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Working Paper
The Challenges Posed by Globalization for Economic Liberalization in Two Asian Transitional Countries
Laos and Vietnam
This paper examines the impact of globalization 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 globalization—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 globalization 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.