Laos
In 1975 the communist Pathet Lao took control of the government, ending a six-century-old monarchy. Initial closer ties to Vietnam and socialization were replaced with a gradual return to private enterprise, an easing of foreign investment laws, and the admission into ASEAN in 1997.
While there are currently no known specific threats to expatriate personnel visiting to or living in Laos, a series of small bomb attacks have occured in Vientiane and elsewhere since early 2000 and into 2001. The explosive devices, placed in public places including hotels and markets, have injured a number of Laotian citizens and several foreign visitors. The government has blamed the attacks on anti-government elements within the Hmong, an ethnic group spread across highland regions in several countries of Southeast Asia. The Hmong have denied responsibility. There had been speculation that the blasts may be a product of a split in the Laotian government between pro-Chinese and pro-Vietnam groups.
President Khamtai Siphandon was re-elected for his third term as president in March 2001. His Lao People's Revolutionary Party is the only legal political party in Laos and holds 98 of the 99 seats in the National Assembly. Khamtai is a general in the military and was previously prime minister. He oversaw Laos becoming a member of the Association of Southeast Asian Nations (Asean) in 1997.
The communist government in Vientiane had reached a degree of political stability and economic reforms have moved forward in recent years. Nevertheless, Laos has struggled to find its position within a rapidly changing political landscape. Observers say there are disagreements between the increasingly aged politburo, which wants to further ties with Vietnam, and younger party members, who see closer links with China as the way forward.
Foreign assistance makes up 80% of public investment in Laos. Now even some of the most loyal of the aid organisations are pulling out, following in the footsteps of hundreds of foreign companies that simply gave up hope of the Lao authorities ever getting to grips with a fully opened and efficiently managed market economy. Inflation is soaring and the local currency - the appropriately named kip - slumped to as low as 9,000 to $1 in 2001. When the Asian financial crisis struck in 1997 the Lao kip was worse hit than any other currency in the region - and while others are now recovering, Laos is still poised on the edge of financial ruin. A few well-placed individuals may have done well. While the Friendship Bridge, between Vientiane prefecture and Nong Khai, Thailand, was inaugurated in April 1994 creating additional commerce, the government as a whole remains fearful of being taken advantage of by Thailand and other representatives of what it still sees as the big bad world of global capitalism.
In a further blow to international investment confidence, an Australian couple held in a prison in Laos for almost a year after being sentenced to to seven years in jail after finding them guilty of embezzlement, tax evasion and destruction of evidence. They were originally accused of stealing sapphires worth more than $6m. While they were pardoned in October 2001, the have continued to assert their innocences. In November 2001, a member of the European Parliament and four activists were given suspended two-year prison terms and ordered to be deported from Laos for mounting a pro-democracy demonstration.
In still another sign of growing Lao isolationism, in March 2001 the government stopped issuing visas to foreigners who arrive in the country without prior permission.
Religious proselytizing or distributing religious material is strictly prohibited. Foreigners caught distributing religious material may be arrested and held incommunicado or expelled from the country with a heavy fine.
The government tightly controls travel to Saysomboun Special Zone and at times restricts travel to parts of Xieng Khouang Province (particularly Muang Khoune, Muang Paxai, and Muang Phoukout Districts) because of ongoing insurgent and bandit activity. Due to the risk of ambush travelers should avoid travel to Saysomboun Special Zone and Xieng Khouang Province (except for Phonsavan town and the Districts of Muang Kham and Muang Nong Haet).
