VZCZCXRO5534
RR RUEHCHI RUEHDT RUEHHM
DE RUEHVN #0668 2331002
ZNR UUUUU ZZH
R 211002Z AUG 07
FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC 1475
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS

UNCLAS VIENTIANE 000668 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS 
STATE FOR H 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD EINV KHDP PGOV OTRA LA
SUBJECT: VISIT TO LAOS OF STAFFDEL GUDES 
 
REF: A. VIENTIANE 390 
     ¶B. VIENTIANE 442 
 
 ¶1.  (SBU)  Visiting professional congressional staff members 
Scott Gudes and Dan Brandt visited Vientiane August 16-19. 
While in Vientiane they met with Vice Foreign Minister 
Phongsavath Boupha, who raised restrictions against Eximbank 
working in Laos, discussed financial reform in Laos with the 
Vice Minister of Commerce and officials from the National 
Assembly, and offered to set up a briefing on the Hill for 
UXO Lao if they visit Washington, DC as planned in early 
October.  End Summary. 
 
¶2.  (SBU)  Senate Budget Committee Minority Staff Director 
Mr. Scott Gudes and Minority Chief Economist Mr. Daniel 
Brandt met with Vice Foreign Minister (VFM) Phongsavath 
Boupha for an hour on April 17.  Mr. Phongsavath discussed 
the current state of the Lao-U.S. relationship and urged the 
U.S. to lift the ban on Eximbank financing in Laos, becoming 
the fifth Lao government official to raise this with either 
Post or visitors since March 2007.  (Note: Eximbank's charter 
prohibits aid to Marxist-Leninist countries, and Laos is 
included on this list.  The President may remove the 
restriction by signing a national interest waiver, as was the 
case with Vietnam.  (Ref A and B detail some previous 
requests by the Lao Government to lift the prohibition.)  End 
Note.)  VFM Phongsavath also requested that the U.S. provide 
more funding for humanitarian projects related to missions 
involving the Joint POW/MIA Accounting Command in Laos.  Mr. 
Gudes told the Vice Foreign Minister he would carry the 
information on Eximbank back to the U.S. Senate. 
 
¶3.  (SBU) Over lunch at the Ambassador's residence with Ms. 
Khemmani Polsena, Vice-Minister of Commerce, National 
Assembly representative Dr. Koukeo Akkhamounty, and Mr. 
Thanta Kongphaly, a senior National Assembly staffer involved 
in economic planning, staffdel members discussed their recent 
visits to Vietnam and Cambodia and the various strategies 
countries in Southeast Asia are using to strengthen their 
economies.  Noting the high cost of electricity in Cambodia, 
and the constraints this posed for the development of light 
industry, Mr. Brandt raised the idea of using Laos' abundant 
energy as a comparative advantage, offering foreign investors 
cheap electricity in return for setting up shop in Laos. 
Commenting on the small amount of electricity Laos is 
planning to use from upcoming power projects (for example, 
Laos will receive about 1/20 of the electricity produced from 
the World Bank financed Nam Theun II dam), Mr. Brandt 
suggested that perhaps future power project bidders should be 
required to contribute some of the electricity generated to 
Laos itself.  Dr. Koukeo revealed himself as a closet C-Span 
junkie, noting he found the broadcasts very instructive. 
Both he and Mr. Thanta listened with great interest to the 
staffdel's explanation of the U.S. budget process. 
 
¶4.  (SBU)  Dr. Koukeo told the staffdel members about the new 
Lao budget law, which centralizes revenue collection with the 
national government, away from provincial authorities.  The 
new law is intended to ensure that revenues are collected and 
distributed by the center.  Under the prior system, 
provincial governors had a great deal of autonomy in 
determining how much revenue to retain and how much to return 
to Vientiane.  Mr. Brandt pointed out that the initial 
Articles of Confederation had to be rewritten into the 
Constitution partially because the states did not voluntarily 
provide enough money to properly run the federal government. 
When Mr. Brandt noted that the U.S. system was designed to 
avoid excessive concentration of power, Dr. Koukeo expressed 
approval, reiterating the well known saying "power corrupts, 
and absolute power corrupts absolutely."  (Comment:  It is 
not every day that a nominally communist official voices such 
thoughts.  End Comment) 
 
¶5.  (SBU)  Prior to departing for Luang Prabang to tour the 
National Museum and American Corner, the staffdel had coffee 
with John Dingley, Senior Technical Advisor at UXO Lao, the 
Lao government's unexploded ordnance clearance body.  Mr. 
Dingley briefed the delegation on the current UXO situation 
in Laos and the American contribution to the cleanup.  Mr. 
Gudes appeared struck by the magnitude of the problem and 
questioned the apparent slowness of the cleanup.  Upon 
hearing that Mr. Dingley hoped to be in Washington in October 
with the Director of UXO Lao, Mr. Gudes offered to attempt to 
set up a briefing at the Senate for interested parties. 
 
 
HUSO