Laos

Laos

Updated October 17, 2022
Laos
The Lao People’s Democratic Republic (LPDR or Laos)
did downgrade U.S. representation in Vientiane. Full
has a population of 7.2 million in a land-locked area around
diplomatic ties were restored in 1992. In 2016, when Laos
the size of Utah. Laos has been ruled by a single party, the
served as ASEAN’s chair and host of key regional
Lao People’s Revolutionary Party (LPRP), for more than
meetings, President Barack Obama became the first U.S.
four decades. Since a 1986 economic opening, Laos has
president to visit Laos.
gradually implemented market-based economic reforms,
and in 2013, became a member of the World Trade
Laos is heavily influenced by China and Vietnam. Some
Organization (WTO). However, Laos remains one of Asia’s
observers say the LPDR hopes to offset its reliance on its
poorest nations.
neighbors, particularly China, by broadening its relations
with others, but it is wary about U.S. advocacy for
Laos depends heavily on foreign investment—much of it
democracy and human rights. U.S. engagement in Laos has
from China—for its infrastructure development. This
focused on addressing Vietnam War legacy issues such as
reliance, as well as rapidly expanding trade with China, has
unexploded ordnance (UXO) and helping the LPDR
made Laos one of the Southeast Asian nations with the
develop the legal and regulatory frameworks it needs to
closest relations to Beijing. Many observers express
participate in global and regional trade agreements and
concern that Laos’ borrowing to fund infrastructure
integrate economically into ASEAN. U.S. and Lao officials
investment has raised its public debt to dangerous levels.
meet regularly through ASEAN diplomatic channels as well
According to a World Bank report published in April 2022,
as the U.S.-Mekong Partnership, which aims to promote
Laos’ total public and publicly guaranteed debt reached
cooperation and development among member countries in
88% of GDP in 2021.
the areas of economic integration, education, energy, the
environment, food security, health, water, and women’s
Laos is a member of the Association of Southeast Asian
empowerment.
Nations (ASEAN), and a partner in the U.S.-Mekong
Partnership (formerly called the Lower Mekong Initiative),
In 2004, Congress began extending non-discriminatory
a sub-regional foreign assistance effort launched by the
treatment to the products of Laos. Trade has grown since
U.S. State Department in 2009, under which the United
then, though Laos is the 157th largest U.S. trade partner. In
States provides assistance to nations that rely on the
2020, total goods trade between Laos and the United States
Mekong River for economic development.
was valued at $129 million. Lao exports to the United
States totaled $105 million in 2020, dominated by apparel
items and precious metals. U.S. goods exports to Laos
amounted to $25 million in 2020.
The U.S. government has noted progress and cooperation in
some other areas of the bilateral relationship. In 2009, the
United States and Laos exchanged defense attachés, the
first time in over 30 years, and the Obama Administration
removed the prohibition on U.S. Export-Import Bank
financing for U.S. companies in Laos, citing the country’s
commitment to opening its markets. In 2010, the two
countries signed a comprehensive Open Skies agreement to
expand and liberalize aviation ties. The Defense POW/MIA

(Prisoner of War/Missing in Action) Accounting Agency
Source: CIA World Factbook
(DPAA) has conducted approximately 150 Joint Field
Activities (JFAs) with the LPDR since 1985. Joint efforts
U.S.-Laos Relations
have recovered the remains of 288 American service
U.S. forces engaged covertly in a civil war in Laos while
personnel while 285 remain missing.
the United States was involved in the Vietnam War. The
United States supported a royalist government in its fight
Development Issues
against communist insurgents backed by the North
Laos’s economic growth has been steady, largely fueled by
Vietnamese, in part to prevent the transfer of North
construction, food processing, hydropower, and tourism,
Vietnamese weapons and supplies to South Vietnam. The
but the country performs poorly on many social indicators.
United States did not sever diplomatic relations with Laos,
Laos has the highest level of child mortality in Southeast
as it did with Cambodia and Vietnam, when communist
Asia, and about one-fourth of Lao children under five years
parties in these countries took power in 1975, although it
of age are considered underweight. Development of Laos’s
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Laos
economy, which remains agriculture-based, has been
in 2006 and consisting of China, the four MRC countries,
uneven and dependent upon natural resources, particularly
and Burma, focuses on joint infrastructure and hydropower
hydropower, metals, and timber, with wealth accruing
development. Critics argue that the China-led LMC has not
primarily in Vientiane, the capital and largest city.
paid sufficient attention to environmental concerns.
Laos has been a major participant in China’s Belt and Road
Unexploded Ordnance
Initiative (BRI) infrastructure development initiative. A $6
The United States dropped over 2.5 million tons of
billion Chinese-backed rail project that would connect
munitions, mostly cluster bombs or submunitions, on Laos
Vientiane with Kunming in southwestern China is the
during the Vietnam War, more than the amount of U.S.
largest BRI project in Laos. As noted, some observers argue
ordnance that fell on Germany and Japan combined during
that the level of debt being undertaken by Laos could pose
World War II in terms of tonnage. UXO has caused over
macroeconomic risks to the country. Laos’s rising debt
50,000 casualties since 1964, including 29,554 Lao killed
levels place further constraints on the government’s ability
and 21,200 injured. Unexploded submunitions reportedly
to finance development projects.
have caused over 7,700 casualties since 1964, including 32
in 2017, according to the Landmine and Cluster Munition
Foreign Assistance
Monitor and other sources. Mines also have hampered
The top sources of official development assistance (ODA)
economic development by making land unusable for
to Laos are the World Bank, Japan, South Korea, the United
agriculture and other uses.
States, and the European Union. China is a major provider
of infrastructure and other investment, development
Since 2016, Congress has significantly increased demining
financing, and other assistance. Much of China’s economic
assistance to Laos for clearing unexploded ordnance
engagement does not qualify as ODA as defined by the
(UXO). Between FY2017 and FY2021, Laos received
OECD, due to its large loan component, commercial
roughly $212.5 million in Nonproliferation, Anti-terrorism,
elements, and economic benefits accruing to China.
De-mining, and Related Programs (NADR) account
Chinese companies reportedly have invested $7 billion
assistance, including for conducting surveys of
toward dams, mines, rubber plantations, and special
contaminated areas and for victims’ assistance.
economic zones in the LPDR.
Human Rights Concerns
U.S. assistance efforts in Laos ($54.9 million in FY2018)
The U.S. government and Hmong-American groups remain
include demining activities; capacity-building programs
concerned about human rights issues and the Lao
related to Laos’s WTO membership and participation in the
government’s treatment of its ethnic Hmong minority. Laos
ASEAN Free Trade Area and ASEAN Economic
remains a one-party communist state. The LPRP dominates
Community; maternal and child health programs;
the political system and chooses all candidates in National
counternarcotics activities; and education initiatives.
Assembly elections. According to the State Department’s
International Military Education and Training (IMET)
Country Reports on Human Rights Practices 2021, freedom
programs focus on familiarizing Lao security sector
of expression and internet freedom are restricted, and the
personnel with U.S. military training and doctrine, building
state punishes people and has penalized publications for
military-to-military relationships, helping Laos integrate
openly criticizing the government. The government tightly
into the ASEAN defense network, and improving the Lao
controls academic activities, and closely monitors
military’s ability to respond to natural disasters and
nongovernmental organizations. The law does not provide
humanitarian crises.
for the right of workers to form and join independent labor
unions. There are a handful of known political prisoners,
The Mekong River and Hydropower
and a number of Hmong-Americans and Lao-Americans
Laos has been active in promoting hydropower along the
have disappeared in Laos over the past 20 years, with little
Mekong and other rivers. It has a reported 140 dam projects
apparent investigation by the Lao government.
under consideration, with investors from China, South
Korea, and other countries. Although these projects
In 2019, the Department of State upgraded Laos’s ranking
generate electricity and revenues for Laos, their potentially
in its annual Trafficking in Persons Report from the
adverse environmental effects include displacement of
bottom-most Tier 3, and ranked Laos as a Tier 2 nation in
people; the loss of agricultural land; disruptions to water
the 2021 report. The report stated that the LPDR “does not
supplies, agriculture, and fish stocks; and the decimation of
fully meet the minimum standards for the elimination of
some wildlife and aquatic species in Laos and neighboring
trafficking but is making significant efforts to do so.” The
countries. In 2018, the collapse of a hydroelectric dam
report said Laos is a source and, to a lesser extent, a transit
killed at least 40 people and displaced more than 6,000.
and destination country for women, children, and men
subjected to sex trafficking and forced labor.
The U.S.-Mekong Partnership provides support to the
Mekong River Commission (MRC), an inter-governmental
Ben Dolven, Specialist in Asian Affairs
agency among Cambodia, Laos, Thailand, and Vietnam, to
Thomas Lum, Specialist in Asian Affairs
promote sustainable development of the Mekong River and
collaboration on the management of shared water resources.
IF10236
The Lancang-Mekong Cooperation forum (LMC), launched

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Laos

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https://crsreports.congress.gov | IF10236 · VERSION 6 · UPDATED