Currently there are competitions for influences in Laos among big powers like U.S and China with the exception to the Viets who have already had the say in a country's domestic affairs and in the decision-making on Laos' foreign policy ever since the proclamation of LaoPDR.Undeniably, Laos is somewhat strategically important enough to have Thailand, Vietnam, China, and the United States compete for political influence. This is a good sign in extricating itself from poverty initially aiming for the year of 2020. But with priority in a war on terror, sluggish economy and still tangling itself in Iraq and Afghanistan, I doubt Washington's ability to fully resurrect in Southeast Asia. Thailand is facing political turmoil and China is heavily focused on central Asia, Africa and Latin America so the Viets are the only victor in the game. Is Laos going to be the loser in the end? For the rest of the article, please click on the link: http://www.atimes.com/atimes/Southeast_Asia/LC25Ae02.html
Superpower competition for little Laos By Brian McCartan
Geostrategic aims Vientiane appears receptive, if guardedly, to US overtures. Laos' leaders likely see the utility of having the US as a counterbalance to China's growing influence in the country. While many Laos are pleased with the growing links to China and the increased number of goods available and the money to be made from trade, a growing fear of Chinese domination exists. In particular, there is a perception that the growing number of Chinese arriving to work and live in Laos constitutes a sovereign threat that has been accentuated by the government's granting of large-scale, long-term land leases to Chinese companies.
China's policies towards the Mekong are also worrisome considering Laos' main population centers are along the river. Although China claims the situation is the result of a drought in its southwest, some are not convinced and blame Beijing's large-scale dam construction on the upper Mekong. Laos and the MRC have a weak bargaining position when it comes to China, but increased US interest in the form of the Lower Mekong Initiative may provide some muscle to their complaints.
Vietnam, which has long been Laos' main patron and ally, is also keen to see Laos forge better relations with the US as a means of maintaining its own interests in the country as well as blunting China's influence. Chinese largesse has meant Hanoi's once dominant position in Laos has lost ground. Vietnam's historical animosity towards China has been enhanced in recent years due to continued disputes over the possibly oil-rich Spratly and Paracel Islands in the South China Sea. Should Laos improve its relations with the US, Vietnam's western flank would be better protected and Hanoi would have a stronger position in both Laos and in negotiations with China.
China made extensive inroads into Southeast Asia after the 1997 Asian economic crisis due to a policy shift that emphasized development aid, economic incentives and cultural exchanges over hard strategic power. These moves were made easier by a general perception among ASEAN states that the US was focused elsewhere, largely on the "war on terror" in Iraq and Afghanistan. It was certainly not lost on regional leaders that then US Secretary of State Condoleezza Rice skipped two ASEAN summits in three years.
In contrast to the slow improvement in relations between Laos and the US, China's presence has grown rapidly after a period of cool relations in the 1970s and 1980s. Beijing provided generous assistance to Laos following the 1997-98 economic crisis and has since risen to become Vientiane's principal source of economic largesse through grants, low-interest loans, foreign investment and technical assistance.
CRS's January 2010 report stated that Laos receives approximately $400 million in bilateral and multilateral assistance annually. China's portion of that assistance is hard to gauge since its foreign aid programs typically entail a much broader range of activities than what is normally considered as overseas development assistance. This assistance includes concessional loans, grants, debt relief, public works projects, energy development, agricultural training, investments on preferential terms and the construction of schools, medical facilities and infrastructure.
China has placed considerable emphasis on creating a positive image in Laos through the construction of high-profile projects such as Vientiane's National Culture Hall and the central Lan Xang Avenue, leading to its famous Patouxy monument. A Chinese company was responsible for building the main stadium for the December 2009 Southeast Asian Games, held for the first time in Vientiane. China also trains hundreds of Lao military and government officials in its schools and offers numerous scholarships for promising Lao students to study in Chinese universities. It has also set up schools providing subsidized education for Laos eager to learn Chinese.
Beijing's foreign aid comes with a commitment of non-interference, different from the strings often attached to US and European aid that requires demonstrable progress in areas such as human rights improvements and corruption eradication.
The day before Campbell's recent visit to Vientiane, the State Department released its 2009 Human Rights Report. Under the entry for Laos, while indicating that human rights had improved somewhat, it noted that political freedom was limited, freedom of speech and freedom of the press were not respected, prison conditions were harsh and corruption in the government and judiciary continued. The report also noted that Laos had made some progress in enforcing its anti-human trafficking law, while also noting its increasing role as a transit country.
Those criticisms aside, US participation in the Lower Mekong Initiative and other efforts to counterbalance China's influence will likely win favor in Laos. While the US may not any time soon compete dollar for dollar with China's generous assistance, better publicized bilateral programs could start to narrow the gap in public perceptions and set the stage for a heartier competition for diplomatic influence.
hmm in my opinion, if Laos plays its cards right this will slingshot us pass our neighbors. riding on this growing economic wave of china, i have read this article a while back from asia times ? correct. it said that if U.S. played its part and gained ground in Laos then vietnam would also be given in advantage due to the ties the Lao government counterbalancing chinas influence. i think that would be one way the viets would win in this situation.
but as you said u.s. probably wont gain ground in south east asia any time soon so i think the winner would most likely be china and perhaps Lao.
laos has just signed an agreement with vietnam to a sea port and only see upward trend in Lao and its people.
my hope is that lao will gain a stronger independence after this whole economic wave is calmed down perhaps rearranging a new south east asian order.
and when that happens i think more lao will be willing to travel back.
all in all lao is doing much better then it was before, and it is going in a good direction.
i do believe that we need to focus more on infrastructure and human development.
education is key .
-- Edited by Destined on Tuesday 20th of April 2010 02:54:49 AM
Hey how are you doing? Im glad to see you're back BLM.
If Laos will play these opportunities wisely, no matter how fragile they are, it may turn out as a winner in the end. Up to them...
How nice, someone still misses me. Overall, I am doing well. I came across good news about our motherland, so I wanted to share. As you and Destined said, Laos is prudently plays its card for considerable gains and we can only hope for the best.Playing it wrong can also backfire in the end and remain vigilant can assure our understanding of their circumspect ambition. Otherwise, Laos' sovereignty can be rendered.I don't think you want half of the population with Viet's last name. Do you?
The fortunes of south-east Asian nations are becoming increasingly entwined with that of China, their powerful neighbour.
This, according to Marvin Yeo, managing partner of south-east Asian private equity firm Frontier Investment and Development Partners, means that investment in China’s neighbours has become an option for those interested in China itself.
FIDP, which has offices in Singapore, Cambodia and Mongolia, has launched its Cambodia and Laos fund, and is due to start investing its first $50m (£32m, €37m) by July. The fund is “an extended China play”, designed to profit from exports to China as well as the shift of investor interest from west to east. It will focus largely on agriculture and infrastructure, seeking to benefit from China’s continued demand for raw materials and its desire for food security and the need to improve transportation links for trade
Both Cambodia and Laos boast swathes of undeveloped land and untapped reserves of resources. The discovery of oil reserves off the south- west coast of Cambodia has yet to be quantified and the potential for Laos to become a major source of hydropower using the Mekong river has also not yet been utilised. But, says Mr Yeo, these countries are primed for rapid growth.
And as roads are built and an unbroken rail network is created across the region, the proximity to China of countries such as Cambodia and Laos will provide them with an additional advantage over commodity exporters further afield.
China has provided large sums towards developing infrastructure and transportation links in both countries. In March, a Chinese delegation to Cambodia pledged to expand commercial ties between the two countries, including an agreement between telecommunication companies Chinese Huawei Technologies and Cambodia’s CamGSM.
FIDP is interested in investing in the development of onshore processing, something both countries lack.
“A lot of the value of the materials is lost as it has to be shipped out and processed elsewhere. We’re looking to invest in, for example, existing agricultural projects as well as some greenfield projects by getting land concessions,” Mr Yeo explains.
China has increasingly cast its eye over the border to look at the land of its resource-rich and development-poor neighbours.
Changing diets, in particular a greater demand for meat and dairy products, have put China under pressure to ensure agricultural self- sufficiency. While agriculture accounts for more than one quarter of Cambodia’s gross domestic product, the country has lacked the irrigation networks needed to increase rice production for export. This is due to change with a $310m government plan to invest in irrigation to increase rice cultivation.
The Cambodia and Laos fund requires a minimum investment of $5m, locked up for at least four years from the time the fund closes. Targeted returns are at least 30 per cent. The fund has a targeted size of $200m and Mr Yeo admits that attracting investment has become far more challenging since the global recession.
Originally, FIDP had planned to launch a fund that invested solely in Cambodia, impressed by its economic growth and liberal economic policies.
But investment potential, low labour costs and a young and enthusiastic workforce were no match for the recession. Investor interest in emerging markets in Asia shrank with global confidence, says Mr Yeo. “Interest in China has remained strong so we changed the theme of the fund to make it an extended China play, incorporating both Cambodia and Laos, and introduced the new Mongolia fund,” he explains.
The Mongolia vehicle will be launched in the second quarter of 2010 and will focus on sectors including mining, renewable energy and distribution. Though Mongolia has just 2.6m people in an area the size of France and Germany combined, the discovery of minerals makes it valuable to China.
No investor in Cambodia, Laos or Mongolia should be under any delusion about the risks involved. Investments require long-term money and patience.
Corruption is rife and regulation in its infancy. But perhaps of greater concern is the question of whether China’s growth can continue unabated. Mr Yeo, however, is not unduly concerned.
“There has been talk of a bubble in China for years,” says Mr Yeo. “But if there is one, then it will be in the property sector in large cities such as Beijing, and so long as the plan of fiscal spending continues then China could weather such a correction.”
Follow and learn from our friend Vietnam does... Hope we can best benefit from Vietnam's rise, China's rise, status quo, NTR with US... and protect our own identity.
Laos, for various reasons, had been neglected by the outside world for so long and caused the delay in developing and modernizing the country for centuries. We were good at boasting, exaggerating our greatness but in reality, we've been the poorest country in Asia since the beginning of time. It was not due to our own misconception of our failure. But it was the lack of shame and of minimum IQs required among our leaders that caused such a lengthy stagnation. We are now about to pass the stage of backwardness to a more moderate and livable society where majority of citizens would have access to basic needs from indoor-toilets, sufficient food on the tables, to warm clothes during the wintertime.
Up to them...
