Wayzata World Factbook 1994/World Factbook - 1994 Edition - Wayzata Technology (1994).iso/pc/text/txtfiles/laos.bkg

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#CARD:Laos:Background Notes
US DEPARTMENT OF STATE BACKGROUND NOTES:  LAOS

March 1991
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 establi-shed 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 consti-tution.  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
enter-prises 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 agree-ments 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 service-men.  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.

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. [phone]].

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].

 Published by the United States Department of State --  Bureau of Public
Affairs  -- Office of  Public Communication --  Washington, DC, March
1991 -- Editor: Jim Pinkelman.
 Department of State Publication 8874--Background Notes Series  -- This
material is in the Public domain and may  be reprinted without
permission; citation of this source is appreciated.  For sale by the
Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C.  20402.(###)


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