INTRODUCTION

In December 2018, some days after interviewing Pho (“Father”) Tha, he invited me, my research partner, and Pho Keo (his friend) for a lunch and drinking session at his home. Pho Keo and Pho Tha are both Theravada Lao Buddhists in their fifties. Comparing their socioeconomic status, Pho Keo was comparatively prosperous because he was a successful businessman in their old village; he also managed to send all his children to college. After the relocation, Pho Keo has been running some lucrative businesses powered by electricity and receiving financial support from his unmarried children. Now Pho Keo and Pho Tha are no longer neighbours as they live in the new settlement's different zones.

INTRODUCTION

When France seized control of the Lao territories on the east bank of the Mekong from Siam in 1893, the sparsely populated country remained a colonial “backwater” that received only little administrative and commercial attention (Gunn 1990; Ivarsson 2008). However, as Laos was rich in minerals, not only gold and silver but also tin and copper, it evoked imaginaries of a “Klondike Indochinois and New Bolivia” (Deloncle [1930] 2011, p. 116) and attracted numerous entrepreneurs and venturers. Taking the tin mining area in the Nam Phathaen valley (Khammouane Province, central Laos; see Figures 8.1 and 8.2) as an example, this chapter investigates the contingent processes of (capitalist) frontierization—processes of uneven and combined development on the ground—in past and present Laos.

The image of a resource frontier has certainly shaped the perception of Laos until the present day. Still in the 2000s, the Asian Development Bank depicted the country as a “new frontier” (Barney 2009, p. 147) and promoted transnational investment into mining, energy and agribusiness, which was a striking echo of colonial discourses on underdeveloped and underpopulated Laos. Both under colonial capitalism and in the context of present-day “market socialism with neoliberal characteristics” (Hann and Endres 2018), the vast, forested uplands of Laos (80 per cent of the state territory with only half of the country's population of 7 million), in particular, have been envisaged as a resource-rich frontier awaiting exploitation. This imaginary translated into extractive practice that produced considerable social and environmental costs among the fifty different ethnic groups of Laos and their largely subsistence-based economies (see, e.g., Kenney-Lazar 2018; Rigg 2005; Laungaramsri 2012; Dwyer and Vongvisouk 2017; Ponce, this volume).

As several authors have noted (Tsing 2005; Li 2014; Cons and Eilenberg 2019), the concept of the (resource) frontier can be used as a heuristic device to examine the interwoven social, economic, political and environmental dynamics and transformations at the margins of global capitalism (see as well the introduction to this volume by Rowedder and Tappe). In particular, the relationship between global capital and indigenous communities, processes of exclusion, and increasing inequalities can be examined through the lens of the frontier. Shifts in local subsistence strategies and labour relations under conditions of frontier capitalism and rudimentary industrialization constitute a key aspect to be discussed in this chapter.

This chapter argues that democratic developing countries were more likely to open their economies during the late-twentieth century if they violated workers' basic rights to organize and strike. The more democracies adopted such labor repression, the more likely they were to embrace free trade. The more democracies respected workers' rights, in contrast, the more likely they were to maintain high tariffs.

This chapter shows how labor repression played a crucial role in the history of free trade in many democratic developing countries. While the regression analyses in the previous chapter show that my argument is robust to alternative explanations and generalizable across more than 100 developing countries, this chapter begins to fill in the missing pieces - the causal mechanisms - that link democracy, labor repression, and trade liberalization.

Argentina transitioned from military dictatorship to democracy in 1983 and elected Raul Alfonsin as President. Alfonsin attempted to lower Argentin's tariffs and pass other neoliberal policies, but his economic reforms were blocked by a series of thirteen general strikes launched by the CGT, the labor union confederation led by Saul Ubaldini. When Alfonsin left office in 1989, Argentina's average tariffs still stood at 25 percent, only three percentage points lower than they had been in 1982, the last year of the military regime. By 1991, however, Alfonsin's successor, President Carlos Menem, was able to low tariffs to just 12 percent. This chapter tells the story of how Menem used labor repression to overcome union opposition and quickly open Argentina's economy.

In the mid-1980s, Prime Minister Rajiv Gandhi attempted to lower India's tariffs and open the country's economy to global competition. Gandhi's trade policy proposals led India's protectionist labor unions to launch a series of general strikes that helped to block these reforms; Gandhi left office in 1989 with India's average tariff still above 80 percent. This chapter continues this story into the 1990s, when Prime Minister Narasimha Rao launched a new attempt at trade liberalization. By 1996, Rao managed to lower India’s average tariffs to 37 percent - a major success compared to Gandhi's efforts, but relatively gradual liberalization compared to many other democratic developing countries. This chapter draws on archival research to illustrate how Rao used labor repression to weaken union opposition to his economic reforms.

This chapter tests my argument that the more democracies used labor repression to weaken union opposition, the more they moved toward free trade. It uses quantitative data on tariffs, democracy, and respect for labor rights from 126 developing countries from 1985 to 2010.

This chapter introduces the idea that developing countries with democratic governments repeatedly opened their economies while cracking down on labor unions.