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 Laos
Progress and setbacks in Lao - Thai relationship
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A long-delayed hydropower scheme for Laos may now go ahead, thanks partly to economic recovery in neighbouring Thailand.
Thailand has agreed to take US$320 million worth of electricity from the Nam Theun 2 project over a 25-year period, and to purchase a 20 per cent stake in the development.
Thailand signed up as the major customer for Nam Theun 2 before the economic crisis struck in 1997, causing power demand to fall sharply.
Uncertainty over Thailand's future power requirements was a major cause of delay to the US$1.2 billion project - along with environmental and human resettlement concerns.
These appear to have been eased with a US$30 million commitment for a conservation area and agreement with the 800 affected families to be relocated.
The Lao government will hold an initial 25 per cent share in the project - a 900 MW `run of river' scheme - and gain full ownership after 25 years.
Electricity generation with sales to neighbours such as Thailand and Vietnam is one of the few potential major income earners for Laos, one of the poorest countries in Asia.
If Thai industry is seen as coming to the rescue of Laos' hydro power export drive, elements of the Thai power structure are viewed by authorities in Vientiane as seeking to undermine Laos' recovery from war devastation and under-development.
Border post attacked
In July armed men operating from Thai territory attacked and plundered a Lao customs post on the southern border. According to Lao press reports, `the bandits walked right through Thai immigration into Laos' and were accompanied by Thai media representatives. The attackers raised the flag of the former Lao royal family.
Twenty eight people including Lao exiles and Thai citizens have been arrested in connection with the attack but Thailand has so far failed to extradite them as Laos demands.
Several bombs have exploded in and around Vientiane this year, while the lingering Hmong ethnic insurgency in the north is reported to have escalated.
Such incidents have not prevented an increase in tourism, which Laos is counting on as an important source of income.
A sealed two-lane road financed by the Asian Development Bank and built by Vietnamese engineers now links the capital Vientiane with the major northern city of Luang Prabang along Route 13.
Four years ago bandits shot up a tourist bus and killed a French businessman north of the town of Kaxi where Route 13 climbs steeply into clouds.
Periodic bandit attacks have ended now that soldiers - tough `Lao Theung' tribesmen who provide the core of the army's elite units - permanently garrison the road.
Towns on Route 13 such as Van Vieng have sprouted backpacker hostels and internet cafes as the improved security situation draws travellers to this beautiful region of cloud covered limestone crags.
Van Vieng is also the site of a major and peaceful Hmong resettlement area. Here former opponents of the Pathet Lao have returned from camps in Thailand and are starting afresh with financial aid from the Lao government and the European Union.
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