PDR will commemorate the 25th Anniversary of its founding. The year 1986, when the government reoriented its economic development strategy from “centrally planned to a market based economy,” was, he said, the turning point in its efforts to achieve national reconstruction and the eradication of poverty.
Since then, and especially in the first half of the 1990s, several important gains were made. The road linking north and south was constructed; the airports in Vientiane and Louang Prabang were upgraded to international standard; two major bridges crossing the Mekong River were built, and construction of a third is about to begin. Altogether, Mr. Srithirath said, this transportation network will transform Laos from a “landlocked into a land-linked country.”
Over the same 25 years, the Lao PDR has constructed a number of hydropower stations. With foreign investors from France, Thailand, and Italy, and with the World Bank as guarantor, the government will soon begin construction of Nam Theun II, the largest station to date. In agriculture, Laos’s outstanding achievement occurred this year when the nation became self-sufficient in rice production.
Despite these gains, the Minister spoke candidly of the adverse effects of the region’s financial crisis on Laos’ fragile economy. Foreign investment, mainly from Laos’ principal trading partner, Thailand, dropped precipitously, leading to drastic increases in both inflation and the trade deficit, and a severely depreciated currency. The government moved to reduce import consumption and increase domestic production through encouraging investment in agriculture. Consequently, inflation was lowered from 120% in 1997 to 10% in August 2000, and the exchange rate remains stable.
Meanwhile, Laos, which prides itself on maintaining its “tranquility” in the wake of a devastating war, has recently faced troubles of a different order. Several bomb explosions in Vientiane this summer seemed aimed at shattering the peaceful prospects of “Visit Laos Year,” a year-long tourism promotion in which the government had set great store. In an armed raid on a customs post in southern Laos involving some 30 to 60 men, six raiders were killed; the survivors fled back to Thailand where 28 were arrested, including both Lao and Thai nationals. Mr. Srithirath referred in a general way to these “unprecedented mishaps,” whose importance, he suggested, was “exaggerated” in the foreign media.
Addressing US-Lao relations, the Minister reported mixed progress. Like Vietnam Laos has shown its goodwill by cooperating with the U.S. in the search for American MIAs, with the result that 142 remains have been identified and repatriated to the United States. Lao-US cooperation in the control of opium production and trafficking has expanded; and Mr. Srithirath noted that the Drug Enforcement Administration has established a Permanent Office in Vientiane.
The American business community, which has invested $1.5 billion in Laos (making it the second largest investor after Thailand), was thanked for the “tangible contribution” it has made to Laos’s economic development. But the US government, which initialed a trade agreement in mid-1997, and has taken no further steps toward normalizing trade relations, was chided for slowing down bilateral relations. Symbolic of this “uneven interaction”
“I am pleased to inform you that the Lao PDR will host the 10th Conference of the Forum on Cambodia, Laos and Vietnam in mid-2001 in Vientiane. The objective of the Forum will certainly focus on the issue of development and poverty eradication. In cooperation with the Fund for Reconciliation and Development, we have started the preparatory process to make this conference a successful event.”
—HE Soubanh Srithirath, Minister to the Office of the President
