LAOS.pdf

6 L AOS L AOS MIGHT BEST BE DESCRIBED AS A QUASI NATION. I T EMERGED from maps drawn by European colonialists rather than from a sense of territory and nationhood among a united people. The history of Laos...

6 L AOS L AOS MIGHT BEST BE DESCRIBED AS A QUASI NATION. I T EMERGED from maps drawn by European colonialists rather than from a sense of territory and nationhood among a united people. The history of Laos is rid- dled with constant warfare among contending forces within its borders and the meddling of external powers from without—mainly Thailand, Vietnam, China, France, and the United States. Since it seized power in 1975, the present communist government has faced ongoing problems with few signs of genuine progress: uniting ethnic groups that have fought with each other for decades, resettling large groups of refugees, promoting development in an overwhelmingly rural population, educating a citizenry with minimal educational institutions, and protecting the nation’s sovereignty against encroachment by neighbors and outside powers. Laos is landlocked, but uniquely so. Its isolation is exacerbated by the physiographic borders it shares with each of its neighbors. Remote moun- tains lie along Laos’ northern borders with China and Vietnam, and the rugged Annam Cordillera defines its long eastern border with Vietnam (in- hibiting overland routes to the South China Sea). To its west, the broad and meandering Mekong River separates Laos from Burma and most of Thai- land. Culturally, the Mekong supported Lao peoples on both sides of the river, but the first modern bridge appeared only in the mid-1990s. Laos’ river access to the Mekong Delta is inhibited by the unnavigable Khong Falls on its southern border. Thus, lowland Laos, inclusive of the Plain of Jars, sits as a land island, disadvantaged in the new international era by the lack of high- ways, railways, and port access.1 Given the relative economic dynamism of its neighbors, Laos’ full economic potential as a modern crossroads for trade and transport is yet unmet. Contemporary Laos has changed little over the decades. It remains a largely rural, subsistence, agrarian society of some 6.2 million people divided 167  LAOS M eko C H I N A ng R. V I E T N A M Phongsali M M R Hanoi er Ri v C Ou Luang Plain of Me k o n g Prabang h Jars L A O S a Gulf î n Xiangkhoang of R i ve r e Phou Bia Nam 2,830m To n k i n Ngum Res. A Vientiane M n eko n ng a Phu Soi Dao 2,120m m i t i Savannakhet q R iver u r e ve Ri T H A I L A N D Kon g Pakxe 0 100 mi Champasak N Me k o n g 0 100 km Bangkok C A M B O D I A Ri v er  Laos 169 among over forty ethnic groups, with the dominant lowland Lao consisting of just over 4 million people. The population density of Laos is the lowest of all Asian countries. Theravada Buddhism, variably blended with local spirit beliefs, predominates among the Lao and among many upland groups. Most ethnic Lao are isolated from both their regional neighbors and the world, as well as from upland ethnic minorities within Laos itself. Almost all Lao are poor. The household economy is based on rice and still relies on water buffalo—with over 1,200,000 head, there is roughly one water buffalo for every five persons in Laos.2 Modern farming techniques and equipment have been slow to reach Lao farmers. Amazingly, less than 5 per- cent of the country is suitable for agriculture, yet 80 percent of Lao work in the sector. In spite of recent economic gains from economic reforms, Laos’ per capita gross national income in 2011 was only $1,130. Contemporary problems in Laos originate from centuries-old conflicts, when ancient Lan Xang—“the Kingdom of a Million Elephants”—was a bat- tleground for the expansionism of neighboring states. It was not until the fourteenth century that a semblance of national unity emerged. However, dynastic quarrels in the eighteenth century undermined this unity, and the area was divided into the kingdoms of Luang Prabang in the north, Cham- pasak in the south, and Vientiane in the central region. Vietnam and Thailand periodically plundered Lao kingdoms until the French colonized the area beginning in the late 1880s. In 1899, the French claim of suzerainty consolidated Laos into a single political unit, but French rule did little to modernize or integrate the nation. On the contrary, a small group of elite Lao families was allowed to consolidate its power; thus, the Lao emerged from colonial rule (after World War II) more divided, isolated, and backward than ever. From 1941 to 1945, the Japanese ruled Laos, although the collaborating Vichy French administered many governmental affairs. At the end of the war, the Gaullist French recaptured Vientiane, the administrative capital, and fought a group called the Lao-Issara (Free Lao), which established a govern- ment-in-exile in Bangkok. This group became the forerunner and nucleus of the separate procommunist, anti-French Neo Lao Hak Sat (NLHS)—the Lao Patriotic Front. Lao-Issara was led by Prince Souvanna Phouma and his half-brother, Prince Souphanouvong, who later broke off and joined the NLHS, which was operating in areas held by the Vietminh. By 1953, the NLHS’s military force, known as the Pathet Lao, had seized control of the nation’s northeastern provinces. In 1954, France accorded self-government to Laos at the Geneva Confer- ence, which effectively gave Laos complete independence. The aftermath of the Geneva Conference was a period of disarray for Laos, as the competing sides vied for control of the populace and the countryside. Also in 1954, 170 LAOS when the Pathet Lao was making significant military gains in large areas of the countryside, the United States sponsored a coup by anticommunists against Souvanna Phouma, who had become premier of the new nation but was considered too much of a neutralist by the U.S. government. The coup failed, but Souvanna Phouma was given notice that even neutralist policies were considered intolerable by the United States. When a right-wing gov- ernment appeared in 1955, the United States immediately began a $45 mil- lion annual aid program. In 1957, the neutralists, led by Souvanna—this time with backing from the United States—set up a government emphasizing national unity, with cabinet posts for leftists and rightists. In special elections called for in the Geneva agreements, NLHS candidates won the majority of seats, an outcome deemed intolerable by Souvanna’s government and by U.S. diplomats. To overturn the results of the election and reverse the apparent popular trend toward a communist government, the United States—principally through the CIA—extended massive support to right-wing regimes that excluded NLHS representation. There were numerous coups d’état during this period as anticommunist leaders jockeyed for power. However, the major benefici- ary of governmental chaos was the NLHS movement, which continued to expand its control as it received increasing amounts of military supplies and support from the Soviet Union. At the second Geneva Conference, in 1961, neutralist Souvanna, leftist Souphanouvong, and rightist Boun Oum agreed on coalition rule. The United States reversed its policy and supported Souvanna Phouma’s ap- pointment as prime minister (after he gave secret permission to the United States to bomb Pathet Lao areas). The coalition collapsed almost immedi- ately, however, as factions maneuvered for power. The NLHS broke from the coalition, and Souvanna Phouma’s Royal Lao government, a constitutional monarchy, became a virtual client of the United States. Escalation of the Vietnam War changed the nature of the struggle be- tween the NLHS and Royal Lao government forces. Hanoi’s interest in Laos increased as its need for sanctuaries from U.S. bombing became paramount. Vietnam, in violation of the Geneva agreements, escalated its presence in the northeastern provinces of Laos as the United States, also in violation of the agreements, began secret bombing missions to Laos in 1964. In the following years, the landlocked nation became one of the most heavily bombed coun- tries in history; some 2.1 million tons of bombs were dropped between 1964 and 1972 (about two-thirds of a ton per Lao). 3 Despite this ferocity, the strategic effect of the bombing was minimal, prompting the CIA to train and supply Hmong and other upland peoples, introduce military advisers, and use the U.S. Agency for International Development as a front for intelligence  Laos 171 and training purposes. Laos became the battleground for a neighboring war fought by surrogate powers. The Laos Peace Accords came in 1973 as the American withdrawal from Vietnam was completed. The accords called for stopping the bombing, dis- banding foreign-supported forces, removing all foreign troops, and institut- ing the coalition Provisional Government of National Unity (PGNU). The new ministries were divided between the Royalists and the Pathet Lao. At the time of the signing of the accords, the NLHS controlled about three-fourths of all Lao territory and one-half of the population. Both sides were allowed to keep their zones of control until elections could be arranged. The well-organized Pathet Lao (now called the Lao People’s Liberation Army) prevailed over the Royal Lao faction in the coalition government, which lacked discipline, was enervated by family feuds, and was considered a puppet of the United States. The Pathet Lao spoke convincingly to the ru- ral people of Laos, who had seen their agricultural base destroyed, their population dislocated, and their villages destroyed.4 No family had been left unscathed by the civil war and the U.S. bombing. In December 1975, the Pathet Lao dissolved the PGNU, abolished the 622- year-old monarchy, and established the Lao People’s Democratic Republic (PDR). The change in government was preceded by communist victories in Vietnam and Cambodia and by procommunist demonstrations throughout Laos. The rightist ministers fled, and all power was eventually assumed by the communists. Souvanna Phouma resigned, and Kaysone Phomvihane, general secretary of the newly formed Lao People’s Revolutionary Party (LPRP), be- came the new prime minister. A Supreme People’s Council was set up with Prince Souphanouvong as president and chief of state, while Kaysone Phomvihane—virtually unknown to all but a handful of communist leaders before 1975—assumed political and administrative control of the country. In contrast to Vietnam and Cambodia, where communists came to power as a result of military victory, the change of government in Laos came about rela- tively peacefully. The communist victory changed Lao politics fundamentally. For centuries the region had been dominated by a small group of wealthy families that wielded great political and economic influence. Most of those families fled to Thailand, Europe, or the United States, and those that remained underwent “reeducation” programs to cleanse them of their “bourgeois mentality.” An estimated 300,000 persons, many of them the most educated in Laos, fled to Thailand following the change in government. The flight of educated Lao and the systematic expunging of civil servants of the former administration created a leadership vacuum that seriously impaired the government’s ability to administer and implement new programs. 172 LAOS The new government moved quickly to eradicate the worst vestiges of what they considered bourgeois society by banning nightclubs, massage par- lors, and dance halls. Private enterprise was stifled, and the government at- tempted, rather feebly, to collectivize farms. Most farmers resisted collectivization and continued subsistence production.5 The government’s reeducation programs, affecting thousands of Lao, made the populace wary of the new regime. Refugees reported arrogant bureaucrats and repressive rules and regulations. Another major change was the withdrawal of the United States as a principal player in Lao politics. Most Western aid, which had funded over 90 percent of the Royal Lao government budget, ended when the commu- nists took power, although the countryside was still devastated from the war. Although the United States did not break diplomatic relations with Laos after the communist takeover, U.S. involvement became peripheral, and the Soviet Union and Vietnam filled the vacuum. In 1979, the leaders of Laos and Vietnam signed a joint revolutionary declaration, the Treaty of Friendship and Cooperation, granting Vietnam the right to maintain some 40,000 troops in Laos. China soon accused Vietnam of working to create an Indo-Chinese federation dominated by the Vietnamese and withdrew the aid it had given to Laos for numerous development projects. The Soviet Union, supplying some 2,000 advisers and $50 million in annual aid, was Laos’ superpower patron until 1991, when the U.S.S.R. collapsed. The Lao PDR was ruled from 1975 to 1991 without a constitution. When one was finally adopted, it strengthened the presidency (at that time held by Kaysone), although the LPRP retained its position as the primary institution. Civil liberties were allowed “as prescribed by law,” but the major advantage of the document was to provide a semblance of stability and predictability with regard to governmental affairs. President Kaysone’s death in November 1992 provided an opportunity for Laos to usher in a new generation of leaders more in tune with the interna- tional movement away from communism and toward democracy. However, Prime Minister (and former defense minister) Khamtay Siphandone, who was nearly seventy years old, was named leader of the LPRP, and National As- sembly chairman Nouhak Phoumsavanh, who was nearly eighty, was named president. Their hard-line conservatism and provincial outlook frustrated those who wanted Laos to look more toward the West for direction. In the late 1980s, Laos, like China and Vietnam before it, opened its economy by pursuing a “new thinking,” or a market-based approach. Un- der the “New Economic Mechanism,” the government jettisoned failed col- lectivization policies and centralized economic allocation. By 1995, the twentieth anniversary of LPRP rule in Laos, market economics was in com- mand and party rule was far less doctrinaire. The LPRP also gave new life to  Institutions and Social Groups 173 Buddhism by restoring temples and encouraging the sangha, or Buddhist monastic order, to play a role in development. In what was surely a commu- nist-world first, the funeral service for the regime’s first president, the “Red Prince” Souphanouvong, was an entirely traditional Buddhist ceremony, with no ideological overtones. In 1996, the Sixth Congress of the LPRP further moved Laos toward com- prehensive but slow economic reforms. Personalism, conservatism, and na- tionalism remained the dominant characteristics of the leading party. Military generals held six of the nine positions in the Politburo; party leaders viewed the continuation of their unity (in a nation made up of numerous ethnic groups) as the primary national goal. This goal has been difficult to achieve because the economic reforms have made the urban areas wealthier, whereas the rural areas, populated by minorities, have remained poor. Since the new millennium began, the Lao government has continued to liberalize the economy but retained its centralized monopoly on political life. Signs of Asian-style economic dynamism have emerged, mainly in urban ar- eas, but economic reform has yet to modernize or transform the economy to the degree it has in neighboring Vietnam. Laos continues to be both Bud- dhist and authoritarian, both Marxist and capitalist. Regime leaders, now portraying themselves as the protectors of Theravada Buddhism, build mon- uments to legendary Buddhist monarchs of fourteenth-century Lan Xang to prop up their legitimacy. Khamtay, at eighty-three years of age, was replaced as state president in 2006 by Choummaly Sayasone, yet another old-line conservative. He has yet to be replaced. Other leadership changes produced by the Eighth Party Congress did little to dislodge political hard-liners from the Politburo. The post–revolu- tionary generation leaders who did emerge from the Congress celebrate ties to Laos’ communist past. Among the party’s most notable new insiders are the sons of Kaysone and Khamtay, suggesting hints of dynastic rule.6 Buoasone Bouphavanh, a younger official who became the regime’s fifth prime minister in 2006, surprisingly resigned in late 2010 claiming “family problems” as the cause. Speculations abounded as to the real reason, but one seasoned observer believes that loss of support by party bosses only months before the Ninth Party Congress of 2011 was the result of Buoasone’s attempt to crack down on the “negative phenomena” of corruption.7 Whatever the reason, his replacement, former Pathet Lao guerrilla Thongsing Tham- mavong, ten years Buoasone’s senior, represents a return of the old guard. I NSTITUTIONS AND S OCIAL G ROUPS Lao People’s Revolutionary Party Since 1975, the country’s dominant institution has been the LPRP, the com- munist party that emerged from the Pathet Lao leadership. Led by elderly 174 LAOS revolutionaries who fought against the French, Japanese, and Americans, the party has practiced democratic centralism, requiring party leaders’ unani- mous support in all decisions. Policy was formulated and implemented by the party Politburo, led by Kaysone Phomvihane. Kaysone had emerged in December 1975 from the caves of a northern province where he and his Pa- thet Lao colleagues had hidden to escape U.S. bombing. Outside the inner circle of the Pathet Lao, few Lao knew him or knew about him, and Kaysone eschewed a cult of personality, living quietly and making himself available to very few visitors except communist allies. Little was known about his past except for his close association with Vietnam, where he had studied at the University of Hanoi. Kaysone held the positions of prime minister and then president, as well as general secretary of the LPRP. Surrounded by colleagues from his revolution- ary days in the 1950s, he changed his rule little after 1975. Continuity and stability were the themes of governmental leadership until 1979, when re- forms were instituted that significantly changed the government’s hard-line policies.8 After that time, and especially after 1986, when the “new thinking” reforms were instituted, Kaysone visited noncommunist countries, and his activities were even reported in the press. Nevertheless, he remained one of the world’s least-known leaders up to his death in 1992. The LPRP, having failed to achieve popular support for its socialist policies, launched a series of reform policies in 1986 to decentralize economic decision- making and to liberalize, both economically and politically. In 1989—for the first time—the LPRP allowed elections for the National Assembly, Laos’ nomi- nal legislative body. Some 121 government-approved candidates ran for 79 seats, and 65 of the victors were party members.9 Since the 2006 elections, all but 2 of the now-115 seats are held by members of the party. Assembly elec- tions, little more than Soviet-style plebiscites for preselected LPRP candidates, mean little in a system where the assembly institution enjoys little indepen- dence from the party apparatus. In spite of cosmetic changes, the locus of all power in the system remains the 11-member Politburo, itself the product of a 61-member Party Central Committee. To a certain degree, mass organizations that assemble youth, women, labor, or minority groups to follow party directives are more connected to the grass roots of Lao society than the LPRP itself. The Lao Front for National Con- struction (LFNC), for example, is charged with the daunting task of unifying Laos’ disparate ethnic groups. Created in 1979, the LFNC’s organizational reach extends to every administrative level of government in an effort to co-opt local leaders into the state apparatus. The LPRP is corrupt. “Corruption is the ogre in the woodpile of Lao poli- tics,” according to one scholar, who adds, “Members of the Politburo and  Institutions and Social Groups 175 their families have become excessively rich.”10 Skimming off of concessions in mining, timber, and hydropower projects is standard practice. Even as ag- gregate economic growth raises per capita averages, it is members of the party and their close associates who are experiencing the most gains. Unlike Vietnam and China, where the military is increasingly separate from party leadership, military leadership remains integrated with the LPRP. After a focused recruitment effort, party membership now stands above 190,000, more than double the party’s size in 1995. It remains to be seen whether a younger generation of leaders will emerge to replace the “revolu- tionary generation” of the LPRP. Buoasone’s sudden resignation in 2010 doesn’t bode well for such a possibility. International Aid Community The Lao PDR government collaborates extensively with the international aid community in pursuing its development policies. International agencies, re- gional bodies, and bilateral aid programs do not directly control policy but do much to set the policy agenda in Vientiane. A principal international partner, for example, is the United Nations Development Program (UNDP). It ties its current efforts in Laos to achieving UN Millennium Development Goals. Focusing on programs to reduce Laos’ poverty rate by half and move the country out of least developed country (LDC) status, the UNDP guides a formalized roundtable process of aid coordination with various UN agencies and the network of embryonic civil society organizations now operating in the country.11 Other principal partners with the Lao government include the Asian De- velopment Bank, through its Greater Mekong Sub-Regional Program, the IMF and World Bank, and over fifty bilateral agencies of OECD countries that help prop up the Lao state. The Asian Development Bank alone is re- sponsible for 75 loans worth over $1.7 billion since 1968. The World Bank is particularly influential in supporting the massive hydropower projects the Lao government is undertaking. Antiglobalization critics angrily indict the World Bank for manipulating Lao authorities and the policy agenda.12 Lao Abroad Since 1975, over 300,000 refugees, mostly lowland Lao, have left the country. Ethnic Hmong, Mien, Lahu, and other upland groups recruited by the CIA for its secret war in Laos also compose a large segment of this migrant popu- lation. Without U.S. “allies” to protect them, many Hmong and others were subject to genocidal recrimination in the form of chemical-biological toxins falling from Vientiane aircraft in the late 1970s and 1980s. As reported by droves of refugees fleeing into Thailand, whole villages suffered illness and 176 LAOS fatal hemorrhaging from “red, yellow, and green gases” dropped from the sky. Disastrous living conditions forced others, including many lowland Lao, to seek refuge as well. Refugees reported forced labor, torture, “seminar camps,” and starvation.13 After years in Thai border camps, most refugees were resettled in third countries such as the United States, France, and Australia. A vocal segment of the overseas refugee community now actively lobbies foreign govern- ments to exert greater pressure on the LPRP communist regime. Lao refugees regularly target their protests against the governments of the United States and Thailand for failing to address the refugee problem as well as on- going human rights abuses by Vientiane. The plight of upland minority groups within Laos and the forcible repatriation of refugees from border camps draw the attention of Amnesty International and other human rights groups. Among the Lao abroad is exiled crown prince Soulivong Savang, grand- son of King Vattana. Laos’ last king died in a reeducation camp following his overthrow in 1975. Soulivong has held meetings with U.S. government offi- cials and pushed for a more aggressive international isolation of Vientiane. Residing in France, the crown prince remains a dim symbol of hope for Lao seeking regime change and restoration of a constitutional monarchy. In 2007, Hmong community leader Vang Pao, a former CIA ally, was arrested at his home in California on evidence of plotting to overthrow the Lao government—an act in violation of U.S. law prohibiting Americans from acting violently against foreign governments that have peaceful relations with the United States. In support of the legendary leader, hundreds of Hmong- Americans flocked to the Los Angeles courthouse where Vang stood accused. Vang was eventually released on a $1.5 million bond. The alleged plot of Vang Pao and his coconspirators included smuggling Stinger missiles into rebel areas and hiring U.S. mercenary forces to launch an offensive on Lao govern- ment forces. Hmong rebels have in fact organized attacks within Laos in recent years, producing some fatalities. At the age of eighty-one, Vang Pao died in 2011. With him perhaps died any future rebellion activity from the Hmong abroad. An increasing number of economic migrants from Laos, often undocu- mented, now work in Thailand as laborers. The wages earned and wealth cre- ated by these workers, together with the earnings of overseas Lao in third countries, often find their way back to relatives in Laos. In recent years, re- mittances from abroad, according to Lao government reports, accounted for as much as 28 percent of household earnings in many parts of Laos.14 The Lao government has also sought, without great success, to entice wealthy and capable overseas Lao back to the country by offering them government jobs, new homes, and other perks.  State-Society Relations and Democracy 177 S TATE -S OCIETY R ELATIONS AND D EMOCRACY Laos, like its neighbors Cambodia and Myanmar, is an example of a state with little capacity to meet the needs of its citizenry or to mobilize its collec- tive strength. Laos does not have a societal group that is independent of so- cial controls and designs of state leaders. The LPRP dominates every aspect of Lao political life, having co-opted virtually the entire administrative class and local leadership. In Laos there is no independent intellectual class capa- ble of competing with the state leaders. The long tradition of student ac- tivism seen in Thailand, Indonesia, and Burma is almost nonexistent. A 2009 attempt of antigovernment protest by a group of student activists led to ar- rests and exile in Thailand. Internet activism, to the extent it exists, is domi- nated by second-generation overseas Lao who indicate little desire to return to a country they technically never left. Additionally weakening the Lao state is the absence of skillful or charis- matic leaders. Kaysone Phomvihane’s leadership resulted more from his con- trol of the LPRP and from repression than from his capacity to gain the respect and approbation of the Lao people. Subsequent leaders function more as party managers than as mobilizers of popular sentiment or political will. Political institutions beyond the LPRP are feeble or nonexistent. Whereas Thailand enjoys the symbolic importance of a king to provide overall state legitimacy, Laos has had no parallel institution since 1975. Buddhism is re- ceiving renewed government support, but the institutionalization of the sangha as a political actor is weak compared to the role of the monastic order in Thailand and Myanmar. Moreover, increasing dependency on financial and technical assistance from international aid agencies and wealthy Asian entrepreneurs fosters patronage and corruption—phenomena of state weak- ness, not strength. There is no semblance of democracy in Laos, nor has there ever been. The country’s communist leadership has not instituted reforms permitting a rep- resentative system or civil liberties. It can be classified as a politically closed regime. Testimony to the Lao people’s view that their government is not le- gitimate is the fact that since it came into power, about one in ten residents have left the country. Indeed, the regime’s insecurity regarding its legitimacy is shown by its refusal to allow any kind of opposition or free elections. Civil society is closely monitored, although a 2008 law put in motion at the behest of the UNDP permits civil society organizations greater autonomy to oper- ate. The government has also experimented with village-level elections. The fall of communist governments in Eastern Europe as the new inter- national era began did not affect the Lao people because they did not have access to information about these changes at the time. Greater exposure to the world since, due to increased tourism, new bridges to Thailand, and 178 LAOS increased contact with China and Vietnam, is a notable change. The Lao government does not censor the Internet, according to Freedom House. Television broadcasts from Thailand are the public’s main external link to the outside world. Nevertheless, the dearth of education in the country in- hibits opportunities for a civic consciousness to develop. The country’s first university was finally opened in 1996. Soochow University of China an- nounced in 2012 plans to establish a branch campus in Vientiane. Political liberalization, let alone democratization, is a distant prospect for Laos. Strong economic growth since 2000 is creating a fledgling urban mid- dle class, but those benefiting most are those closest to the regime and least likely to pressure it to reform. Laos’ LPRP rulers maintain a monolithic hold on political power and face no overt political opposition.15 With regime change an unlikely prospect, greater political transformation depends on a generational shift in leadership. E CONOMY AND D EVELOPMENT Laos is one of the world’s poorest countries. With a gross national income per capita of $1,130, and a poverty rate of nearly 26 percent, the standard of living is low. In Laos, only 20 percent of births are attended by a skilled pro- fessional compared to 99 percent in neighboring Thailand and 88 percent in neighboring Vietnam. About 80 percent of the labor force in Laos remains in agriculture, typically as rice farmers inhibited by poor distribution systems and market coordination. In rural areas, less than four out of ten residents have access to improved sanitation. The spread of HIV/AIDS is growing rap- idly, and malaria, tuberculosis, and chronic diarrhea are widespread. Although such extreme poverty is not new to Laos, the contrast with eco- nomic standards in the other ASEAN countries is obvious. Over the past decade, Laos has experienced limited progress in reducing the incidence of disease and improving basic living conditions. Yet, in measures of overall development, Laos annually joins Cambodia, Myanmar, and Timor-Leste among the bottom third of annual world rankings of the Human Develop- ment Index. In terms of economic policy, LPRP leaders realized after only four years of rule that their agricultural and industrial policies were failing to revive the economy. In 1979, therefore, a process of decentralization was begun. By the early 1980s, pragmatic policies were formally set forth at the Third Congress of the LPRP. The government’s control over the economy was loosened; agriculture began decollectivization; and new technology was in- troduced, resulting in larger crop output and self-sufficiency in rice for the first time since the revolution. These reforms were called chin tanakan may (new thinking), Laos’ version of the Soviet Union’s perestroika or Viet- nam’s doi moi.  Economy and Development 179 The most fundamental changes, however, did not begin until 1986 at the Fourth Congress of the LPRP. These changes, called the “New Economic Mechanism,” allowed family farms to completely replace the unpopular agricultural cooperatives. Also, market mechanisms generally replaced cen- tralized planning. In 1988, Kaysone admitted that the party’s policy of put- ting private traders out of business, collectivizing farmers, and nationalizing industry had caused the production and circulation of goods to come to a halt, grievously affecting the people’s livelihood.16 The World Bank had been critical of the government’s policy and cited Laos’ agricultural inefficiency, declining industrial output, dependency on loans from socialist nations (on poor terms), stagnant exports, and huge balance of payment deficits, all of which acted to perpetuate underdevelopment.17 The reforms emphasized grassroots economic units including factories, merchants’ shops, and construction projects.18 Rather than move directly from subsistence to large-scale collective farming, peasant families were en- couraged to join the barter economy, trading their surplus production for commodities. State land was distributed to individual families on a long- term basis, and consideration was given to making such land inheritable.19 The reforms also included a new foreign investment code designed to at- tract outside investment to finance the Lao infrastructure, but the results were initially disappointing. Laos did not have a constitution or a civil code, a fact that frightened off many potential participants. Corruption also dis- couraged foreign investors reluctant to pay “tea money” to officials. An equally important problem was administrative capacity: Laos demonstrated little absorptive capability that would allow follow-through on investment and aid projects. Following its neighbors embroiled in the 1997 Asian eco- nomic crisis, Laos experienced triple-digit inflation and a currency collapse during the late 1990s. Laos’ currency, the kip, fell 87 percent, from 1,080 to over 10,000 per dollar, greater than any other drop in the region. Since 2000, however, Laos’ economy has experienced rapid GDP growth, averaging above 7 percent from 2005 to 2011. Inflation has been moderate, and the kip has stabilized, although Thai baht and U.S. dollars remain in wide use. Foreign investment by Asian companies in textiles, food process- ing, and low-tech assembly is expanding Laos’ once-pathetic industrial sec- tor. Only 6 percent of GDP in 1990, industry now accounts for nearly 30 percent of economic activity. Drawing from financial and technical support from South Korea and Thailand, Laos opened a stock exchange in 2011. Tourism, another recent arrival to the struggling Lao economy, now gen- erates over $130 million per year with over a million annual tourist ar- rivals.20 Laos’ former royal capital of Luang Prabang, nestled along the Mekong River in the country’s northern mountains, was declared a UN- ESCO World Heritage Site in 1995. Tourism, combined with international 180 LAOS aid, creates strong incentives for the Lao government to keep the country open. Contrasting with Burma’s military junta, the LPRP-led Laos depends mightily on international aid in its growth strategy. Though amounts are not publicly disclosed by the government, most esti- mates put foreign aid at about 40 percent of Laos’ GDP. Since 1989, when the United States granted its first assistance to Laos since the communist takeover, by supporting a $1 million antinarcotics project, international aid to Laos has gradually expanded to a diverse array of intergovernmental, bi- lateral, and nongovernmental sources. In addition to rural development, communications, and community health projects, the major focus of foreign assistance is on overcoming Laos’ unfortunate landlocked geography. Thus, the construction of trans-Mekong bridges and hydroelectric dams gains much attention. In 1994, Australia financed the construction of a bridge to Thailand near Vientiane, the first along the six hundred miles of river that form much of the Thai border. A second bridge to Thailand, in southern Laos, opened in 2006 and was financed by Japan. A third link across the Mekong is planned to connect northern Thailand and Laos with overland routes to Kunming, China, and plans for a fourth bridge—to Burma—exist. An on-again, off- again proposal for a high-speed train to link Laos (and the rest of Southeast Asia) with Yunnan Province, China, is reportedly back on track. Both coun- tries view the project as critical to their future. The new bridges, along with improved land routes to Vietnam, function as globalization lifelines to landlocked Laos. Thai food processing and manufacturing companies, for example, are busily relocating factories to Laos due to the improved infra- structure. Mining, a transport-intensive industry, is also experiencing new private investment from Australian companies, much to the dismay of environmentalists. Through assistance from the World Bank and the Asian Development Bank, the Lao government now pursues an economic growth strategy built on massive hydroelectric projects, aimed to feed the insatiable power grids of Thailand, China, and Vietnam. Twenty-five-year purchase agreements tied to the projects were a welcome arrival to Laos’ cash-strapped government. Controversy surrounding resettlement of displaced villagers, environmental destruction, and the distribution of benefits tied to hydropower draws serious international attention. The current construction of the $1.3 billion, 1,070- megawatt Nam Theun 2 Dam, for example, will displace 100,000 people, or nearly one in sixty Lao citizens. At least ten other hydropower dams are in the construction or planning stage. Rumors abound that the government’s goal is to construct seventy total dams. In 2012, somewhat remarkably, the govern- ment suspended plans to build the Xayaburi hydroelectric project on the Mekong after strident complaints from downstream neighbors.21  Foreign Relations 181 At current growth rates, Laos could graduate from LDC status by 2020. This achievement would meet a joint Lao government–UNDP goal. Notwith- standing income gains, poverty reduction faces significant challenges. Eight in ten Lao residents are still in rural areas far removed from Vientiane’s fledg- ling factories and Luang Prabang’s tourist trade. They remain even more dis- tant from export revenues from mining and hydropower that are absorbed by government accounts. Economic opportunity for most rural and upland Lao remains sorely limited. F OREIGN R ELATIONS As a landlocked nation, Laos has always had to rely on its neighbors for secu- rity. Traditionally, Thailand, China, and Vietnam have had the greatest im- pact on Lao political affairs because these nations share long borders with Laos and control its access to the oceans. After World War II, however, the United States became the paramount power, with almost total control over every aspect of Lao political and economic life. Until 1975, the United States played the leading institutional role in Laos. By dominating the policies of the Vientiane administrations and financing the Lao military, the United States became the patron and the Lao govern- ment became a client of U.S. interests. To secure the continuation in power of pro-U.S. forces, the United States engaged in a secret war in Laos in the 1960s, which cost $2 billion annually. Covert operations and massive bomb- ing raids over Laos were designed to strengthen the anticommunist govern- ment in Vientiane, demolish the Pathet Lao infrastructure, and interdict soldiers from North Vietnam. In the long run, however, none of these goals were achieved. After 1975, the United States no longer had influence over the Lao govern- ment, and CIA-supported allies such as the Hmong were left to defend them- selves. Not until 1987 did relations with the United States change, when the two governments signed agreements for crop substitution programs. Laos had agreed to make a “maximum effort” to stop opium trafficking, and in return, the United States removed Laos from its “decertification list” and reopened its aid program. The irony of these events was the previous tacit U.S. support of upland drug running as a means for upland groups to finance their war efforts. A major source of tension between the United States and Laos concerned some five hundred U.S. troops from the Vietnam War classified as missing in action in Laos. The Lao government was bitter about U.S. demands to conduct excavations because it offered no compensation for the thousands of Lao continuing to die every year from miniature land mine bomblets (called “bombies”), full-size land mines, and other unexploded ordnance (UXO) still scattered throughout the Lao countryside. The lasting presence 182 LAOS of UXO, the legacy of 580,000 U.S. bombing missions, continues to hinder rural development, rendering thousands of acres of arable land too danger- ous to use. In 2012, U.S. Secretary of State Hillary Clinton became the highest-rank- ing U.S. official to visit Laos since Secretary of State John Foster Dulles in 1955. Secretary Clinton visited an artificial limb center and met with UXO victims, but the United States has yet to sign the International Convention on Cluster Bombs. The visit, ostensibly to note the scheduled 2013 entry of Laos into the WTO, was viewed as yet another signal to China that it will not be the only superpower active in the region going forward. Until recently, Vietnam was the country with the greatest influence on Laos’ foreign and domestic policies. In 1975, Vietnam placed approximately 50,000 troops in the country. Although there was fear in the 1980s that Laos and Cambodia would be assimilated into a greater Indochina federation un- der Vietnamese dominance, such a confederation never occurred. All Viet- namese troops were withdrawn by 1990, and Laos began to assert a more independent policy by strengthening its relations with Thailand, ASEAN, and China. Laos’ relations with Thailand have been tense since the Pathet Lao took power, because the Thais viewed Laos as a base of support for insurgency and because the hundreds of thousands of Lao (and Cambodian) refugees who have crossed into Thailand are viewed as an economic burden. In 1987– 1988, Laos and Thailand fought a bloody three-month war over a disputed border area. Later, as relations warmed, Thai businesspeople took advantage of the economic reforms in Laos to set up businesses, and border towns be- came market centers for Thailand. Thai companies are primary investors in the growing sectors of Laos’ new economy. Improved relations have not resolved the centuries-old problem of a strong Thailand versus a weak Laos. As reform began, sentiment from Laos emerged that Thailand, having failed to destroy Laos with its military power, was employing a new domination strategy: attacking Laos with economic power. Although the Lao government later distanced itself from this view, many Lao continued to fear that Thailand—with more than ten times the population of Laos and a history of aggression against its smaller neighbor— might once again intervene. Since the country joined ASEAN, with its strong principle of noninterference, many such fears in Laos have abated in the past decade. In the new international era, no longer able to rely on Soviet aid, Laos has moved to improve relations with China, which remains an important trade ally and a major supplier of weaponry. Since 1990, China has invested over $1 billion in Laos, and two-way trade has risen rapidly. More important to China, however, are needed overland links through Laos to Thailand and its  Notes 183 growing markets. In the Golden Triangle region, increased river trade on the Mekong has created greater incentives for improved overland highways and train routes linking China and Thailand via Laos. With support from the Asian Development Bank and the six countries of the Greater Mekong Sub- region, a project to complete a 1,800-kilometer (1,110-mile) international road from Kunming, China, to Bangkok, Thailand, was recently launched. Vientiane’s government hosted the third Greater Mekong Subregion meet- ing in 2008. After a fifteen-year process, Laos was formally offered WTO membership in late 2012. Classified as a least developed country, Laos’ ascension to the global trading body followed special guidelines. The process required thirty- seven new laws, over fifty decrees, and nine new bilateral treaties before it could qualify. Gaining WTO membership is far more than a symbolic event because it creates easier access to export markets for the landlocked country. Aside from newly independent Timor-Leste, all other Southeast Asian coun- tries were already WTO members when Laos was accepted. C ONCLUSION Laos is the “forgotten country” of Southeast Asia because it is small and is no longer strategically important to the world’s major powers. Its total popula- tion is far smaller than that of the city of Bangkok. Laos’ leadership is un- known to the world, and its military capacity is practically nonexistent. In contrast to Thailand and Vietnam, Laos has changed little over the past sev- eral decades. Though the current mini–economic boom is altering Vientiane, and tourists now dot the streets of Luang Prabang, development in most of the country’s towns and hill areas has remained largely static. Meeting its stated goal to exit LDC status by 2020 would be a major achievement for Laos. Such a feat, however, will require China-like growth rates and develop- ment efforts that reach Laos’ diverse and largely rural populace. N OTES 1. The Plain of Jars is a common name for the Xiangkhoang Plateau, where in certain areas hundreds of thick, three-meter-tall stone jars lie strewn across the plain. With the jars dating back to 500 BCE, their source and purpose remains a subject of Lao legend and of considerable archaeological debate. 2. Takai Yasuhiro and Thanongsone Sibounheuang, “Conflict between Water Buffalo and Market-Oriented Agriculture: A Case Study from Northern Laos,” Southeast Asian Studies 47, no. 4 (March 2010): 452. 3. W. Randall Ireson and Carol J. Ireson, “Laos,” in Coming to Terms: Indochina, the United States, and the War, ed. Douglas Allen and Ngo Vinh Long (Boulder, CO: West- view Press, 1991), 66. 4. Ibid.