A Short History of Southeast Asia: Laos

Timeline

1991: Khamtay Siphandon appointed Prime Minister

1986: Prince Soupanouvong retires

1975: The King abdicates and Prince Soupanouvong becomes President and Kaysone Phomvihan Prime Minister of Lao People's Democratic Republic

1964-75: US bombing of Ho Chi Minh trail and "secret" war against Pathet Lao forces

1954-64: After the Geneva Conference on Indochina attempts at "neutralisation" largely unsuccessful

1946: The French return and introduce a number of concessions in the face of conflict in Vietnam and rising hostility from within Lao

1945: Independence declared at the urging of Japan

1893: Franco-Siamese treaty transfers all Lao territory to east of the Mekong River to the French

18th century: Thailand, Myanmar and Vietnam exert control over various parts of the country

1353: Kingdom of Lan Xang with capital at Luang Prabang

7th-13th centuries: Tai migration south from western and northern China

Introduction

The Lao People’s Democratic Republic or Lao PDR (previously Laos) is about 237,000 sq. km. in land area but has a relatively small population of about 4.4 million in 1994. It is a land-locked country, sharing borders with Thailand, Myanmar, China, Vietnam and Cambodia. Much of it is mountainous, and only about 5 per cent of the land is under continuous cultivation. Primary or secondary jungle (the latter resulting from transient slash-and-burn farming) covers 75 per cent of the land area.

As a nation Lao is a semi-artificial creation of the colonial era. The French devised its borders, cutting through many diverse ethno-linguistic groups. The preponderant Lao lowlanders brought to the emerging nation a long history of bitter division amongst themselves. Lao, as a neighbour of Vietnam, would also be wracked by ideological division and war for thirty years after World War II.

In 1975 the area of Lao was united under one indigenous government for the first time in almost 300 years. The doctrinaire socialism of this government led, however, to economic stagnation and the flight of almost 10 per cent of the country’s population across the Mekong river into Thailand. Today the government pursues ‘market socialism’, welcoming domestic and foreign private enterprise and aid from the capitalist world. But the country’s geography, ethnic complexity and turbulent history mean that Laos is starting from far behind most Southeast Asian countries in nation-building and economic development.

The creation of Lao, and its early history

The borders of the modern state of Lao were established by the French colonial government in the late 19th and early 20th centuries. They were based primarily on French strategic and administrative considerations, and only took notice of the region’s human geography and traditional political relationships where it suited the French to do so. They sliced through ethnic groupings and historic socio-political ties, arbitrarily determining the future population of the country.

The population of the newly defined territory was relatively sparse – about 819,000 people were counted in 1921 – but nevertheless ethnically and culturally complex. A little over half the population were of Tai ethno-linguistic origin, one result of the great migration which scholars believe brought Tai peoples out of western China into mainland Southeast Asia between the 7th and 13th centuries A.D., and ultimately located Tai stock not only in modern Thailand but also in eastern Myanmar, in Lao and in northwest Vietnam. People of Tai stock in Lao included both the lowland-dwelling Lao and a number of upland-dwelling groups of the northern provinces, such as the Lu, Tai Neua and Black, Red and White Tai (so named for the principal colours in their womens’ traditional costumes). Today all these people are grouped as lowlander Lao or ‘Lao Loum’.

The lowlander Lao became the dominant force in the region, politically, culturally and economically, but their political structures were not strongly integrated. In the mountainous terrain rivalries of family and clan flourished. Four series of rapids on the Mekong River, with lengthy stretches of water between them, focussed Lao society around three distinct centres, from north to south Luang Prabang, Vientiane (Vieng Chan) and Champassak. The Tai peoples of the uplands were even less politically integrated, although the villages of each group were organised into small principalities (muong) presided over by leaders of dominant clans.

The second most substantial ethnolinguistic grouping were upland-dwellers of Mon-Khmer origin, presumably descendants of the peoples who had settled the region before Tai immigration. The Tai-speakers referred to them disparagingly as ‘Kha’ (slaves); today they are grouped as upland Lao or ‘Lao Theung’. Both terms encompass many self-consciously distinct communities with their own names for themselves. Political organisation beyond village level was rare in these communities, but occasionally they could unite, under particularly charismatic chieftains, to oppose lowlander exploitation.

Amongst the smaller ethno-linguistic groupings the most notable by the time of French boundary-drawing were peoples with languages of Tibeto–Burman origin, today grouped as ‘Lao Soung’ and including the Hmong and Yao, or Mon. (The Hmong resented the lowlander term for them, Meo, which means ‘savage’.) These peoples began to migrate into the area as recently as the late 18th or early 19th centuries and settled on upper mountain slopes where amongst other crops they grew the opium poppy. The Hmong shared a myth of a future Hmong kingdom, but for most practical purposes political organisation was rare beyond the level of village chief.

Human settlement in the region is known to date back many centuries B.C. The most famous evidence of the region’s pre-history consists of the huge stone mortuary jars found on the north-central Xieng Khouang plateau, which have given the area the name ‘Plain of Jars’. Little is known about the society which created the jars, which date from the last centuries B.C. into the early Christian era. The known history of the region follows from the Tai migrations mentioned above. In the 13th century Tai peoples constructed their first states, drawing together hitherto tribal communities under rulers claiming quasi-divine authority and kingly status. Examples of such states were Chiang Mai and Sukhotai (both located in what is now Thailand) and Luang Prabang.

The exact origins of Luang Prabang are shrouded in myth but there in 1316 a royal prince, Fa Ngum, was born. He was brought up in the royal court of the great kingdom of Angkor, which then claimed an empire extending over much of modern Thailand, central and southern Lao, Cambodia and southern Vietnam. Fa Ngum married a Khmer princess and became a devout Theravada Buddhist. With Khmer forces he brought under his control large areas to Angkor’s north and in 1353 established the kingdom of Lan Xang (‘a million elephants’) with his capital at Luang Prabang.

Initially a tributary of Angkor, Lan Xang became an autonomous kingdom as Angkor declined. For several centuries its power was arguably as significant as the growing Thai state to its west, based on the city of Ayudhya, and the growing Vietnamese state to its east. At its height Lan Xang controlled, at least in loose, tributary fashion, territories considerably more extensive than those of modern Lao, including much of modern Thailand’s north and east and reaching into the south of modern China and the northwest of modern Vietnam.

Lan Xang was a Buddhist kingdom and for long periods a renowned centre of Buddhist scholarship. However its Buddhist practices took on a distinctively Lao identity as the religion assimilated the traditional animist beliefs and rituals of the region. Buddhism also acted as a conduit for ideas, Indian in origin, of society as divinely-ordained hierarchy. Lan Xang’s polity came broadly to resemble those of its Theravada Buddhist neighbours, the Burmese, Thai and Cambodian states. The king and aristocracy deserved reverence, taxes and services from their subjects because of their superior ‘merit’ and pious support of Buddhism. Such politico-religious social integration extended only to the lowlander Lao, however. The ‘Kha’ (uplanders) mostly resisted Buddhism, clinging to their diverse animist beliefs and local independence. And even among the lowlanders Lan Xang’s rugged geography and necessarily decentralised administration by regional overlords militated against a lastingly strong state.

Nevertheless Lan Xang weathered internal rivalries, wars with the Thais and Vietnamese, and a generation of Burmese overlordship in the late 16th century. In the 17th century, now with Vientiane as its capital, Lan Xang reached its height under King Souligna Vongsa, who came to the throne in 1637 after defeating four rival claimants and reigned for a remarkable 57 years. He negotiated good relations with the neighbouring states, and within the kingdom gained a reputation for firm, just rule. The first European visitors to Vientiane reported on the city’s prosperity and imposing religious buildings.

But, in an act worthy of epic tragedy, Souligna Vongsa refused to intervene when his only son seduced the wife of a senior court official and, under the prevailing law on such matters, was sentenced to death. Souligna Vongsa died in 1694 without a direct heir, and the subsequent rivalries for the throne, exploited by the Vietnamese and Thais, led to the kingdom’s irrevocable break-up.

In the early 18th century the cities of Luang Prabang and Vientiane became the capitals of antagonistic states, the latter under Vietnamese patronage. In the south Champassak fell under Thai patronage. In the mid-18th century the Burmese became predatory again, reducing Luang Prabang to subjection and menacing Vientiane. Rather than supporting one another the mutually hostile Lao states encouraged these outside powers to subdue their Lao rivals. The unhappy century closed with Vientiane under Thai overlordship, although Vientiane independently attacked and sacked Luang Prabang in 1791.

In 1805 the Lao prince Chao Anou became ruler at Vientiane, and won Thai and also Vietnamese approval to reintegrate the central and southern provinces. In 1826, however, Chao Anou acted on a rumour (which proved false) that the British were attacking Bangkok. Chao Anou and his forces, eager to join in the humbling of the Thais, almost reached Bangkok before being repelled. Chao Anou fled, ultimately taking shelter from Thai vengeance in Vietnam.

These events opened a decade of devastation for the Vientiane state. In 1828 Thai forces sacked Vientiane and drove many thousands of the population westward into territory under Bangkok control. Vientiane, and Champassak in the south, became minor Thai provinces. Chao Anou was captured by the Thais when he returned to his territory with ineffective Vietnamese backing; he died in Bangkok in 1835, bringing the Vientiane monarchy to an end.

Meanwhile Vietnam was forcefully asserting its claims in the eastern provinces, particularly in Xieng Khouang (the Plain of Jars). The Vietnamese were probably content to take the east while the Thais took the west and south, but in 1833, simultaneously with a Thai–Vietnamese clash in Cambodia, the Thais sent a force against the Vietnamese garrison in Xieng Khouang. The Thais were helped by forces from Luang Prabang, and by a local uprising in Xieng Khouang against the Vietnamese. As with Vientiane the Thais adopted a ‘scorched earth’ policy in Xieng Khouang, deporting westward up to 80 per cent of the population, although some were able to return later. Thai–Vietnamese warfare continued until 1835, and concluded with the Vietnamese dominant in the east, as they had wished, and the Thais dominant in the western and southern provinces. The surviving northerly kingdom of Luang Prabang prudently acknowledged the overlordship of both its neighbours, but for practical purposes it too was within the Thai orbit.

French conquest and rule, to 1940

The French takeover of Cambodia and Vietnam between the 1860s and 1885 led to keen French interest in the Lao territories for several reasons. They saw the Mekong (wrongly) as a potentially major trade route with China. They also feared Thai interests in the territories, which they believed might be championed (also wrongly as it transpired) by their imperial rival Britain. From the 1870s northern Lao and Vietnam were disturbed by armed bands of renegade Chinese (collectively referred to by the Thai term ‘Ho’) and the French were anxious to pacify these areas. Finally, by 1885 the French controlled the Vietnamese emperor’s claims to overlordship in the Lao territories.

The Thais had been sending armed forces to Luang Prabang and other areas in an attempt to subdue the Ho and confront possible French intervention. But in 1887 they were dramatically outmanoeuvred by the French explorer Auguste Pavie, who rescued the king of Luang Prabang when the Ho attacked and sacked his city. King Un Kham gratefully accepted French protection for his kingdom. Pavie went on to negotiate similar protection for other regional overlords.

In 1893 (with French gunboats menacing Bangkok) Thailand reluctantly signed a Franco-Siamese treaty which transferred to the French all Lao territories east of the Mekong. Further agreements in 1904 and 1907 added to ‘Lao’ the parts of Sayaboury and Champassak provinces west of the Mekong. However for most of its course through historically Lao territory the Mekong had now become an international frontier. The agreements on other borders with British Burma, China and with French-controlled Vietnam similarly conflicted with the historic settlement patterns and movements of Lao and other people of the region.

The French soon came to regard Lao as a quiet backwater, when they realised that it could offer no rapid economic return of any significance. Most people of the region continued as subsistence farmers, the lowlanders growing wet rice and the uplanders pursuing slash-and-burn cultivation. The colony’s most important products became tin, mined by Vietnamese workers, and opium grown by the Hmong and other mountain-dwellers. The tin contributed only a tiny percentage of the total exports of French Indochina (Lao, Vietnam and Cambodia). Opium, on the other hand, became Lao’s single greatest revenue earner when purveyed by a French state monopoly throughout Indochina. An illegal opium trade also flourished with China, despite official French efforts at control.

The French administration of Lao (technically now the protected kingdom of Luang Prabang plus nine Lao provinces) was lightly staffed. Much administration was carried out using traditional authority structures and Vietnamese minor officials. Vietnamese public servants, traders and professionals came to predominate in Lao’s small urban population; Chinese also came to play a significant role in Lao’s trade. Generally the Lao lowlanders accepted the French and other outsiders, but mountain-dwelling groups rose in revolt on several occasions. They were protesting against taxation and corvĂ©e demands possibly imposed inequitably, even corruptly, by officials from the traditionally resented lowlands.

Prior to World War II modernisation in Lao was extremely limited. The telegraph and around 5,000 km of roads (mostly unpaved) eased communications, but 90 per cent of the population remained in subsistence agriculture. Health care and other social services were confined to the towns, and no western-style education was available in Lao beyond primary level (most primary education was conducted in the Buddhist temple schools). The Lao elite went to Vietnam or France to acquire an education, returning to form a small royal and aristocratic upper class, and a fledgling Lao middle class composed of public servants, policemen and soldiers, primary teachers and the like.

World War II and the First Indochina War, 1940–1954

In 1940 the Thais, taking advantage of Japanese pressures on the French, occupied with Japanese support the Lao provinces west of the Mekong. (These would be returned to the French in 1947.) However the French retained administrative control in most of Indochina, under an agreement with the Japanese which allowed the free movement of Japanese forces. Thus most of Lao stayed under French supervision until 9 March 1945, when the Japanese interned all French personnel in Indochina.

The war years before March 1945 nevertheless brought significant change. The French, seeking to buttress Lao popular support, began to stimulate Lao nationalist pride. A ‘national renovation movement’ staged rallies and parades, built schools and other amenities, fostered Lao music, dance and literature, and led to the first Lao newspaper. The first explicitly Lao infantry battalion was formed, under French control, in 1943. As elsewhere in Southeast Asia, therefore, nationalist politicisation was a feature of the war years in Lao, although the Lao movement focussed only on the Lao lowlanders.

After March 1945 the pace quickened. In April the king of Luang Prabang was obliged by the Japanese to repudiate the French and declare Lao ‘independent’. In August, when the Japanese surrendered to the Allies, politicised Lao people were split between those who acquiesced in a French return and those who saw the opportunity to set up a genuinely independent state. The latter formed the Lao Issara (Free Lao) and set up a provisional government.

By now, however, an additional complication for Lao nationalism was taking shape. In August/September 1945 Ho Chi Minh’s communists seized control in northern Vietnam and set up the Democratic Republic of Vietnam (DRV). Some Lao Issara, seeking allies, established ties with the DRV, which eagerly backed the anti-French movement in Lao. The political contenders in Lao – and the entire population – were about to be sucked into the maelstrom created by the advent of communism in the region and by French – and later American – efforts to eliminate or contain it.

The French recaptured Lao by May 1946, and leading Lao Issara figures fled, some to Bangkok and some to link up with the DRV guerrilla forces (the Vietminh) battling the French in Vietnam. In the late 1940s Lao guerrilla groups developed along the mountainous Lao–Vietnam border, aided by Vietminh know-how and supplies. Significantly, these groups won the support of some uplander communities hitherto alienated from the Lao nationalist movement. The uplanders may have been recruited with some cynicism by the Lao and Vietminh – who primarily viewed the uplanders as important for their strategically valuable territory and local knowledge – but trans-communal nationalist cooperation had at last made a start.

Meanwhile the Lao Issara group in Bangkok was disintegrating. The French, anxious to pacify Lao in order to focus on the conflict in Vietnam, made a series of concessions to Lao feelings which undercut the hostility of many Lao Issara towards the restored French presence. In 1946 the French appointed the Luang Prabang monarch as king of all Lao, and also permitted an elected national assembly, leading to a national government. In 1949 they declared Lao ‘independent’, though they retained ultimate control of the kingdom’s armed forces, foreign policy and finances. The concessions were enough, nevertheless, to woo many Lao Issara back under amnesty.

Notable amongst the returnees was the royal Prince Souvanna Phouma, who became Prime Minister following elections in 1951. However his half-brother, Prince Souphanouvong, in an echo of the country’s past history of ruling class dissension, threw in his lot with the Vietminh-backed guerrilla forces. In August 1950 Souphanouvong became Prime Minister of the newly formed Pathet Lao (‘Land of the Lao’) a front organisation open to all Lao patriots though tightly controlled by committed communists. Another key pioneer Pathet Lao figure, as Defence Minister, was the Lao–Viet communist Kaysone Phomvihan, destined to become Lao’s first and long-lasting communist Prime Minister.

By early 1954 Pathet Lao forces controlled large areas of the north and northeast of Lao, including the Plain of Jars and the provincial town of Sam Neua. They had been significantly helped in their advance by major Vietminh incursions into Lao in April 1953 and January 1954. The Pathet Lao was not invited to the Geneva Conference which opened in May 1954, convened by the great powers in the hope of settling the Indochina conflicts, but the Conference recognised Pathet Lao strength and acknowledged its right to administer the territory it held. The Conference called, however, for the integration of the Pathet Lao with the Royal Lao government and armed forces, and for the neutralisation of Lao.

The failure of ‘neutralisation’, 1954–1964

Following the Geneva Conference the French speedily withdrew from Indochina. In Laos the negotiations for a new, integrated national government would prove tortuous and long. The Pathet Lao was determined to enter a coalition only on strong terms, and was wary of growing American influence in Lao. In Vientiane the moderate Souvanna Phouma was swept aside by United States-supported right-wingers, who had gained the upper hand in the National Assembly and Royal Lao armed forces.

Elections in December 1955 led, however, to Souvanna’s return to the prime ministership on a platform of national reconciliation. In August 1956 Souvanna and the Pathet Lao leadership agreed on broad proposals for a ‘government of national union’. Elections for 21 extra assembly seats were finally held in May 1958, with parties aligned with the Pathet Lao acquiring 13. Souphanouvong entered the government as a Senior Economic Minister. Another Pathet Lao leader, Phoumi Vongvichit, also acquired a Ministry.

The arrangements were a dubious recipe for stability. In June 1958 Souvanna was again forced from office by the rightists, and the succeeding government went on to rule by decree. Souphanouvong and the other leftist deputies were arrested, although they later escaped with the aid of their guards and returned to Pathet Lao territory in the east. Pathet Lao troops who had been awaiting integration with the Royal Lao forces were disarmed, but many of them too escaped back to Pathet Lao territory. By July 1959 guerrilla warfare was again in full swing in the north and northeast. United States aid to the Royal Lao forces sharply increased. Simultaneously CIA personnel began to form ‘special forces’ in Lao, attracting support among the Hmong in particular. With CIA assistance Hmong opium output began to find vast new markets in South Vietnam, Thailand and beyond.

The conflict increased in complexity in August 1960, when forces led by a young paratroop captain, Kong Le, seized Vientiane and demanded a restoration of neutrality. Souvanna Phouma agreed to return as Prime Minister, and subsequently reached an agreement with Souphanouvong on behalf of the Pathet Lao. In December 1960, however, Royal Lao troops under rightist command stormed Vientiane. Kong Le, his troops and Souvanna fled to the Pathet Lao-controlled Plain of Jars. The communist world and some non-aligned nations like India now upheld Souvanna as Lao rightful Prime Minister. The United States and the West recognised a new military-controlled Vientiane government, technically under another prince, Boun Oum, as Prime Minister.

Despite American intrigue in Lao up to this point, the incoming United States President in January 1961, John Kennedy, concluded that a neutral Lao was desirable. Neutrality would hopefully exclude DRV forces from using the ‘Ho Chi Minh Trail’, much of which ran through Lao, to reinforce and supply NLF (‘Vietcong’) forces now fighting the regime in South Vietnam. In May 1961 another Geneva Conference called once more for the neutralisation of Lao. In June the three Lao princes, Boun Oum, Souvanna Phouma, and Souphanouvong agreed to a second attempt at coalition government.

The new government came into existence in July 1962 with Souvanna as Prime Minister. The coalition led a tenuous existence, beset by tension, provocation and assassination until mid-1964 when its Pathet Lao component effectively abandoned it, later dismissing it as a ‘United States puppet’. Souvanna held on as Prime Minister, but he and other neutralists were now reduced to irrelevance. Lao was becoming one of the key theatres of war in the sharply escalating conflict in Vietnam.

Lao and the Vietnam conflict, 1964–1975

Secret United States bombing of Pathet Lao areas began in May 1964. By the late 1960s, and into the early 1970s, the bombing was massive, attempting ‘saturation’ destruction of the manifold branches of the Ho Chi Minh Trail. It created an estimated 750,000 refugees in Lao, and nightmarish conditions for Pathet Lao forces, but it never closed the Trail, or eliminated Pathet Lao headquarters and networks. On the ground, the Royal Lao and ‘secret’ forces (and also substantial Thai forces) engaged each year in a ‘dry season’ war with the Pathet Lao. For many years the pattern of territories held by the opposing forces did not alter significantly. By 1972, however, the Pathet Lao was beginning to gain ground, backed by an increasingly optimistic and well-armed DRV.

In Paris the DRV was engaged in serious peace talks with the United States, which would lead to the January 1973 agreements under which the United States withdrew its ground troops from Vietnam. The Pathet Lao, pursuing a policy parallel to that of the DRV, offered in 1972 to talk with the Vientiane government ‘without preconditions’. In February 1973 the two sides reached an ‘Agreement on the Restoration of Peace and Reconciliation in Laos’.

The agreement provided for cessation of hostilities, after which the two sides would administer their respective territories, and for the withdrawal of foreign troops. The United States and Thais withdrew their military personnel, though the DRV continued to use the Ho Chi Minh Trail. Further detailed agreements led to the formation of two bodies on which both the Vientiane government and the Pathet Lao were represented. These were the Provisional Government of National Union, in which Souvanna Phouma became Prime Minister, and a National Political Consultative Council (NPCC), of which Souphanouvong became Chairman.

The NPCC subsequently committed itself to the retention of the monarchy and to generally liberal political and economic principles. Pathet Lao government Ministers also acted moderately, reassuring many Lao people. The Pathet Lao goal remained, however, full takeover of government, and the circumstances seemed to be favouring the achievement of that goal. Rightist morale was sinking as the United States, step by step, wound back its commitments in Indochina. Corruption and self-seeking – which had long been debilitating factors in the Royal Lao government area – intensified as fears grew that the United States aid bonanza was coming to an end.

Even so the Pathet Lao moved cautiously when, in April 1975, communist forces toppled the regimes in Saigon and Phnom Penh. Pathet Lao troops engaged the Hmong ‘secret army’, but in the lowlands the Pathet Lao relied on staging a ‘popular revolution’. In April and May, mass demonstrations against United States properties and Lao rightists led to the wind-back of all American activity other than diplomatic representation, and propelled the flight from Lao of people identified with the former Vientiane government. The flight intensified when the Royal Lao forces were taken over by a pro-Pathet Lao commander in August. In November, following further demonstrations, the King abdicated and Souvanna Phouma stepped down as Prime Minister.

On the 1st and 2nd December 1975 a ‘National Congress of Peoples Representatives’ voted unanimously to establish the Lao People’s Democratic Republic, to be governed by the Lao People’s Revolutionary Party. Prince Souphanouvong became the new republic’s first President (he would retire in 1986). Kaysone Phomvihane became Prime Minister, a position he would retain until 1991, when Khamtay Siphandone succeeded him as Prime Minister.

Lao since 1975

After 1975 the new government imposed doctrinaire socialist policies on Lao. State Trading Organisations replaced private trade, and Lao’s small industries were nationalised. The properties of ‘traitors’ were expropriated. Political and social discourse became rigidly controlled, and perceived opponents of the regime were eliminated or consigned to ‘re-education’ centres. In 1978 cooperativisation of agriculture began. These policies aggravated the conditions created by 30 years of political upheaval and war, the withdrawal of United States aid and an economic blockade imposed by Thailand. The declining economic situation and the political oppression led to the exodus as refugees of as much as 10 per cent of the population. By 1979 Lao had lost the majority of its educated and skilled people.

Cooperativisation – the policy which most directly affected the majority of the peasant population – met with passive but intense opposition. Harvest yields were catastrophically less than hoped for, and in mid-1979 the policy was abruptly dropped. This about-turn heralded a series of measures which would gradually free up the country’s economy. In November 1979 private production was again encouraged, and state enterprises were obliged to include in their goals efficiency, productivity and profit. In 1982 a reorganisation of government left the old guard in supreme control but introduced ‘technocrats’ at vice-ministerial level, decentralised some decision-making, and liberalised foreign trade, private investment and joint state-private enterprise.

These and later changes to the command economy provoked some tensions within the ruling group, but in the late 1980s and early 1990s the collapse of Soviet and European communism, the resulting loss of aid, and the growing economic liberalisation in Vietnam and China, produced decisive moves towards a market economy. However Lao remains a one-party, theoretically socialist, state. Party diktat can over-ride law and institutionalised procedures.

With its small population, lack of infrastructure and land-locked position, Lao is unlikely to shake off quickly its status as one of Southeast Asia’s poorest countries, in spite of its now very liberal policies on foreign investment Subsistence farming is likely to remain the chief user of labour for some time, and the chief means of survival for most Lao people. However Lao does have potential for modest economic growth. Foreign companies are now heavily involved in developing a number of hydro-electric projects, principally to sell power to Thailand. Other areas of potential development are mining, commercial agriculture, tourism and limited areas of manufacturing.

Meanwhile Lao’s infrastructure is improving, with various forms of international assistance. An Australian-built bridge across the Mekong, which linked Lao and Thailand by road in 1994, plus the expansion and upgrading of roads within Lao, mean that it is becoming possible to drive from Singapore to Beijing, via Lao. And yet many Lao see their country’s future as a transport hub, linking northeast Thailand with the Vietnamese port of Da Nang on an east–west axis as well as southern China with Thailand, Malaysia and Singapore on the north-south axis. Some Lao people fear the social and environmental consequences of development in Lao, and economic domination by their powerful neighbours. The government will need to handle development with sensitivity as Lao is drawn inexorably into the dynamic economic currents sweeping through the rest of Southeast Asia.

Copyright © Asean Focus Group Pty Limited. All rights reserved.

About this edition:

This is the complete text of the 2nd edition of the book. Short History of South East AsiaThe first edition of "Focus on Southeast Asia" was published in 1997 and the second edition, which was renamed "A Short History of South East Asia", was published in 1999. With so much change taking place in South East Asia over the last few years we recently decided to update the book and a fifth edition was published by John Wiley and Sons (www.wiley.com) in 2009. The cover set out is of the fifth edition.

The 5th edition of "A Short History of South East Asia" is available to purchase from Amazon, as both an e-book and a paperback, and via its publisher, Wiley.

 

About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top