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DE RUEHVN #0335/01 1000425
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FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC PRIORITY 9798
INFO RUEHBK/AMEMBASSY BANGKOK 6478

C O N F I D E N T I A L VIENTIANE 000335 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EAP DAS ERIC JOHN, EAP/MLS 
 
E.O. 12958: DECL: 04/10/2016 
TAGS: PREL LA
SUBJECT: SCENESETTER FOR DAS ERIC JOHN'S VISIT TO LAOS 
 
REF: VIENTIANE 302 
 
Classified By: Ambassador Patricia M. Haslach, reason 1.4 (b) and (d). 
 
Summary 
------- 
¶1. (C) You are visiting Laos at a time when Lao-U.S. 
relations are at their lowest ebb since 1999, when two 
Lao-Americans disappeared on the border between Laos and 
Thailand.  The Lao government's detention of 27 Hmong 
deported from Thailand in December has much to do with the 
strain, but there are other factors -- the killings of 
American citizens in northeastern Thailand, Lao backsliding 
on religious freedom, and Lao failure to implement the 
Bilateral Trade Agreement, for example.  The March Party 
Congress showed that the Lao government's distrust of the 
U.S. is as strong as ever.  Far from liberalizing, the Party 
is strengthening its power.  The Lao drift toward China is 
unabated, although Vietnam remains the preeminent 
relationship. Thailand-Lao ties are cordial on the surface 
but suffer deep strains.  India and Japan have more limited 
influence. 
 
¶2. (C) Only within the context of ASEAN do the Lao appear to 
be moving in a positive direction -- ASEAN membership is 
slowly leading Laos toward economic, and perhaps eventually 
political, integration with the region.  Although relations 
with the U.S. are not good, we have a role to play here and 
U.S. assistance can go far in influencing Laos' future. 
While in Vientiane, you will be able to explain to senior GoL 
officials the U.S. role in the region and more particularly 
our interests in Laos, reassuring them that our goal is not 
regime change but improved behavior and better treatment of 
the Lao people.  It will also be an opportunity to press at 
senior levels the need for movement on our key concerns. 
Talking points on Lao-specific issues for the meeting with 
the Foreign Minister are at the end of this cable. End 
summary. 
 
Poor relations 
-------------- 
¶3. (C) The bilateral relationship is at its lowest point 
since two Hmong-Americans went missing along the Lao-Thai 
border in 1999.  Their disappearance was never solved, but 
all signs pointed to Lao security officials being 
responsible.  For now, we have only minimal contact with the 
GoL, and we are limiting our training and assistance for Lao 
officials to the extent possible.  The Lao appear to believe 
at least some of the recent events troubling the 
relationship, like the disappearance of the Hmong children, 
were provocations engineered by the U.S. 
 
¶4. (C) The central issue between the two governments today is 
the Hmong children. This issue has dragged on for four 
months.  The visit of the UNHCR Deputy High Commissioner 
Wendy Chamberlin to Thailand and Laos the week of March 27-31 
promised some hope of a resolution, but so far there has been 
no breakthrough.  The missing children are not U.S. citizens 
and the case does not immediately affect our interests.  It 
does, however, get to the heart of what we are trying to 
accomplish in Laos: promote human rights and respect for rule 
of law.  It also has shown the Lao government's paranoia and 
unscrupulousness.  The case reminds the international 
community just how little influence it has with the senior 
leadership. 
 
¶5. (C) While the issue of the disappeared children has 
dragged on, other problems have come up. In January, two 
American citizens were murdered in Nong Khai, Thailand, just 
across the river from Vientiane. These murders were the most 
recent of a string of killings in northeastern Thailand of 
persons associated with anti-Lao government activities. 
Among those killed since the beginning of 2005, in addition 
the Lao-American couple, were two other U.S. citizens.  Thai 
police investigations of the murders have been inconclusive, 
but information collected by DEA indicates the GoL may have 
been behind the killings. 
 
¶6. (C) The GoL's behavior in other areas over the past year 
has been nearly as reprehensible. On religious freedom, the 
government has taken steps back from several years ago, when 
it seemed to be on a course to institutionalize religious 
tolerance.  Lao officials burned a church and arrested 
Christians in Bokeo province last October, and have refused 
to permit the Catholic Church to ordain Laos' first new 
priest since 1975. The government has also lost momentum on 
its anti-trafficking efforts.  While it continues to spend 
donor money on anti-trafficking, it has made few real 
attempts to prosecute traffickers or to punish officials 
involved in facilitating illegal migrations to Thailand. 
¶7. (C) The Lao have also failed to respond to repeated 
appeals from the international community to establish a 
durable program for ending the Hmong insurgency. Reports from 
the jungle indicate the military may have stepped up efforts 
to eradicate the last pockets of insurgent resistance.  The 
GoL has been dilatory in approving USG-funded NGO projects, 
leading us to believe the government may have made a 
conscious decision to limit U.S. participation in 
developmental activities.  Finally, the Lao government has 
largely ignored inconvenient provisions of our Bilateral 
Trade Agreement signed in 2004. The Agreement remains only 
incompletely implemented and, partly as a result, the 
benefits of Normalized Trade Relations have been minimal. 
 
Political stagnancy 
------------------- 
¶8. (C) In part, this across-the-board backsliding can be 
attributed to growing conservatism within the Communist 
Party. The Party Congress held March 18-21 reaffirmed the 
leading role of the Party. It also instituted measures, like 
the creation of a new Party Secretariat and an accelerated 
membership drive, designed to further consolidate Party 
control. The changes in leadership were cosmetic: the new 
Party Secretary, Choummaly Sayasone, is a protege of his 
predecessor and comes from the same conservative, pro-Vietnam 
military background. Choummaly is a Khamtai crony and is 
unlikely to bring new ideas to the table. 
 
¶9. (C) There are no clear explanations for the Party's turn 
to the right, since its deliberations are opaque. However, it 
may be a product of the Party's new-found confidence in its 
economic leadership. Laos is attracting limited foreign 
investment, mostly in the mining and hydropower sectors. The 
Nam Theun 2 Dam, a $1.2 billion project which will bring in 
hundreds of millions of dollars over a period of years, is 
under construction.  Trade is picking up and foreign aid -- 
so far -- has kept close to a $400 million a year level, 
thanks in large part to Japanese, WB and ADB assistance.  The 
Lao believe they can sustain a six percent growth rate for 
years, enough to raise PCI figures to $800 a year by 2010 -- 
twice the current level -- and to bring Laos out of the ranks 
of Least Developed Countries by 2020. Convinced that its 
continued leadership is a sine qua non to achieving these 
developmental goals, the Party has rationalized its monopoly 
on power. 
 
China, Vietnam and Thailand 
--------------------------- 
¶10. (C) The real engine of Laos' development is China. 
Relations with China have never been closer. Chinese trade, 
investment and assistance to Laos are all growing at an 
unprecedented rate, as China looks to Laos as a source of 
cheap raw materials and a place to trade and invest. Laos has 
embraced the relationship, seeing China as a successful 
Communist country to emulate.  China is playing the role of 
socialist big brother that the Soviet Union played in the 
1980's and 1990's.  Laos' relationship with Vietnam remains 
strong, and changes to the Central Committee lineup made in 
that last Party Congress guarantee a continued pro-Vietnam 
policy. But on the practical level of trade and investment, 
Vietnam lags behind China.  Laos' relationship with Thailand 
is neurotic: superficially the two countries could not be 
closer, and share a similar language and culture, but beneath 
the surface the GoL distrusts the Thai, and the Thai are 
frustrated with Lao intransigence on issues like the 
Petchaboon Hmong.  Other countries play a lesser role here. 
India and Japan both use their assistance to steer Laos away 
from over-reliance on China, although their influence is 
limited. 
 
ASEAN 
----- 
¶11. (C) Laos' ASEAN membership stands out as the bright spot 
in an otherwise dismal political picture.  Having joined 
ASEAN in 1997, Laos has become an active player. In 2004-2005 
Laos was ASEAN chair, and hosted major ASEAN events like the 
Summit and Post Ministerial Meeting.  The government rated 
its chairmanship of ASEAN as a great success.  Other ASEAN 
member countries agreed that Laos played its "process" role 
well. Foreign Minister Somsavat owes his promotion to the 
Politburo at the Party Congress to his ASEAN success. Laos 
sees ASEAN membership as an avenue for integration into the 
larger ASEAN economy, and believes ASEAN membership will pay 
economic dividends. More importantly for Laos' long-term 
development, ASEAN membership could eventually help steer 
Laos toward more responsible political behavior, as it slowly 
adopts its institutions to conform to ASEAN norms. On the 
other side of the coin, the Lao remain resentful that the 
Secretary did not attend the Post Ministerial Meeting in 
 
SIPDIS 
Vientiane. 
The U.S. 
-------- 
¶12. (C) Lao-U.S. relations are not good, and many of our 
programs here -- counter-narcotics and UXO especially -- 
benefit Laos more than the U.S.  The state of our relations 
begs the question why we need to be engaged in Laos at all. 
Yet on a person-to-person level, ties with the United States, 
and its 500,000 strong community of Lao-Americans, is strong. 
 Most Lao (outside the Party) probably have a generally 
benign view of the United States and its allies.  Only the 
government here is venal; left to its own devices, Laos' 
present political course could threaten the entire region. 
We have already seen signs of Laos taking a turn for the 
worse: narcotics, especially amphetamine, trafficking by 
authorities, for example, is a well-known problem that 
appears to be growing.  Laos could easily become a haven for 
drug and human traffickers and terrorists.  U.S. aid can help 
thwart this trend.  Continued assistance to Laos' 
counter-narcotics drive is money well invested.  Assistance 
to the Lao on CT, and in particular creation of a mil-to-mil 
relationship, will help steer their security forces toward 
more responsible behavior. Most importantly, a continued and 
growing U.S. aid presence will convince the Lao people that 
the United States is engaged and concerned about their 
country's future. 
 
Your visit 
---------- 
¶13. (C) We have requested a meeting with Deputy Prime 
Minister and Foreign Minister Somsavat Lengsavad, who is now 
a Politburo member. We have also asked the MFA to prepare a 
venue, either the National Assembly or MFA's Foreign Affairs 
Institute, for you to give a formal presentation. 
 
¶14. (C) The Lao fundamentally misunderstand the U.S., and 
their outmoded Cold War view of us is frustrating even to 
their Vietnamese colleagues, who see us in a much more 
nuanced way.  Although the Foreign Minister regularly meets 
with high-level U.S. officials, he has rarely had a 
discussion that encompassed the range of bilateral issues. 
The formal presentation to the National Assembly or the 
Foreign Affairs Institute will allow you to explain the U.S. 
role in the region, from a strategic perspective.  in the 
meeting with the Foreign Minister you can also discuss our 
specific interests in Laos: POW/MIA, UXO, counter-narcotics, 
economic development, and promotion of human rights. 
 
¶15. (C) These exchanges may help convince the Lao that we are 
not attempting to subvert their regime, but will send a 
message that we believe strongly they must open their system 
and provide their citizens greater rights if they wish to be 
accepted as a member in good standing of the international 
community. 
 
Suggested talking points for meeting with FM 
-------------------------------------------- 
-- The U.S. is an active participant in Laos' development and 
has many important interests here. 
-- Locating remains of Americans lost in the Indochina 
Conflict remains a priority. We appreciate the Lao 
government's cooperation in this important effort. 
-- The U.S. is also the leading donor in the area of UXO. We 
expect to give on the order of $6 million this year for UXO 
activities. 
-- We remain deeply committed to helping Laos fight drug 
trafficking. Laos achieved a great success this year in 
eliminating significant opium production, thanks in part to 
U.S. assistance.  Laos deserves much credit for this 
unprecedented achievement. We are continuing to help, 
providing assistance to confront the more insidious problem 
of methamphetamine (ATS) trafficking and abuse. 
-- The U.S. is also providing significant assistance to Laos 
to confront a potential outbreak of Avian Influenza. 
-- Through the Global Fund and through USG assistance to 
International Financial Institutions like World Bank and ADB, 
the U.S. is actively contributing to Laos' development in 
many areas -- education, health care, and infrastructure. 
-- In all these areas, we are grateful for Laos' cooperation 
and we congratulate your country on the results that have 
been achieved to date. 
-- But we remain very concerned about some developments that 
are not positive.  In the area of human rights and political 
liberalization, your country has less to boast of. 
-- Our biggest concern is the continued detention of 27 Hmong 
people deported from Thailand in December. Most of these 
people were children. They should not have been detained and 
they should be released immediately to rejoin their families 
in Thailand. 
-- I would like to emphasize that this is a humanitarian 
issue. But your government's handling of this issue has put 
Laos in a very poor light internationally. 
-- We are also concerned about the fate of "remote people" in 
Laos' forests. We often receive reports from credible sources 
that Lao military forces are attacking these groups. The use 
of military force against them has made it impossible in some 
cases for them to resettle under your government's care. We 
urge you to reach out to these groups to encourage their 
resettlement and to allow international assistance to reach 
them after they resettle. 
-- In the area of religious freedom, there have been 
setbacks, especially at the district and provincial levels. 
Lao officials have arrested persons for their religious 
faith. The government has also so far not permitted the 
Catholic Church to ordain its first new priest since 1975. 
This is inexplicable. 
-- The Lao government needs to show that it is fully 
committed to stopping human trafficking. More effort needs to 
be put into arresting and prosecuting traffickers here, 
including Lao officials involved in trafficking Lao people to 
Thailand. 
-- Finally, we have noticed that NGO projects receiving USG 
funding face a difficult time obtaining MOUs from your 
government. We worry that the Lao government does not wish to 
see USG money being used in developmental work here. We urge 
you to look into this issue to ensure that USG-funded 
activities are vetted impartially. At a time when many 
developing countries are seeking developmental funds, Laos 
should be taking steps to make it easier, not more difficult, 
for donors to assist. 
 
HASLACH