History of Aid to Laos: Motivations and Impacts

Viliam Phraxayavong

History of Aid to Laos is the first comprehensive publication on development assistance to the aid-dependent country of Laos. Written by a former senior Lao official in international cooperation, the book investigates the situation of a country dependent on foreign aid for more than half a century and the ways in which donor nations have shaped Lao development and political relationships through the aid process. The story has involved a wide array of protagonists and antagonists, including Lao players of different factions (Right, Neutralist, Left Neutralist, Left and Royalist) and the Cold War rivals and their allies, who gave substantial support.

The book traces foreign aid to Laos beginning with the French administration in the 1950s, through American military-dominated assistance targeted to defeat communism, the communist bloc’s economic rescue and the related political upheaval, the increasing dominance of financial institutions and Western bilateral donors as Laos’s economy opened up, and finally, the ascendant influence and assistance of neighboring countries, notably China, Thailand, and Vietnam, as well as Malaysia and Korea, which have rushed into Laos’s open market economy to exploit its natural resources and eco-tourism potential.

After decades of foreign aid, Laos is left with a continuing dependence on development assistance, a status as one of the world’s Least Developed Countries (LDCs), and a host of new and old problems such as human trafficking, drug addiction, corruption, acute lack of human resources, and environmental degradation from mining, dams, and other “fruits” of economic development.

About the Author

Viliam Phraxayavong earned his PhD from the University of Sydney and is currently an associate of the Australian Mekong Resource Centre. He was director of international economic cooperation in the Royal Lao Government’s Ministry of Economic Planning and Cooperation from 1964 to 1975.