Laos – Russia 2023 Relations

By Chris Devonshire-Ellis

The Laotian Deputy Prime Minister, Pany Yathotou met with Russian President Vladimir Putin at the Far Eastern Economic Forum earlier this week. We discuss what was said and examine the strategic relations between the two countries. We also include comments and statistics concerning bilateral trade and investments. Laos is important for Moscow as a member of ASEAN, meaning the meeting had regional development significance.  

Pany Yathotou’s remarks are prefaced by the initials PY and Vladimir Putin’s by VP.  The session was moderated by Ilya Doronov.

Ilya Doronov: I would like to cite some interesting facts about Laos for the audience. I think it is important. First, diplomatic relations between the Soviet Union and Laos were established on October 7, 1960. We have found another reason to celebrate this day, have we not?

Vladimir Putin: We will celebrate together.

Doronov: In 2011, Russia and Laos established a strategic partnership in the Asia-Pacific region. The second fact that I discovered is that Laos is the most heavily bombed country in the world. The United States dropped over 200 million bombs on Laos during the Vietnam War, and 350,000 Lao people were killed in these bombings.

Third. The ruling Lao People’s Revolutionary Party remains committed to socialism. Fourth: Laos has a young pioneer movement. Fifth. Lao people still love baguettes and white bread. Such a good legacy from France. Lao coffee is considered one of the best in the world. Lastly, for us Russians, it is important that we can stay in Laos for 30 days without a visa, so welcome to Laos, and welcome to the pulpit.

Pany Yathotou: Thank you very much. I am pleased to take part in the 8th Eastern Economic Forum. It is a privilege for me. Laos is a member of ASEAN, and we are a country with a population of only 7 million people.

Laos is rich in natural resources, water resources, energy resources, minerals, and timber. We have many attractive tourist destinations as well. As for what Russia means to Laos and what our relations with Russia mean to us. Since the Soviet era, we have maintained traditional strong relations which later reached the level of a strategic partnership in matters of security in the Asia-Pacific region.

We are cooperating in many areas, including the economy, tourism, and human capital development, plus both countries share information and expertise gained in many other areas of mutual interest.

Cooperation between Laos and Russia allows us to support and help each other. We build our cooperation on the basis of mutual interest.

At the same time, Laos is a developing country, so our government attaches great importance to socioeconomic development. For this purpose, we are attracting investment from many other countries, including Russia. Our countries are investing in important areas such as energy, hydro resources, and hydrocarbon resources.

Russia helped us demine our land. This help was provided with no strings attached; we are still dealing with unexploded mines and ordnance which affect the lives of our people.

With Russia’s support, we could clear from mines more than 20,000 hectares of our land. After demining, we returned these 20,000 demined hectares to our people. Thus, by clearing our land of unexploded ordnance, we are addressing the most important task for us, which is eliminating the danger posed by unexploded ordnance.

Doronov: Mr. President, this question is for you. In the 1990s, we ceased to be friends with and support many other countries, for example, Cuba and Laos. Do you think it would be difficult to build back these relations now and to improve them to the level we maintained during the Soviet era?

VP: We gained many things in the 1990s, meaning above all, emancipation and freedom, but, regrettably, we also lost a great deal, mindlessly wasting and even squandering what we had achieved in the previous decades during the Soviet era.

But, as you know, the historical memory of the nations with which we were friendly, cooperated, and helped in their development has been preserved. It will not be difficult to restore our relations based on the new principles, because people in these countries want this. I am referring to Laos, where we see many friends, the Asia-Pacific region, and Africa.

The Russia-Africa Summit took place recently. Frankly, I was surprised once again by the Africans’ openness and their desire to work with us. I have been thinking about this too. You see, the point is not only that we did something for Africa, helping their people regain freedom and independence and fight against colonialism, although this is also important. They remember that, but they also remember other things.

What do I see as the main point? The main point is that we have never acted as colonizers anywhere. Our cooperation has always been based on equality or a desire to provide help and support. The countries that are trying to compete with us, including now, had a completely different policy. When people look at what happened in the past during their cooperation with Russia, or the Soviet Union as it was called then, and with other countries, their scales are tilted in favor of Russia, which we must certainly take into account and remember today.

If we look at Africa and our cooperation, we see that we helped it. What did the former colonizers do? Back in 1957 – I was recently been shown a photograph – they brought people from Africa in cages to European countries, for example, Belgium. It is an ugly sight, children put up on display in cages.

They brought people in cages and put them up on display, in a zoo. Nobody in Africa will ever forget this.

And now they are trying to issue commands and pursue their neo-colonial policy there. They have put all African countries in debt, which runs into trillions of dollars. In other words, they have created a financial credit system for Africa under which the African countries can never pay off their loans. These are not credit arrangements at all; it is a form of contribution if you see what I mean.

We used and still use a completely different approach, which gives us certain advantages when working with our partners, including those with whom we had special relations during the Soviet era and those with whom we are relaunching relations now. Our friends are aware of this as well.

Therefore, I do not expect to see any major difficulties, including in regaining our former positions.

Doronov: Since we have touched upon this subject anyway, can I ask you a question: What do you do with those who do not think this way? For example, what about the Baltic states, the Czech Republic or Hungary, who are saying that Russia acted as a colonizing power when it ordered its tanks to invade Prague or Budapest?

VP: We have long since recognized that this part of the Soviet Union’s policy was a mistake and did nothing but escalate tensions. A country’s foreign policy must not directly contradict the interests of other nations. That is all there is to it.

However, if we are talking about stepping on rakes, this is the case today for the leading Western powers, primarily the United States. It has been pressuring its allies and its so-called partners – after all, it does not have any friends, only interests. This is an extension of a well-known British formula.

Doronov: Madam Vice President, I have a question for you. What does Laos stand to win from working with Russia? For example, why have you decided to revive Russian language courses in your country? The fact that the President of Laos speaks Russian was not the reason, was it?

PY: Mr. Putin has already said that the Lao People’s Democratic Republic has indeed maintained very good and reliable relations with the USSR and the Russian Federation, and I agree with this assessment. We intend to build on our past success and fruitful cooperation to move forward.

Of course, this includes the humanitarian aid we receive. Trade between our countries has been on the rise, and investment increased to a certain extent as well. We also expect more tourists from Russia to visit our country.

Of course, we greatly appreciate all the advantages these relations have offered us. It is also obvious that the cooperation we had back in the Soviet era in capacity building and human resources was one of our biggest achievements which deserves a special mention. You were right to note that many of the leaders who headed Lao PDR studied in the Soviet Union in one way or another.

You may also know that we have built a railway connecting Laos to China.

This is a strategic project and we wanted to use it to expand this route all the way to Australia. It is our belief that expanding this railway to the territory of the Russian Federation would have a positive impact on trade and investment flows between our two countries.

This would also increase passenger flows from Lao PDR to China through Russia’s territory. We would like to discuss this matter in more detail so as to be able to tap this potential in our trade and investment relations. I do hope that our countries explore this opportunity so that it yields tangible results.

VP: You just spoke about Young Pioneers who operate in Laos as an organization. Madam Vice-President recently visited our Okean children’s camp and was glad to note that children from Laos spend their vacation there. They are provided with very good conditions and they have made great friends with their Russian peers.

But I also can add that Lao children not only attend the Okean camp but also study in the Suvorov schools in the Russian Federation. These are Lao cadets of Suvorov schools, military schools for children where they study and feel very comfortable.

Other Developments

During private meetings between President Putin and Deputy Prime Minister Yathotou, several other areas of bilateral cooperation were discussed, according to the Kremlin. These include financial settlements – which are likely to have extended to the development of Ruble-Kip trade as well as the development of a Digital Laos Kip, which is currently undergoing currency trials.

Laos medical professionals are also being educated at Russian Universities as part of an ongoing health and medical development plan between the two countries. 

Chris Devonshire-Ellis: Laos, despite its small size, is an important country for Russia due to its membership in ASEAN. Russia has a Strategic Partnership with ASEAN, signed in 2018, and has an ASEAN-Russia Comprehensive Plan of Action (2021-2025). This deals with key priority areas such as political and security cooperation, countering terrorism and transnational crime, ICT security, economy, industry, finance, science and technology, smart cities, energy, disaster management, health, connectivity, Initiative for ASEAN Integration, and food security.

ASEAN and Russia hold annual meetings under the ASEAN-Russia Senior Officials Meeting (ARSOM); the 19^th such discussions were held in Cambodia in April this year. Russia’s Foreign Minister, Sergey Lavrov, addressed the East Asia Summit, which includes all ASEAN members, in July. 

Russia and Vietnam also share a Free Trade Agreement via the Eurasian Economic Union (EAEU). The EAEU also includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan, filling a geographic space between Eastern Europe and China.

Russia’s trade with Vietnam has risen sharply since 2021, an effect of Russia moving its supply chains east. Vietnamese aquaculture and other consumable products are now a familiar sight in Russian supermarkets. There have been discussions concerning an ASEAN-EAEU trade agreement; whether this materializes on a bilateral basis with individual ASEAN members or as the complete bloc remains to be seen. However, the appearance of the Laos Deputy Prime Minister – previously also holding the position as Governor of the Lao Central Bank, at the Far Eastern Economic Forum raises a distinct possibility that a Laos-EAEU Free Trade Agreement may be in the offing. Laos’ GDP growth has also recovered from covid and is expected to reach 5% by the end of 2023.

Laos – Russia Bilateral Trade

Bilateral trade is very small, running at about US$50 million in 2022, however, this has been increasing and this can be expected to continue as Russia’s supply chains focus more on Asia and especially with ASEAN. Laos exports to Russia include fabrics, footwear, and coffee, while Russia exports paper, wood pulp, and plastics. There are developing ties as concerns tourism, with Russians now targeting Asia, especially during the winter season months. An estimated 17,000 Russian tourists visited Laos in the past 12 months, with this figure also set to grow. Russian is now included as a language on the Laos Tourist Board websites.

The bilateral trade volumes may never be huge, but with Laos having a voice in ASEAN, Russia will be using its diplomatic and trade connections to boost its presence in the region.

• Previous Article U.S.-Southeast Asia Relations in the Biden Era: A Timeline
• Next Article Philippines Central Bank to Introduce Incentives for Green Financing