Background Notes: Laos
PA/PC
Source: Office of Public Communication, Bureau of Public
Affairs
Date: Mar 28, 19913/28/91
Category: Country Data
Region: Southeast Asia
Country: Laos
Subject: Military Affairs, Cultural Exchange, Travel,
History, International Organizations,
Trade/Economics
[TEXT]
Official Name: Lao People's Democratic Republic
PROFILE
People
Nationality: Noun and adjective-Lao (sing. and pl.). Population: 4
million (1988). Annual growth rate: 2.6%. Population Density:
16/sq. km. Ethnic groups: Lao 50%; Phoutheung (Khan) 15%; tribal
Thai 20%; Hmong, Yao, and other 15%. Religions: Principally
Buddhism, with animism predominant among tribal groups.
Languages: Lao (official), French. Education: Literacy-45%. Health:
Infant mortality rate-110/1,000. Life expectancy-48 years. Work
force (1.6 million): Agriculture-85%; Industry-6%.
Geography
Area: 236,804 sq. km. (91,430 sq. mi.); smaller than Oregon.
Capital-Vientiane (pop. est. 155,000); other principal cities-
Savannakhet, Luang Prabang, Pakse, Thakhek. Terrain: Rugged
mountains, plateaus. Climate: tropical monsoon.
Government
Type: Communist.
Branches: Executive-president (head of state); chairman, council of
ministers (prime minister and head of government); 84-member
Cabinet (including vice ministers). Legislative-Supreme People's
Assembly. Judicial-mixture of regular and "people's courts," the
latter for security cases. Political parties: Lao People's
Revolutionary Party (only legal party). Leaders: Kaysone Phomvihan,
prime minister and party secretary general (since December 1975);
Phoumi Vongvichit, acting president (since October 1986).
Administrative subdivisions: 17 provinces.
Legal system: based on civil law system.
Central government budget (1989 est.): Revenue-$81 million;
expenditures-$187 million, including capital expenditures of $88
million.
Flag: A red band at the top and bottom with a larger blue band
between them; large white circle is centered.
Major holidays: National Day (proclamation of the Lao People's
Democratic Republic), December 2; Independence Day (from France),
July 19.
Economy
GDP (1989 est.): $650 million; Per capita income: $162 (1989);
Real growth rate: 10.7% (1989). Natural resources: tin, timber,
gypsum, hydroelectric power.
Agriculture (62% of GDP): Products-rice, corn, tobacco, coffee,
cotton.
Industry: (16% of GDP) Types-tin/gypsum mining, lumber, textiles,
construction. Industrial growth: 26% (1989). Merchandise Trade:
Exports- $58 million (1989): chiefly hydroelectric power and
timber; also coffee and tin. Major markets-Thailand, Eastern
Europe, USSR, Vietnam, Malaysia. Imports-$171 million (1989):
chiefly foodstuffs, petroleum, machinery, manufactured goods.
Major suppliers-Thailand, USSR, France, Japan, Vietnam.
Foreign debt: $944 million (end of 1989).
Inflation rate: 22% (1990 est.).
Official exchange rate (Jan. 1991): 700 kip=US $1.
Fiscal year: July 1-June 30.
Membership in International Organizations
UN and some of its specialized and related agencies, including the
World Bank, International Monetary Fund, FAO, GATT (observer),
ICAO, IDA, IFAD, ILO, ITU, UNCTAD, UNESCO, UPU, WHO, WMO; Council
for Mutual Economic Assistance [observer], Nonaligned Movement,
Group of 77, Asian Development Bank, Colombo Plan, Economic and
Social Commission for Asia and the Pacific, Inter-Parliamentary
Union, Interim Mekong Committee, World Federation of Trade Unions.
PEOPLE
Laos' population is estimated at about 4 million, spread
unevenly across the country. Most people live in valleys of the
Mekong and its tributaries. Vientiane, the capital and largest city,
has about 155,000 residents.
Just under half the people are ethnic Lao, the principal
lowland inhabitants and politically and culturally dominant group.
The Lao are descendent from the Thai people who migrated
southward from China in the 13th century. Mountain tribes of Sino-
Tibetan (Hmong, Yao, Aka, and Lahu) and Thai ethno-linguistic
heritage are found in northern Laos. In the central and southern
mountains, Mon-Khmer tribes predominate. Some Vietnamese and
Chinese minorities remain, particularly in the towns, but most have
left since 1975.
The predominant religion is Theravada Buddhism. Animism is
common particularly among the mountain tribes. Buddhism and
spirit worship coexist easily. Most Christians (primarily Roman
Catholic) have left since 1975.
The official and dominant language is Lao, a tonal language of
the Thai linguistic group. French, once common in government and
commerce, has declined with the departure of many former
government officials.
HISTORY
The first recorded history of the Lao begins with King Fa
Ngum, by legend the 23rd successor of Khoun Lo, who first united
Laos in 1353. He established his capital at Luang Prabang and
ruled a kingdom called Lan Xang (literally, "million elephants") that
covered much of present-day Thailand and Laos. He also established
Buddhism as the state religion.
In the 16th century, Lan Xang entered a period of decline
caused by dynastic struggles and conflicts with Burma, Siam (now
Thailand), Vietnam, and the Khmer Kingdom. By the 18th century,
the Siamese and Vietnamese kingdoms were competing for control
of Laos.
In the 19th century, the Siamese dominated much of what is
now Laos and divided it into principalities centered on Luang
Prabang, Vientiane, and Champassak. Late in the century, they were
supplanted by the French, who already controlled present-day
Vietnam. In 1899, France established protectorates and direct rule
over all of the principalities, and Laos became part of French
Indochina. The Franco-Siamese treaty of 1907 defined the present
Lao boundary with Thailand.
During World War II, the Japanese occupied French Indochina
and extended their control over Laos. They induced King Sisavang
Vong of Luang Prabang to declare his independence from France in
1945, just before Japan's surrender. In September 1945, Vientiane
and Champassak united with Luang Prabang to form the new Kingdom
of Laos. The king was overthrown shortly afterward by the Free Lao
(Lao Issara) anti-French government, but in April 1946 he was
enthroned as a constitutional monarch after accepting the Lao
Issara constitution. French troops reoccupied Vientiane and Luang
Prabang in May and, in August 1946, recognized Lao autonomy after
elections to a constituent assembly. A new constitution took effect
in 1947.
France formally recognized the independence of Laos within
the French Union on July 19, 1949, and Laos remained a member of
the French Union until 1953. From 1954 until 1957, pro-Western
governments held power. The first coalition government, the
Government of National Union, led by Souvanna Phouma, was formed
in 1957, but it collapsed in 1958 with the imprisonment of Prince
Soupha-nouvong and other LPF leaders by the government. A pro-
Western regime took over the Royal Lao Government. The LPF
insurgency resumed after 1959, when Souphanouvong and other
leaders escaped from prison.
In 1960, Kong Le, a paratroop captain, seized Vientiane in a
coup and demanded formation of a neutralist government to end the
fighting. Kong Le and the neutralist government, again under
Souvanna Phouma, were driven from Vientiane later in the year by
rightist forces under Gen. Phoumi Nosovan and then formed an
alliance with the LPF. By early 1961, the LPF, with North
Vietnamese military support, threatened to take over the entire
country. US military advisers and supplies were sent to aid the
Royal Army.
A 14-country conference convened in Geneva to address the
issue of Laos reached an agreement in 1962 that provided
international guarantees for the independence and neutrality of
Laos. But the LPF ceased cooperating with the government in 1964,
and fighting intensified against the neutralists and rightists.
In 1972, the Lao communists publicly proclaimed the
existence of the Lao People's Revolutionary Party (LPRP). A new
coalition, with Communist participation, and a cease-fire were
arranged in 1973, but the political struggle between the
communists, neutralists, and rightists continued. The collapse of
Saigon and Phnom Penh in April 1975 hastened the decline of the
coalition. On December 2, 1975, the monarchy was abolished and
the communist Lao People's Democratic Republic (LPDR) was
established.
The new government opted for socialism, with centralized
economic decision-making and broad security measures, including
the control of media and the arrest and incarceration of thousands
of members of the previous government and military in remote
prison camps called "re-education camps." The government, in
cooperation with Vietnamese forces in Laos, also launched a
military campaign intended to control dissidents, notably Hmong
tribespeople who had long resisted Vietnamese and Lao communists
from their mountain redoubts.
This military campaign, along with deteriorating economic
conditions and government attempts to enforce political control,
prompted an exodus of lowland Lao and Hmong tribespeople in the
early years of LPDR rule. About 10% of the Lao population sought
refugee status after 1975. Many have since been resettled in third
countries, including 185,000 who have come to the United States.
An estimated 65,000 refugees remain in Thailand, though 7,000
returned voluntarily to Laos in recent years.
In the late 1980s, the government closed most re-education
camps and released most political prisoners, though reports
indicate that at least 34 high officials from the former government
remain in custody.
GOVERNMENT
The only legal political party is the communist LPRP. The
head of state is President Souphanouvong. Since his stroke in late
1986, most of his duties have been taken over by acting president
Phoumi Vongvichit. Real power, however, rests with Kaysone
Phomvihan, chairman of the council of ministers and LPRP secretary
general.
The Lao national legislature, the Supreme People's Assembly
(SPA), adopted new election laws in 1988, and the first national
elections under the current government took place in March 1989
(local elections were held in 1988). The newly elected SPA set out
to draft a constitution, which was finished in mid-1990 and is
expected to be approved in 1991. The constitution calls for a strong
legislature elected by secret ballot, but most political power
continues to rest with the party-dominated council of ministers.
ECONOMY
Laos is a poor, landlocked country with a real per capita GDP
of less than $170, a grossly inadequate economic infra-structure,
and a largely uneducated workforce. Agriculture, mostly
subsistence rice farming, dominates the economy, employing 85% of
the population and producing 62% of the national income. Domestic
savings are low, so Laos depends almost entirely on foreign aid and
concessional loans for investment. Nevertheless, Laos has plenty of
arable land, a favorable land-to-labor ratio, tremendous hydro-
electric potential, and large amounts of minerals, including tin,
gold, and probably petroleum.
When the current government came to power in 1975, it
imposed a harsh, Soviet-style economic system, replacing the
private sector with state enterprises and cooperatives,
centralizing investment, production, trade, and pricing, and creating
barriers to internal and foreign trade.
Lao authorities began to realize as early as 1979 that their
economic policies were inappropriate, but not until 1985, with the
introduction of the "new economic mechanism" (NEM), did they
initiate major reforms. Initially timid, the NEM soon was expanded
to include a range of reforms that changed the structure of the Lao
economy. Free market prices replaced government-set prices.
Farmers were allowed to own land and sell crops at market prices.
State firms were granted increased decision-making authority but
lost most of their subsidies and pricing advantages. The
government set the exchange rate at market levels, lifted trade
barriers, replaced import quotas with tariffs, and stimulated
private sector firms by giving them direct access to imports and
credit.
These reforms have helped boost exports, reduce inflation,
encourage business, and increase the availability of goods.
However, the economy is dominated by an unproductive agricultural
sector that operates largely outside the money economy, which the
public sector continues to dominate.
Recognizing these problems, Lao authorities in mid-1989
signed an agreement with the World Bank and the International
Monetary Fund committing themselves to extending and deepening
reforms. They agreed to expand fiscal and monetary reform,
promote private enterprise and foreign investment, privatize or
close state firms, and strengthen banking. They also agreed to
maintain a market exchange rate, reduce tariffs, and eliminate
unneeded trade regulations.
In the last 2 years, the Lao have enacted a liberal foreign
investment code, begun to privatize public firms, and expanded
economic ties with the West. They have tried especially hard to
attract foreign investment.
FOREIGN RELATIONS
The Pathet Lao leaders who took over in December 1975
aligned themselves with the Soviet bloc and adopted a hostile
attitude toward the West. Laos has been close to the Soviet Union
and Eastern Europe and is an observer at the Council for Mutual
Economic Assistance, the Soviet-bloc economic organization.
Since 1975, Laos has maintained close ties with Vietnam,
described by the Lao and Vietnamese as a "special relationship" and
formalized in a friendship and cooperation treaty. Laos has
maintained close ties with Cambodia since the 1979 installation of
a Vietnamese-backed regime.
In the last few years, Laos has sought to improve relations
with other countries and to reduce its dependence on Vietnam and
the Soviet bloc. Much of its efforts have focused on Thailand, Laos'
principal means of access to the sea and its primary trading
partner. Less than a year after serious border clashes in 1987, Lao
and Thai leaders signed a communique signaling their intention to
improve relations. Since then, progress has been made on several
fronts, and relations now are better than they have been since 1975.
Laos also has improved relations with China. Although the
two were allies during the Vietnam War, the China-Vietnam
conflict in 1979 led to a sharp deterioration in Sino-Lao relations.
Relations began to improve in the late 1980s, and Prime Minister
Kaysone's October 1989 visit to China resulted in complete
normalization of Sino-Lao relations. Flexibility on the part of both
countries led to agreements on border demarcation trade.
Finally, Laos has begun to reduce its international isolation by
improving relations with other countries, including France,
Australia, and Japan.
US-LAO RELATIONS
US-Lao relations deteriorated in 1975, although diplomatic
relations were not severed. Since that time, the United States has
maintained a small embassy in Laos, and Laos has maintained a
small embassy in Washington, DC, both headed by charges d'affaires.
Relations were cool during the early years of the government,
but in 1982 both governments agreed to work to improve them. The
United States stressed that progress in accounting for Americans
still missing in Laos from the Vietnam War would be the principal
measure of Lao sincerity in improving relations. More recently,
narcotics control has become another important US concern in Laos,
which is a major producer of opium and marijuana.
In the last few years, progress has been made in both areas.
In February 1985, a Lao-US team conducted the first joint
excavation of a plane crash site, resulting in the identification of
the remains of all 13 missing servicemen. Progress has
accelerated since 1988, with Laos agreeing to expand POW/MIA
activities. The two countries have conducted numerous site surveys
and recovery operations since January 1989.
In 1987, Laos began to cooperate on narcotics, when it
requested assistance in providing viable alternative crops to opium
farmers. Since then, the two countries have signed an agreement on
cooperation and initiated a multimillion dollar crop-substitution
program. Laos also has formed a national committee on narcotics,
participated in US-sponsored narcotics training seminars, and taken
law enforcement actions.
For its part, the United States has supported loans to Laos by
the Asian Development Bank (the United States previously abstained
on such loans), deleted Laos from a list of countries prohibited
from receiving most forms of US assistance, provided emergency
food and medicine shipments, agreed to a major prosthetics
program in Laos, and urged private organizations to provide
humanitarian assistance.
Principal US Officials
Charge d'Affaires-Charles B. Salmon, Jr.
Deputy Chief of Mission-Karl Wycoff
The US Embassy in Laos is on Rue Bartholomie, Vientiane [tel.
2220].
TRAVEL NOTES
Visitors can apply for visas at the Lao Embassy in Washington,
DC Although, in theory, tourist visas are temporarily "suspended"
except for group travel, in practice individual visa applications
have generally been approved on a case-by-case basis. Business
travel is encouraged. US citizens of Lao origin have been able of
late to obtain visas easily to visit family and have not experienced
any particular difficulty in Laos. Several US journalists have been
able to secure visas within the past year as well. Sponsorship by an
individual or organization in Laos can ease the application process.
Vientiane is served by four international airlines: Thai
Airways, Air Vietnam, Lao Aviation, and Aeroflot (USSR). Flights
connect Vientiane to Bangkok, Rangoon, Hanoi, and (via several
stops) Moscow. Bangkok is the nearest city served by a US carrier.
Principal Government Officials
Chairman, Council of Ministers-Kaysone Phomvihan
Acting President-Phoumi Vongvichit [since October 1986]
Charge d'Affaires in Washington-Linthong Phetsavan
Permanent Representative to the United Nations-Saly Khamsy
Laos maintains an embassy in the United States at 2222 S St.,
NW, Washington, DC 20009 [tel. 202-332-6416].
Published by the United States Department of State -- Bureau of
Public Affairs -- Office of Public Communication -- Washington,
DC --Series Editor: Peter Knecht--Department of State Publication
Background Notes Series. This material is in the public domain and
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