of renovation. This is a matter of principle and a comparative advantage of the country to attract foreign investment; stabilize and grow the macro-economy; build an economic infrastructure system (developing the traffic, transportation, and communications systems) and social infrastructure (education and training sectors, health care systems, and other public services).

2. The State drafts development plans, master plans, and socio-economic programs and issues policies to guide actors in implementing those plans and programs through financial-monetary policies and the use of economic leverage tools.

3. The State arranges and reorganizes economic units, especially state-owned enterprises; Allocates economic zones and concentrated industrial zones to create a new, reasonable economic structure, in line with the market mechanism; Reorganizes the management system, reorganizes state economic management agencies; Renovates administrative institutions and procedures; Trains and retrains the team of state management and business management officials; Establishes economic relations with countries and international economic organizations.

4. The economy is always dynamic, therefore, in the process of regulating the market economy, the State must both comply with and apply the laws of the market economy and promote the positive aspects of the market mechanism to regulate and control the market to operate according to the State’s orientation, ensuring stable, fair and effective economic development.

5. The State performs the function of inspection and control to establish order and discipline in economic activities, detect and prevent violations of the law, thereby protecting national assets and the people’s interests, contributing to economic growth and gradually achieving social justice”(8).

On the requirements for corruption prevention and control

Controlling and preventing corruption is the responsibility of the entire political system under the leadership of the Party, promoting the combined strength of all sectors and levels, and promoting the responsibility of heads of agencies, organizations, units, unions, and the masses.

Controlling and preventing corruption is an important, urgent, and long-term regular task to serve socio-economic development, maintain political security, social order and safety, consolidate the political system and the great national unity bloc, and build a clean and strong Party and government.

Using comprehensive solutions to control and prevent corruption with focused and targeted practices of thrift, anti-bureaucracy and wastefulness.

Inheriting the nation’s fine traditions, focusing on summarizing practices and selectively absorbing foreign experience in corruption prevention and control, aiming to build a transparent investment and business environment.

Building a specialized force with political qualities, mettle, skills, and professional ethics, acting as the core in the work of controlling, preventing, detecting, and handling corruption cases in a specialized direction with appropriate means, tools, and skills, ensuring both in-depth and comprehensive coverage of all fields and aspects of economic and social life.

On the requirements for developing a contingent of cadres and civil servants

To meet the requirements of building a socialist rule-of-law state and developing a socialist-oriented market economy in Laos today, the Party and the State need to pay due attention to building a contingent of cadres and civil servants with strong political qualities, ethics, a healthy lifestyle, professional qualifications, and management capacity. The more democratic a society is, the more perfect and exemplary the ethics of cadres and civil servants must be. Cadres and civil servants must always practice improving their ethical qualities, cultivate themselves, and avoid negative manifestations. In the context of the increasingly improved intellectual level of society, and the growing development of scientific and technological knowledge, cadres and civil servants must be required to have the knowledge and the ability to think creatively, sensitively, independently,

and thoroughly.

3. Building a clean and strong political system, ensuring the development of a socialist-oriented market economy in Laos

Firstly, improve the leadership capacity and fighting strength of the Party

To successfully build a socialist-oriented market economy, it is necessary to improve the leadership capacity of the Lao People’s Revolutionary Party. The Party needs to set out the right guidelines and strategies for national development in general, economic development in particular, and protect the interests of the majority of the people. To have sufficient leadership capacity, the Party must be clean, maintain the stance of Marxism-Leninism, Kaysone Phomvihane Thought on resolving political-economic relations in general, and the impact of politics on the economy in particular.

To promote the Party’s leadership role in developing a socialist-oriented market economy, it is necessary to continue to renovate the Party’s leadership method over the State. The Party leads the State through its viewpoints, guidelines, and resolutions; institutionalizes and concretizes them into the Constitution, laws, plans, and major work programs of the State; properly assigns cadres and regularly inspects the implementation. The Party leads but does not make excuses or act on behalf of the State. Rather, it strongly promotes the proactive and creative role of the State in managing the country and society.

To ensure the renovation and enhancement of the Party’s fighting capacity in the current conditions of building a socialist-oriented market economy in Laos, it is necessary to thoroughly grasp the following viewpoints:

It must be based on the ideological foundation of Marxism-Leninism, Ho Chi Minh’s thought and Kaysone Phomvihane’s thought.

There must be frequent summarization of practical experience, drawing of lessons, and adjustment of the organization and activities of the political system.

The proletarian and working-class nature must be maintained.

Political and socio-economic stability must be maintained, and hostile and opportunistic schemes and actions must be prevented.

Ensure the principle of democratic centralism from the central to the local levels.

It must be suitable for the conditions of the country and the times.

Secondly, renovating the organization and operation of the State

Continue to renovate the organization and operation of the State to ensure the role of the State in developing the socialist-oriented market economy. Building a strong, streamlined, effective, and efficient socialist rule-of-law State is an important factor in developing the socialist-oriented market economy.

It is necessary to continue to renovate the organization and operation of the National Assembly and elected bodies at all levels to meet the requirements of perfecting the legal system and better perform the task of making decisions on important national issues and the function of supreme supervision.

Perfect the election mechanism to improve the quality of National Assembly deputies, ensure a reasonable number of full-time deputies, improving the quality of the People’s Council and National Assembly committees.

Promote state administrative reform, effectively implement the one-stop mechanism, build a democratic, clean, strong, and gradually modernized state administration; renovate the organization and operation of the Government towards building a unified, modern, and streamlined executive agency; strongly decentralize, give more proactive power to local governments; ensure autonomy and self-responsibility of local governments within the scope of decentralization.

Continue to renovate the organization and operation of judicial agencies, build a system of clean, strong, democratic, strict judicial agencies, that protect justice and human rights; promote the implementation of the judicial reform strategy; Build a mechanism to adjudicate on violations of the Constitution in all legislative, executive and judicial activities.

Restructure and redeploy the contingent of cadres and civil servants; promote training, fostering, and improving capacity and ethical qualities; strengthen discipline and administrative discipline in the public apparatus.

Thirdly, enhance the supervisory role and function of the Lao Front for National Construction and socio-political organizations together with the entire people in developing a socialist-oriented market economy

Reorganize and consolidate the organizational structure of the Lao Front for National Construction and socio-political organizations (Trade Union, Youth Union, Women’s Union, Veterans Association) together with the fundamental renovation of the content and methods of operation towards focusing on the grassroots, closely connecting with union members, gradually overcoming “administrativization” in activities and the “bureaucratization” of the staff.

Improve laws, mechanisms, and policies to create conditions for the Front, mass organizations, and all people to effectively participate in the process of planning, implementing, criticizing and supervising the implementation of laws, policies, and guidelines for the sake of socio-economic development.

It is necessary to promote the establishment of grassroots trade union organizations in enterprises in economic zones, industrial parks, and export processing zones to gather workers into trade unions, actively participate in production and business, and ensure jobs, income, and livelihood for workers and laborers.

Received: December 29, 2023; Revised: April 6, 2024; Approved for publication: April 6, 2024.

_________________

Endnotes:

(1) Bunthai Khu Mixay: The role of the state in economic management, Lao National Political and Administrative Publishing House, 2016.

(2) Central Economic Committee of the Lao People’s Revolutionary Party: On economic development policy in the new period.

(3), (5), (6), (7) The 7th, 8th, 9th, 10th and 11th Congresses of the Lao People’s Revolutionary Party.

(4) Kaysone Phomvihane: Selected Works, vol.1, p.6.

(8) Ta Ngoc Tan, KiKeo Khaykhamphithoune (co-editors): Building a rule-of-law state in the conditions of developing a socialist-oriented market economy in Vietnam and Laos, Political Theory Publishing House, Hanoi, 2015.