Country Report Laos June 2009

Outlook for 2009-10: International relations

Laos will push ahead with its policy of regional and international integration in 2009-10, while maintaining close ties with the ruling communist parties in neighbouring China and Vietnam. Its policy on international affairs is firmly based on non-interference and peaceful co-operation, as demonstrated in its dealings with Myanmar in the aftermath of the devastation caused there by Cyclone Nargis. The Lao leadership places great emphasis on regional prosperity, and will support efforts by China and other countries to improve trade arrangements with the Association of South-East Asian Nations (ASEAN), of which Laos is a member. Co-operation between Vietnam and Laos will improve, and Laos will benefit from aid (including training for its military and civil service) in return for giving Vietnam access to natural resources.

The government will remain careful not to become entangled in contentious international issues that could threaten its attempts to attract investment and aid. Relations with Thailand will continue to be tested as Lao Hmong refugees are repatriated from a camp there-a process that could cause both Laos and Thailand further diplomatic embarrassment. Lao-US relations will remain prickly, given US pressure over the Lao government's human rights record.

© 2009 The Economist lntelligence Unit Ltd. All rights reserved
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