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"Guidelines for Laos to get rid of underdevelopment on the path of Asian Economic Integration in the 21st Century"

June 9, 2000

His Excellency Sisavath Keobounphanh
Prime Minister of the Lao PDR

Mr. Chairman, Excellencies, Distinguished guests, Ladies and gentlemen,

It is indeed a great pleasure and honor for me to be invited to attend the 6th International Conference on "The Future of Asia". This conference is significantly important for Asian people and for those who are interested in Asian affairs. Once again, I would like to express my profound condolence for the great loss of H.E. Keizo OBUCHI, former Prime Minister of Japan, who was farsighted and keen to revitalize Asian economy after the financial crisis. Early this year H.E. Obuchi visited Vientiane, the capital city of the Lao PDR and announced to further materialize the foreign policy of Japan in enabling the least developed countries, in particular the Lao PDR to integrate in Asian economy. He then became a true friend of our people ever since. He invited me to visit Japan and that is why I am here to meet all of you. In this connection, I would like to express my sincere thanks to Nihon Keizai Shimbun for the warm welcome and hospitality accorded to my delegation.

Asia is a vast continent endowed with enormous natural, human resources, and great potentials in many areas relative to the global level. In addition, ancient civilizations were also found in Asia, which many modern sciences of the world today find their origins in this continent. In lights of these facts, Asia should have been more developed than it is today and many countries in the region should not have been experiencing such economic disparity. On the contrary most of the countries had not only been colonized for many centuries by colonial powers from other continents, but have also experienced continuous destructive wars. Lao PDR, a country in Southeast Asia, is of particular example that fell victim to both for nearly one century from foreign domination till the Indochina war.

All these experiences taught us that we should firmly maintain the course national independence and enhance cooperation to enable Asia to play a great role in the political, economic and social lives of the international community in the 21st century. To this end, it is imperative to all Asian nations to overcome myriad difficulties and challenges, particularly in the globalization era, which tends to widen the existing gap, among countries in their levels of economic development.

I realize that all the Southeast Asian countries have been brought together in the ASEAN family based on the principle of the Treaty of Amity and Cooperation in Southeast Asia of 1976. This constitutes the first significant step towards the economic integration of ASEAN member countries. The following step is to promote and further expand the off-shot and well establish mutually beneficial cooperative relations between ASEAN and East Asian countries which are currently a good start and basis. It developed Dialogue Partners or the 10 + 3 process. The third and most important step that should be seriously pursued by joint efforts between ASEAN and its developed Dialogue Partners to reduce the gap in the levels of economic development among countries.

In regard to the third step, I have the view that with the common efforts of the countries in the continent and with the increasing economic and political role of Japan, the People's Republic of China, India as well as ASEAN, Asia will the continent of long lasting peace, stability, cooperation and prosperity.

As a new member of ASEAN, despite being underdeveloped country the Lao PDR also has its own potential to contribute to the above-mentioned common efforts. With our national strength in many areas and the favorable conditions of the region and the world, we are confident that we have sufficient capacity to progressively develop our country into prosperity. The most important thing is that we have the policy of establishing agro - forestry economy closely linked to the industry and services from the very beginning, promoting multi sectoral economy based on the market economy mechanism and opening up of external relations. I would like to provide some information as follows so that you understand better:

1. The Lao PDR is a land locked country with more than 2,000 km long from the North to the South situated in the centre of the Mekong sub-region and shares common borders with five countries of which four are ASEAN member countries namely Vietnam, Cambodia, Thailand and Myanmar, and China, an ASEAN Dialogue Partner.

2. The Lao PDR has rich natural resources with 11 million hectares of forests accounted for 47% of the country area, 4 million hectares of agricultural area, and about 42% of water sources running to the Mekong river is from Laos. It also has fantastic natural and cultural tourist sites including a World Heritage, Luang Prabang.

3. The Lao PDR is politically and socially stable, and since 1986 it has reformed the centralized economic mechanism to market-oriented economy. In engaging the policy of expanding external relations in 1994, the Lao government has amended to improve the Foreign Investment Law to provide better conditions since its adoption in 1988. To date, foreign investors have registered to invest in Laos more than 600 projects amounting over US$7 billion, 75% of which is in electricity sector. Socio-economic development in the Lao PDR has been satisfactorily achieved. Laos plans to liberate itself from being the least developed country in 2020.

4. The constraints of the Lao PDR are characterized by lack of human resources and the underdeveloped infrastructure; for instance, roads connecting provinces are not accessible in 2 seasons.

Therefore, based on such actual potentials and constraints, I strongly support the initiatives of the government of Japan, as proposed by H.E. Mr. Keizo Obuchi, former Prime Minister of Japan, at the ASEAN-Japan Summit last November, specifically on cooperation for the economic development of new ASEAN member countries located along the Mekong riparian countries in order to narrow the gaps of economic development disparity between the new and old ASEAN members, which is a vital contribution to ASEAN Mekong sub-regional Development Cooperation Programme.

In order to facilitate the cooperative development on the basis of mutual benefits in East Asia, and based on the specific conditions of Laos, I would like to request friendly countries to focus on the following projects:

1. Explore the strength of tropical agriculture in association with the development of processing industry.

2. Construct more hydropower scheme to supply electricity to neighboring countries that have insufficient energy. According to the Mekong river Commission data, the tributaries of the Mekong River in Lao PDR alone can generate electricity up to 21,000 MW, but only 600 MW is currently in use.

3. Development of communication infrastructure including railways, water and air transportation in order to facilitate and promote regional linkage, as Laos is situated in the centre of five countries. ASEAN has agreed to construct railway lines connecting Singapore to Kunming, the Southern part of China, of which one line will pass through cross the Lao territory. Due to the economic and financial crisis in the region the project has been delayed. The road construction projects linking Central/Southern part of Laos with Central part of Vietnam, Northeastern part of Thailand and the northern part of Cambodia are also very important that receives financial support from the Asian development Bank. In October 1999, the Prime Ministers of Laos, Vietnam and Cambodia met in Vientiane and initiated to establish a Triangle Development Area which includes the southern part of Laos, the Northeastern part of Cambodia and the Central part of Vietnam.

4. Promote Eco-cultural tourism in the region which will be an important factor to boost the production, job creation and rural development in line with the guidelines that ASEAN and Dialogue Partners have already agreed upon.

All in all, with the support of Japan, as the economic super power on the basis of mutual benefits, the economic disparities among ASEAN members will be narrowed and the economic development levels of the less developed new ASEAN member countries will gradually grow closer to those of the old members as well as those of the region in consistent with Hanoi Plan of Action which is the key factor to help accelerating the implementation of ASEAN Free trade Area, and at the same time this will contribute to the efforts of economic integration of ASEAN members. This will also help East Asia and Asia as a whole to play a more significant role in the international socio-economic and political affairs. I am confident that despite being underdeveloped country will be able also to contribute to the development of cooperation for the prosperity of Asia.

I would like to conclude by taking this opportunity to express my wholehearted thanks to the government, various organizations and the people of Japan for extending their valuable support and assistance to Laos in technical, economic and human resources development.

May I wish this conference a great success.

Thank you.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.