Introduction

By most accounts, 2002 was a politically quiet year for Laos. Unlike previous years, there were no student protests or bomb explosions in the capital, Vientiane, and no reported rebel raids against army and police outposts. President Khamtay Siphandone's government grip on power appeared absolute with no open dissent in the ranks. Elections to the National Assembly were held on 24 February, and the government claimed, “all 2.5 million eligible voters nationwide used their right to vote.” There were few surprises when a total of 166 candidates competed for 109 seats in the Assembly, which in effect is little more than a rubber-stamp body controlled by the ruling Lao People's Revolutionary Party (LPRP). Khamtay is also the president of the Central Committee of the party, which controls all aspects of life and society in the country.

The lack of political debate and initiative was seen by most foreign observers as the main reason why Laos’ troubled economy showed few signs of real improvement during the year. A Western embassy in Laos stated in an internal memo dated 10 October that: “the trend is disturbing.” The currency, the kip, continued to slide, inflation rose, foreign investment declined, not enough revenue was being collected, and the government did not even have enough money to pay state employees, such as teachers.

In the foreign-policy field, there were problems in the relationship with Thailand over border demarcation. Laos also continued to demand the extradition from Thailand of seventeen Lao rebels who had been involved in an attack on a border post in 2000, and then taken refuge across the frontier. Despite promises from Thailand, the issue remain unresolved as 2002 drew to a close.

On the other hand, Laos moved closer to its old allies, Vietnam and Cambodia. In January, the prime ministers of Laos, Vietnam, and Cambodia met in Ho Chi Minh City to discuss the creation of a “triangle development” spanning the three countries.