Next week, President Obama will arrive in Laos for the first visit of a U.S. president to the country. He comes to Laos for the U.S.-Association of Southeast Asian Nations (ASEAN) Summit, for the East Asia Summit, and also for bilateral meetings with several of Laos’s leaders. The tiny communist country, the current chair of ASEAN, selected new leaders---in its typically opaque way---earlier this year. According to some reports, Laos’s new leaders are eager to move the country away from its growing dependence on China for trade and aid, and are seeking to shift Laos back toward its historically closer relations with Hanoi, which was the patron of Laos’s communist party during the Indochina wars.
The new leadership also may want to cultivate closer links to the United States as a balance to China. Other countries in the region---most notably, Myanmar---have had similar strategic viewpoints; their leaders have welcomed U.S., Japanese, and European investment, aid, and diplomacy in part out of fear of becoming too dependent on Beijing. So, President Obama’s trip provides some opportunity for a major step forward in U.S.-Laos relations, which have already warmed considerably since the 1990s and early 2000s.
But the relationship cannot move too far forward. U.S.-Laos relations are necessarily limited. Laos is a high strategic priority for Vietnam---many of Laos’s new leaders also were educated in Vietnam and have close personal links to Vietnam’s current leadership, as do many top military officials in Laos. Vietnam is the historically dominant outside power in Laos, and Laos’s strategies for increasing its hydropower potential have potentially vast impacts on Vietnam’s portion of the Mekong River. Meanwhile, Laos is a modest strategic priority for Beijing, and for provincial governments in southern and southwestern China---modest, but significant.
The country is, however, relatively unimportant to U.S. policies in Asia, even in this era of the rebalance. And the fact that Laos has refused to offer clear support for U.S. partners in the region, like the Philippines, which are involved in disputes over the South China Sea, further complicates the U.S.-Laos relationship.
Meanwhile, Laos’s authoritarian and highly opaque regime makes it unlikely to be a recipient of a major boost in military-to-military ties with Washington anytime soon. Laos has no organized political opposition, and the brief period of growing government tolerance for slightly freer domestic media, a window that appeared in the early 2010s, seems to have closed. Civil society is more constrained than it was in the late 2000s or early 2010s; foreign NGO workers are more closely monitored. Social media is more closely monitored.
Laos’s economy, though one of the fastest growing in Asia, remains dominated by Chinese, Thai, and Vietnamese companies; U.S. investors are minuscule players in the country right now, and that is unlikely to change any time soon. The United States government has boosted aid for programs designed to protect the environment of the Mekong River basin, improve nutrition in Laos, and address other environmental and health issues, but U.S. investors are less enthusiastic about Laos. Laos’s most important sectors, like energy, are not particularly attractive to U.S. companies that do not want to deal with the complexities of hydropower projects in Laos, and the challenges of dealing with many parts of the Laotian government. Other economic sectors, like casino gambling and tourism, are already saturated with French, Thai, Laotian, Chinese, and Malaysian companies, among others.
Political instability in Laos appears to be rising as well, although it is always difficult to tell for sure what is happening in a country with many remote areas, no reliable domestic media, limited internet penetration, and a highly repressive government. Still, in the last two years Laos has witnessed a string of disturbing incidents, particularly in central-northern Laos and in Vietnam. There have been a series of attacks on vehicles traveling on the main road in central and northern Laos, in an area that was full of Hmong insurgent groups in the past. In addition, there has been a string of killings of Chinese nationals in Laos over the past two years, which has left at least four people dead. The attacks have come against people working at a logging company near Luang Prabang and against people working at a mining company, among others. Laos’s government has offered no clear answers to these tragedies, further adding to the sense of insecurity.