The government of the Lao PDR holds that the defection of two Khmer Rouge leaders, Khieu Samphan and Nuon Chea, to the Royal Government of the Kingdom of Cambodia is an internal affair of Cambodia. 

The Cambodian government and people have the right to settle all issues occurring within the country in accordance with the reality of the country and the legitimacy as well as the lines and ways of settlement as practiced in the country. 

Their defection to the Cambodian government is due to the fact that the Kingdom of Cambodia is an independent and sovereign state, which has its own government through a free and fair election accepted by the international community. 

The Kingdom of Cambodia is a member of the United Nations and other major international organizations in the world. The Lao government and people, as a neighbor who has shared joy and suffering, have no other wishes than seeing the national reconciliation, peace and stability in Cambodia so that all efforts and conditions can be pooled for the benefit of its national development and prosperity. 

Accordingly, the Lao government and people respect all decisions of the government of the Kingdom of Cambodia in the settlement of their problems. 

LAOS-CHINA RELATIONS BLOSSOM 

The heads of the Chinese and Lao Governments agreed the two countries will develop a long-term, stable and co-operative good-neighborly relationship of mutual trust oriented towards the new century. 

China is willing to further develop co-operation with Laos in all aspects based on the five principles of peaceful co-existence, Chinese Premier Zhu Rongji told his Lao counterpart, Sisavath Keobounphanh, during their 90-minute talk. 

China and Laos, both socialist countries and having adopted policies of reform and opening-up can learn from each other in the process of economic development and the promotion of social progress, said Zhu. 

This year marks the 10th anniversary of the normalization of the bilateral ties between China and Laos. During the past decade with the combined efforts of China and Laos, the traditional friendship between the two countries and that between the two parties have enjoyed an all-round restoration and development. 

The two countries satisfactorily settled their historical border issue in a rather short period of time and have cooperated closely in international and regional issues. 

China highly appreciates Laos' stance of “One China," Zhu said. He also thanked the Lao Government for its aid following last year's floods. 
 

For his part, Prime Minister Sisavath spoke highly of China's important and positive role in international and regional affairs. 

What China has achieved in the past two decades is an inspiration to Laos and other friendly countries and has provided precious experiences, Mr. Sisavath said. 

He thanked the Chinese Government for its assistance to Laos, saying it is important to the Lao people. 

As neighboring countries, China and Laos should strengthen and deepen co-operation in various aspects, Sisavath said. 

China and Laos signed five agreements, including an agreement on civil and criminal judicial assistance between the two countries, a governmental agreement on the prevention of dual taxation of incomes and tax evasion and a governmental framework agreement on China's provision of loan with favorable terms to Laos. 

Prime Minister Sisavath invited his Chinese counterpart to visit Laos at a time of his convenience, which Mr. Zhu accepted gladly. 

Mr. Sisavath Keobounphanh and his delegation, on their route to Beijing for an eight-day official visit to China, made a stop over at Kunming. Besides Kunming and Beijing, Mr. Sisavath and his party were also scheduled to visit Hainan province, and the Guangxi Zhuang autonomous region. 

Lao Prime Minister also called on the Chinese President Jiang Zemin. According to the Primer Sisavath, the two countries reviewed the progress made in bilateral cooperation and outlined the framework for furthering the bilateral relationship in the future. 

As the new century is approaching, China is willing to make common efforts with its Lao comrades for the establishment of long-term, stable, mutually trusting and good-neighborly cooperative ties between the two countries said President Jiang.  Also, he believed Mr. Sisavath visit China will push forward the development of friendly and cooperative ties between the two parties and the two countries. 

  
US CONGRESSMAN VISITS LAOS 

US Congressman Tony P. Hall visited the Lao People's Democratic Republic to further the relations between the two countries. Congressman Hall's visit to Laos is part of a three-country tour of Southeast Asia that includes stops in Thailand and Myanmar as well as the Lao PDR. 

On January 15, Congressman Hall met with Mr. Keyoun Nhodsayviboune, Chairman of the Legal Affairs Committee at the National Assembly. He also met with Dr. Siho Bannavong, Vice President of the Lao Front for National Construction. Later that day, he called on Deputy Prime Minister and Foreign Minister Somsavat Lengsavad at the Foreign Ministry. Mr. Somsavat discussed with his guest issues of bilateral cooperation during which the sides expressed their view that they would like to see the relations between the two countries enhanced. 

Mr. Hall visited Savannakhet province to see progress in Lao-American cooperation in the field of MIA and saw Lao-American cooperation projects in the area. 

  
FRENCH CHAMBER OF COMMERCE VISITS LAOS 

Deputy Prime Minister and Minister of Finance, Mr. Khamphoui Keoboualapha welcomed a French delegation of the Chamber of Commerce.  The delegation was led by Mr. Jean-Francois Bernadin, President of the Chamber of Commerce and Industry of Versailles. 

The Vice Prime Minister highly valued the delegation's visit and hailed it as an effort to find ways to further strengthen the co-operation between the two chambers. 

  
LAO-HUNGARIAN COOPERATION EXPANDS 

In order to help each other, Hungary will provide further assistance in agricultural development for the Lao PDR in accordance with its capacity. 

The statement was made at a meeting between Dr Siene Saphangthong, Minister of Agriculture and Forestry, and a visiting Hungarian delegation of agriculture, led by Deputy-Minister of Agriculture, Mr. Bara Sabady. 

The chief of the Hungarian delegation also expressed hope that in the future the two countries would step up bilateral co-operation in agriculture. 

Dr Siene Saphangthong praised the official visit to Laos by the Hungarian delegation and hoped it would contribute to tightening the co-operation between Laos and Hungary, especially the co-operation between the Ministry of Agriculture and Forestry of the Lao PDR and the Ministry of Agriculture of Hungary. 

The two ministries have had close ties and helped each other constantly. One of the aid projects from the Hungarian Ministry of Agriculture to Laos is the Lao-Hungarian Chicken Breeding production Center. 

  
LAO-EU COOPERATION BEARS FRUIT 

Deputy Prime Minister and Foreign Minister Somsavat Lengsavad expressed satisfaction with the development of the ties and cooperation between the Lao PDR and the European Union (EU), during his meeting at the Ministry of Foreign Affairs with Mr. J. Gwyn Morgan, Chief of the South East Asian Bureau and Director of the Foreign Relations Office, EU. 

The EU official was accompanied in the meeting by Mr. Michel Caillouet, EU Ambassador to the Lao PDR. 

The bilateral ties and co-operation have seen continual growth since diplomatic ties were established in 1986. The assistance from the EU to the Lao PDR is on the rise each year. Since 1991,the aid value amounts to 88 million ECU, about US$ 110 million. 

The ties and co-operation between the EU and Laos have even been tightened following the signing of an agreement on co-operation in development, economy and commerce in April last year. The cooperation is concentrated on rural development, environment protection, and refugee affairs. 

Since 1991, Laos and the EU have had 16 cooperation projects, worth US$ 122.83 million, of which US$ 110 million is grant funding from the EU and the rest is the contribution of the Lao government. 

LAO-FRENCH COOPERATION IN PUBLIC WORKS 

An agreement on cooperation was signed between the Panyathip Construction Co Ltd and the French Group "Match". 

The agreement envisages the optimization of the actual techniques used in the domain of public works: including bituminous paving, road traffic signs, traffic management, and public lighting. 

The Memorandum of Understanding was in furtherance of the Lao-French Co-operation reached in 1997 between Vientiane municipality, the city of Paris (ADITEM), the National Committee of the Councilors of the External Commerce of France, the Lao Ministry of Communications, Transport, Post and Construction and the Match Group. 

  
JOINT INVESTIGATION AND RECOVERY OPERATIONS FOR MIA START 

On January, 1999 technical representatives of the Lao People's Democratic Republic and the United States began joint investigations and remains recovery operations pertaining to Americans unaccounted for in Laos. 

This will be the 41st Joint Field Activity conducted by Lao and US representatives. The team plans to excavate up to 10 sites. Lao and US officials will work together on the operation. 

There are 2,076 Americans still unaccounted-for from the war in Southeast Asia. Of that total, 446 are unaccounted for in Laos. 

The Lao government regards its assistance as a humanitarian matter. Seeking the fullest possible accounting of Americans unaccounted for as a result of the war in Southeast Asia is a matter of highest national priority for the United States. 
 

  
UXO LAO EXCEEDS CLEARANCE TARGETS IN 1998  

In its recently published 1998 Annual Report, Lao National UXO Program (UXO Lao) said the national demining organization met some of its targets for 1998. 

According to the report, 67,875 items of ordnance were destroyed across the country, exceeding its target of 45,000 items of ordnance. 

The UXO clearance occurred in the provinces of Houaphan, Xieng Khouang, Luang Prabang, Savannakhet, Champassack, Saravan, Sekong and Attopeu. In Khammouane province community awareness activities were undertaken. In each of the nine provinces where UXO related activities were carried out, a field operations office has been established. 

Last year over 291 hectares of agriculture and land for development was cleared of unexploded ordnance. This far exceeded the yearly target, which had been set at 200 hectares. 

Last year UXO Lao used the Nam Souang Training Center (50 km north of Vientiane) to train UXO deminers, medics, community awareness personnel, team leaders and instructors. During this period a total of 269 students graduated from the Center, which actually fell short of the projected target of 377. Officials said this was due to the delay in implementing project activities in Khammouane, which delayed recruitment and training of new staff. 

Starting January 1, 1999, UXO Lao began training recruits at a new training center at Ban Ilay. This new facility has been provided by the Ministry of Labor and Social Welfare. 

UXO Lao officials note that community awareness activities remained a high priority for UXO Lao during 1998.  Teams in the nine provinces visited a total of 556 villages and briefed over 161,000 people on the dangers of unexploded ordnance. 

Community awareness activities included the use of schoolbooks, shoulder bags, T-shirts, and UXO-awareness was also incorporated into the school curriculum for primary school children. 

The community awareness teams also produced a series of radio broadcasts that were aired on Lao National Radio in Vientiane and on local radio stations in Savannakhet, Khammouane and Champassack. 

Despite the UXO-awareness raising efforts, and the success in alerting many people to the dangers of unexploded ordnance, there were still UXO-related accidents reported during 1998 of those 59 people were seriously injured and 30 were killed. 

Last year UXO collaborated with Handicap International to conduct a nation survey on the socioeconomic impacts of UXO in Laos. This level-one survey gave UXO Lao information, which enabled them, along with their implementing partners, to formulate a program, which focused on priority areas within provinces that have high levels of UXO contamination. UXO Lao's Geographic Information System (GIS) was also greatly enhanced with the receipt of the first trache of the United States historical records. With this new data, the GIS is now able to create lists of ordnance types found in areas of high priority. 

UXO Lao's ongoing work continued with the support of the international donor community as well as contributions from a small number of private donors. Donors to the Lao UXO Trust Fund over the past three years include the United States of America, Luxembourg, Australia, Belgium, Canada, Denmark, Finland, the Netherlands. New Zealand, Norway, Sweden and the United Kingdom in addition to the contributions made to the Trust Fund, UXO Lao also receives bilateral support for the governments of the United States, the Federal Republic of Germany, the European Union, Belgium and France. 
 

  
US EMBASSY EQUIPS UXO LAO 

The US government on January 22 decided to assist the Lao National Unexploded Ordnance Program (UXO) by donating pieces of equipment useful for alleviating the plight of Lao People affected by unexploded ordnance. 

The equipment, worth US$ 180,000 was handed over at the UXO Lao National Office.  The donation consisted of 89 handheld radios, computer program upgrading material and topographic maps of the Lao countryside and 4 Codan radio systems. 

The radio systems include 4 laptop computers with monitors for the global positioning system and 1000 hats. 

This humanitarian assistance was coordinated by the Humanitarian Demining Office of the US Embassy and provided under a bilateral cooperation agreement between the governments of the Lao PDR and the United States. 
 

TELECOMMUNICATIONS NETWORKS AMONG INDOCHINA 

Issues associated with accounting reform, legislative and regulatory reform, and partnerships with the privates sector were the main topics tabled at 5th Sub-regional Telecommunications conference for Cambodia, Vietnam and Laos held in Siem Reap, Cambodia. 

The three topics selected for discussion at the International Telecommunications Union (ITU) sponsored meeting were relevant to the current situation of the sector's development process, especially in the Lao PDR where partnerships between the government and the foreign private sector have led to the enactment of telecommunication legislation to govern the sector. 

During a 3-day working meeting, senior executives discussed telecommunications development in their respective countries and representatives also focused on the keyway of improving telecommunications networks in order to build better infrastructure to facilitate the demand placed of communications in the information age. 

According to a representative from the Ministry of Communication, Transport, Post and Construction of Laos, although the meeting was short in duration, delegates came away from the gathering with a more informed view of telecommunications development policy, governance issues, licensing, regulations, spectrum management, pricing and criterion for entering into a good joint-venture arrangement with foreign partners. 

BUILDING LAO NATIONAL MEKONG COMMITTEE'S CAPACITY 

The Lao National Mekong Committee (LNMC) and the United Nations Development Program (UNDP) formalized three years of cooperation at a signing ceremony for the "Capacity Building Assistance to the Lao National Mekong Committee" Project. 

The overall development objective of this project is to contribute to the sustainable utilization, management and development of the natural water and related resources through coordination between countries of the Lower Mekong River Basin, by integrating economic, social and environmental issues. This goal has been established by the Mekong River Commission, therefore representing the shared wishes of the governments of the Lao PDR, Cambodia, Thailand and Vietnam, and is supported by the UNDP. Hence, strengthening the LNMC contributes to improved resource management and greater intra-government and regional cooperation. 

This two-year project costing US$ 250.000 aims at institutional strengthening, particularly in the area of Human Resource Development, to improve the efficiency and effectiveness of the LNMC and its Secretariat. Its immediate objectives are specifically targeted at: 
1) Upgrading the skills and knowledge of LN MC Secretariat staff 
      2) Improving effectiveness and efficiency in cooperation and staff performance 
      3) Enhancing cooperation between national line ministries and the Mekong River Commission Secretariat and other Mekong stakeholders. 

Special attention is being paid to development issues of shared concern to the government of the Lao PDR and the MRC, such as the building of national capacity in the areas of environment and gender sensitivity, with a focus on the information and coordination roles of the LNMC. 

This is a nationally executed project, with the National Project Director being the current Acting Director of the LNMC Secretariat. The Project will be implemented by the staff of the LNMC Secretariat, as they look forward to training opportunities to improve their English and upgrade other technical skills and knowledge. Improved office efficiency is expected to be a result of this training, additional equipment, effective communication system, and other work-place practices. 

The Lao National Mekong Committee will also be upgrading its library and information resources, which will soon be more accessible to all interested parties, enhancing the LNMC's role in providing valuable information about Mekong development. 

Both the donors and the related agencies of the Government of the Lao PDR are looking forward to working together to build capacity in the areas of co-operation, coordination, communication and information. 

FIRST EVER LAO AGRICULTURAL CENSUS 

The Lao PDR is the latest participant of a global program for agricultural census taking effort that will begin early this year and will provide the country with a detailed up-to-date statistical analysis of the agricultural sector. 

With the Swedish International Development Cooperation Authority (SIDA) providing the financial and technical support, the Lao Agricultural Census (LAC) is a joint project of State Planning Committee (SPC) and Ministry of Agriculture and Forestry (MAF). 

The Lao Agricultural Census is the first such census undertaken in the Lao PDR. It is being conducted in all 141 districts and is one of the largest and most important statistical collections ever undertaken in the country. 

The Census was part of the world - wide program for agricultural census taking, which started in 1930. There are now over 120 countries participating in the program. Many of them undertake agricultural censuses every ten years. 

The initial phase of the project involves the training Lao agricultural and statistical officials in Vientiane. 

As part of this course, 60 trainees from the National Statistic Center and provincial statisticians are learning theories of agricultural censuses and practical application techniques. They will eventually interview agriculture landowners, and measure land to collect data at two districts in Vientiane municipality. 

In addition, trainees will learn how to manage and organize the census data collection and to train enumerators to provide instruction on how to fill out the questionnaires. 

The government already has some statistics in the area of rice production and other major crops, as well as livestock numbers. However, too little information remains available, for example the different types of rice grown, the number of rice farmers, the area planted for minor crops, the use of different inputs, the use of farm machinery, farm size, farm labor and age, and the sex structure of livestock. The Lao Agriculture Census will eventually provide these and many other data. 

Furthermore, the Lao Agricultural Census has a plan to collect detailed data of on crops and livestock from all 800,000 households in the Lao PDR. 

  
CONSTRUCTION OF AFFORESTATION CENTER STARTED 

Construction of the Afforestation Center at Sivilay village, Hin Heub district Vientiane province started. The aim of the center is to tend to the problems of forest degradation in the lower part of the Nam Ngum dam watershed area and its vicinity. To reduce the trend of forest degradation through administrative guidance of local governments, such as those in provinces and districts and through the voluntary participation of local people at project target villages in Vientiane province. 

Funds for construction total 416 million yen (approx. US $3,500,000) received through a grant aid from the Japanese government. The project was surveyed and designed by the Japan International Cooperation Agency (JICA) and expected completion is December 1999 

  
NEW ROAD IN SOUKHOUMMA COMPLETED 

To encourage tourism and facilitate travel within the province, the people of Soukhoumma district, Champassack province joined forces last month to build a new road. Five kilometers long and eight meters wide, forking from road No 14, the new road took about ten days to complete and funding for its construction came from private donations from people in four surrounding villages. 

The road is a very important link for people travelling from Soukhoumma district to ancient historical sites. People who come to visit Vat Phu in Champassak can now travel there more easily. 
 

CANADA SUPPORTS FOR CATTLE FARM 

The Canadian Ambassador to the Lao PDR, Bernard Giroux, recently announced a grant of US$ 15,000 in support of a smallholder cattle farmer capacity building project in Xieng Khuang province, northern Laos. 

The project will support training and follow-up extension activities designed to increase farmer capacity with regards to producing and using forages for feeding cattle, improving animal husbandry practices, reducing stock inbreeding, and generally improving cattle health. 

This project is not designed to increase cattle production, but is intended to increase the quality of cattle raising for rural farmers so that they can gain maximum benefits from raising livestock without unnecessarily degrading the environment. 
 

  
MALAYSIAN FIRM TO DEVELOP PALM OIL INDUSTRY IN LAOS 

Over the next five years 200 hectares of land in Champassak and Sekong provinces will be developed into palm groves which government officials hope will fuel a new palm oil processing industry for Laos. 

Plans for the experimental oil palm planting project follow the signing on January 19 of` a Memorandum of Understanding (MOU) between the two provinces and Borneokaya Co Ltd of Malaysia. 

According to the details of the MOU, the project will allocate 100 hectares of land in each province for experimental oil palm planting for a period of three to five years. 

The agreement stipulates that the provincial authorities of the two provinces will issue land concession licenses on 100 hectares (with tax exemptions), and will issue a license to establish offices in the provinces to facilitate the project's management. 

Borneokaya Co Ltd will be responsible for all expenditure throughout the life of the project. It will provide the experimental project with oil palm seeds and all necessary materials and vehicles; it will provide the project with foreign experts and technical personnel along with training and upgrading for Lao technical personnel; and carry out soil surveys and the Malaysian firm will soil analysis on an area of 75,000 to 150,000 hectares. 

Results of survey work and analysis will be handed over to provincial authorities, who will then carry out further research and study, data collection and prepare a technical-economic feasibility study in order to eventually set up intensive oil palm plantations in Champassak and Sekong provinces. 

When the experimental project is completed, and it is found that the quantity of harvested palm fruits and quality of palm oil are good, both parties will mutually discuss, negotiate and sign a contract for investment in intensive planting and the setting up of an integrated palm oil processing operation. 

Another agreement was also signed between the Polamaju Company of Malaysia and Borikhamsay province to develop a palm oil industry in the Lao PDR. According to this contract, Polamaju of Malaysia will receive 3,500 hectares land concession for the palm tree plantation in Borikhamsay province. 

In the three years, if the project meets with success the company will increase the land concession to about 11,500 hectares and continue the production of palm oil. 

The project, apart from development in Laos, will also help develop and increase cooperation between Laos and Malaysia. Presently, Laos has increased its joint-venture investments with many foreign companies. The palm oil industry project will bring benefits to the company and also to the Lao government. 
 

  
EU AWARDS LAO GARMENT INDUSTRY WITH GSP 

Garment exporters in Laos have been awarded preferential tariff treatment and the right to export their products free of any quotas to the European Union (EU), following an agreement signed on November 9, 1998 between the EU and Laos and made effective December 9, 1998. Details of the landmark textile and clothing agreement, which extends Generalized System of Preferences (GSP) to domestic producers, were announced on January 20 at a celebration of Garment Exporter Night by the Chairman of the Lao Textile and Garment Industry Group of the Lao National Chamber of Commerce and Industry, Mr. One-Sy Boudsivongsakd. At the meeting, Mr. One-sy informed domestic exporters that the European Union and the Lao PDR had mutually agreed to allow the Lao PDR quota-free entry into Europe for the next three years. 

According to the agreement, the Lao PDR can increase it exports to the EU by up to 450 percent for goods termed "most sensitive", and more than 2000 percent for goods termed "less sensitive"- compared to 1997 export volumes. 

All Lao handlooms, textile handicrafts, hand-made and feet-operated textile products will be exempted from import taxes and quotas. 

The European Commission grants special tariff treatment known as the Generalized System of Preferences on Lao garment products made using 100 percent Lao or European fabrics. It also agreed to grant GSP on unlimited quantities of Lao garment products using fabrics imported from other members of the Association of Southeast Asian Nations (ASEAN), from January 1, 1999 to December 31, 2001. 

Norway, also grants GSP on Lao-made garments using fabrics from ASEAN countries up to September 31, 1999, and is also in process of granting "Derogation" on all garment products using fabrics from other sources of supply. 

Lao garment industry, was a young and fast-growing export sector for the country. Figures for exports jumped from US$47 million in 1993 to US$57 million in 1994 and US$ 87 million in 1995. Garment exports rank third in terms of foreign earnings, after electricity and wood products. 
 

  
US GOVERNMENT DONATES EQUIPMENT TO CARE  

The US government turned over three pumps to the CARE Family Emergency Food Project on January 16. The hand over was made in Champhone district, Savannakhet province. These pumps are in addition to 42 11.5-horsepower water pumps that the US government had donated to the project during the past year. 

Representing the US government at the ceremony was US Ambassador Wendy Chamberlin, also attending the ceremony was US Congressmen Tony P Hall who visited the Lao PDR from January 15-17. The US government provided a US$ 156,000 grant to the project for the purpose of assisting villagers in Champhone and Xaibouly districts who are subjected to chronic flooding and drought. The one-year project has helped to make an additional 336 hectares of land available for dry season rice cropping. The project also distributed 10 tons of rice seeds and 1.5 tons of vegetable seeds for planting. 
 

  
AMERICAN SURGEONS TEAM HELP LAO CHILDREN 

More than 80 children have had their hare lip and cleft palate operated on at the Mittaphap Hospital (Friendship Hospital) by a team of American surgeons from California, the United States of America, who were in Laos on a medical mission over the last two weeks. 
 
“ We were able to operate on a large number of children in a very short time, we have operated on more than 80 children in seven days and we have performed over 120 procedures for children such as hare lip, cleft palate and other special deformities," said Dr. Brett Sayclev, the trip leader. 

This is the second mission that the team of American surgeons has made to Laos under the Interplast Surgery Recontructive Project. The medical team of 15 members also included one doctor from Australia, Dr Zacheria, who specializes in using equalization tubes in the ears. 

The Interplast project performs over 90 per cent of cleft lip and palate re-construction surgery as well as small procedures to help relieve infection in the ears. 

Dr Brett Sayclev explained that the purpose of their trip was to help many children who needed to have cleft lip and palate surgery. 

In the past, he said, the Interplast project has been implemented in 30 countries around the world, including Vietnam, Thailand, Central and South America, India and Myanmar. The purpose of each trip was the same as coming to Laos. 

"We hope we will continue coming to Laos for surgical treatment, and we were very glad to have had the opportunity to work in Laos. Host surgeons and nurses were very helpful," said Dr Brett Sayclev. 

Apart from doing the cleft lip and palate operations, the American surgeons taught both doctors and nurses about caring for children with cleft lip and palate deformities. Nurses also had a chance to listen to Dr Katie Bowles talking about cardiology and trauma treatment. 
The team of surgeons spent eight days for surgical treatment at the Mittaphap Hospital. Next year they will come at the same time because January is a good time, before that it is too hot. 
 

OPIUM REDUCTION EFFORTS IN THE LAO PDR 

The project of Agricultural Development in Xieng Khouang province soon to be carry out. According to the aide-memoir between the government of the Lao People's Democratic Republic and an appraisal mission of the International Fund for Agricultural Development (IFAD), the primary objectives of the project are to alleviate poverty, improve household food and income security of the poor population and enhance alternative opportunities for opium reduction in the project area. 

The project has a time horizon of six years.  It has about 100 target villages, but will eventually have an impact on all 506 villages in the province of Xieng Khouang, the fifth largest opium producing province in the Lao People's Democratic Republic. The project was submitted to the Executive Board of IFAD for approval in December 1998. 

On paper, the US$ 9 million project is financed with an IFAD loan of about US$ 7 million, plus a UNDCP contribution to technical assistance of about US$ 1.1 million and about US$ 1 million from the government and beneficiaries. In reality, the UNDCP cost is zero, because IFAD will finance road construction, approximately equal in cost to the projected the UNDCP contribution to technical assistance, and originally budgeted in a UNDCP project being prepared for Nonghet, a district in the same province. 

The roads for the UNDCP project are now incorporated in the IFAD project, and the IFAD technical assistance package will be included in the UNDCP budget. 

A similar synergetic alliance is being developed with the Asian Development Bank (ADB). In this case, UNDCP does not have a project in the area, but by providing between US$ 2 million and US$ 2.5 million as a micro-project for technical assistance in village institutional development, the UNDCP drug-control objective will be included in a US$ 14.5 million ADB "Shifting cultivation stabilization project" in two districts of Houaphan province. 

UNDP Vientiane has enjoyed excellent cooperation with both financial institutions in project formulation and reviews. Initially, the word opium did not appear in any of the draft project documents, studies and reports. It now figures prominently, with opium reduction included in the objectives and operationally integrated into the large loan projects. Relatively small UNDCP grants make loans from the financial institutions more acceptable to the recipient, and in return UNDCP dramatically expands its area of influence, far beyond what its resources could achieve if it carried on alone, thus providing an example of organizational symbiosis of benefit to all. 

  
GREAT EVENTS AND IMPORTANT DEVELOPMENTS TAKING PLACE IN THE LAO PDR IN 1998 

1998 saw some remarkable events and developments in the Lao PDR, which testified to the continued growth of the Republic in the face of the regional financial and economic crisis, which affected Southeast Asia since its occurrence in 1997. The regional economic recession also challenged the efforts of the country in launching its "Visit Laos Year" in 1999, to attract foreign tourists to its remaining virgin nature and culture as well as the cultures of its different ethnic groups. 

A great political event taking place at the beginning of the year was a change in some government portfolios following the first plenary session of the National Assembly (fourth legislature) which opened in February after the December 1997 general election of deputies to the legislative body. The change included the resignation as President of the Republic of Mr. Nouhak Phoumsavanh, and the election of Mr. Khamtay Siphandone as the new President of the Republic. Mr. Khamtay in-turn passed the post of Prime Minister over to the then vice President of the Republic Mr. Sisavath Keobounphanh. As far as the National Assembly was concerned, the post of President remains with Mr. Samane Viyaketh. 

An important move on the part of the Lao Peoples' Army was the launching of a nationwide campaign for the celebrations of its 50th founding anniversary which will fall on January 20, 1999. 

Shortly after the change in the Government, General Secretary of the Communist Party of Vietnam Le Kha Phieu visited Laos in March to further strengthen the special relations of solidarity and all-round cooperation between the two countries. 

The visit to Brunei by President Khamtay Siphandone in early May and the visit to Laos by the Sultan of Brunei in late May showed the relations between the two countries reaching its high point after Laos became a full member of ASEAN. To further develop the good relationship with Nordic countries, National Assembly President Samane Viyaketh visited Sweden, Finland and Norway, and then stopped in Russia on the way back home. 

In the same month, recognizing the importance of the Information Technology for the social and economic development of the country, the Government decided on the use of the Internet with a decree and a regulation governing the management and use of the information system issued subsequently. 

Laos-European Union relations saw a new era when the two sides signed and ratified a cooperation agreement in their first ever high-level joint committee meeting in June. 

In the economic sector, the Government took several mandatory measures to improve the economy and cope with the impact of the regional financial and economic crisis that forced the devaluation of the national currency, Kip, along with strongly promoting local products. Some of the measures involved introducing ways to solve the financial and monetary problems which led to the tighter control of foreign exchange markets in the country and the issue of the first saving bonds by the Central Bank, which sold over 200 million Kip in one month after their launch in April. In another development, the Central Bank released 2000 and 5000 Kip denomination bank notes and took a move to stabilize the exchange rates by devaluing the Kip. In addition, the State opened stores to sell discount consumption goods in town, which was seen as a move against the rising prices of consumption goods on the market. 

The issue most discussed by the general public during the year was the delayed construction of six main roads in the capital because the road renovation work caused inconvenience in traffic. However, in the last quarter of the year, all the roadwork was speeded up. Meanwhile, praise was heard from the public over the success in building roads to provinces, for example, Road 13, its north section from Vientiane to Luang Prabang, and a part of its south section from Vientiane to Savannakhet. Through the completed Road 13 two sections, travel by car to the two major cities now takes less than eight hours, compared with one full-day previously. 

Bad news in agriculture was that floods hit rice crops in many provinces of the country during the rainy season. However, the Minister of Agriculture and Forestry Dr. Siene Saphangthong said in the conference on agriculture for the northern provinces that the 1998 target for rice output was 1.9 million tons, enough to feed the country. 

Despite the impact of the regional economic crisis, other strategic development projects as well as investment projects also continued. The Mekong Bridge Project in the southern city of Parkse with Japan funding, kicked off at the beginning of the year, while the other Mekong Bridge Project between Savannakhet and Thailand's Mukdahane province was about to begin work after its detailed design study was agreed upon at the end of the year by relevant parties involving Laos and Thailand the beneficiaries, and Japan, who is providing technical assistance and loans for the project. The two bridges will enhance trade and exchange between Laos and her neighbors, Thailand and Vietnam. The Theun-Hinboun Hydropower project, a 210 megawatt capacity project hoped to rise GDP for the country by 7 per cent, was commissioned after five years of construction. Nam Ngiep 1 hydropower project was granted funds by Japan for its feasibility study. A two-year feasibility study on a fifth hydropower dam on Nam Ngum was completed, and the investor, Melkyma Pty. Ltd. of Australia, said the new project would begin in 1999. 

Luang Prabang Airport became an international airport where on-arrival visa service has now been provided for foreign visitors, after the other two entry points in Vientiane, Vientiane International Airport and Lao-Thai Mittaphab Bridge. 

Laos was praised by the US for its concerted efforts in dealing with drug narcotics suppression and trade of illicit narcotics along its borders with neighbors especially Thailand. Many cases of drug trafficking, including heroin, opium and amphetamines, through important ports were detected, and heroin refineries in northern Bokeo province raided by the narcotics police. 

Culturally important for the nation was the presentation in February of the World Heritage status to Luang Prabang city after it was listed as a World Heritage site in December 1995 as the best preserved ancient city in South East Asia. Also of big news in the area of culture was the inauguration of the Cultural Hall Complex Construction Project with the grant aid from the People's Republic of China. 

Some bad news was heard during the first half of the year. Laos was suspended from special no-tariff status under the General System of Preferences from the European Union for its garment exports as the result of the misunderstanding over the issue of copyright and brand names. Royal Air Cambodge suspended its direct flight from Vientiane to Phnom Penh after six months of service starting in June. Another tragedy was the air crash in Xieng Khouang in which all passengers were killed. This news led some foreign missions in Laos to issue a notice banning their nationals from flying on Lao Aviation flights. 

Thc second half of the year saw a number of encouraging signs in socioeconomic development in the country. ASEAN Secretary General Rodolfo Severino visited Laos and Prime Minister Sisavath Keobounphanh visited Vietnam. The US$ 118.7 million Nam Leuk hydropower project disclosed its work completion scheduled for mid-1999. Experts from the International Civil Aviation Organization came to Laos to discuss with Lao official’s issues of safety in the civil aviation industry. National Assembly President Samane Viyaketh visited Singapore. 

The Government established the Lao HIV/AIDS Trust Management Committee to deal with the spread of HIV/AIDS virus in the country. Good news in culture in July was the discovery of 163 ancient Buddha images in Nakhanthoong of Vientiane municipality. More than 600 species of fish, including dolphins, were found in the Mekong rivers and its tributaries, according to a statement by the Minister of Agriculture and Forestry at the ceremony marking National Wildlife Conservation Day in July. Also good news for wildlife protection this year was that an increasing number of hunting guns were handed in to the state authorities in all parts of the country. Along with this, campaigns were launched to conserve wildlife and bio-diversity and to protect forests in various areas over the country. 

Drought hit thousands of hectares of rice crops in central and southern parts of the country following floods in June. An international air terminal built at Wattay Airport with the assistance of Japan was handed over to the Government. Foreign investment in Savannakhet, a major province in the country was up to US$ 52 million. 

Some notable events took place in August. Prime Minister Sisavath Keobounphanh visited Malaysia and Singapore. As a result, Malaysia Prime Minister Mahathir Mohamad pledged to assist Laos and the two Prime Ministers agreed to promote barter trade and payment in local currencies. With Singapore, Prime Minister Sisavath Keobounphanh agreed to join hands in maintaining ASEAN's unity. In the same month, Laos set up diplomatic relations with Ireland. Laos' economic integration with ASEAN was discussed at a forum in Vientiane. Visiting speaker of the Norwegian Parliament said Norway would support the unexploded ordnance program, which received demining equipment from the US government. And more than 45,000 unexploded ordnance were destroyed in the first eight months of 1998. 

A total of 91 full-blown AIDS cases were disclosed at the first meeting of the Lao HIV/ AIDS Trust Management Committee in September. Norway extended the term of the Most Favored Nations status for Laos to export garments. The Asian Development Bank was pleased with the performance of its aid projects in Laos, thus saying that it would strongly support Laos in its economic development efforts. Meanwhile, the World Bank approved an interest-free credit of about US$ 27million for infrastructure projects in the northern provinces of Oudomsay and Phongsaly. 

October began with the opening of the second session of the National Assembly. At the meeting Prime Minister Sisavath Keobounphanh proposed measures to solve the financial and economic problems and to maintain the economic growth rate of 6-7 percent. The meeting heard that the inflation rate would be reduced by 50 percent. Meanwhile, the governor of the Central Bank said while attending the annual meeting of the World Bank and International Monetary Fund in the United States that Laos' economy was also hurt by the regional economic crisis despite its continued growth and that the inflation was at a high level. 

Development in telecommunications continued as French Alcatel won a US $ 22million contract to expand telephone networks in Laos with 58,000 more telephone lines expected in the year 2010. Good news from the Lao Aviation was that the company resumed its international flights after months of suspension for technical reasons. Prime Minister Sisavath Keobounphanh repeated his suggestions to solve the financial problems at a meeting to discuss the implementation of the socioeconomic plan for 1998-99 following the second session of the National Assembly. Vientiane opened a trade fair to promote local production and use of locally produced goods leading up to the annual That Luang Festival in November. 

Laos prepared documents for the submission of Vat Phou stone palace in Champassak to UNESO for endorsement as a World Heritage site, the second in Laos after Luang Prabang. 

Malaysian Syuen Corporation told the local press that its joint venture project to build the US$ 211 million tourism resort in the area of Phou Khao Khouay-Nam Ngum River continued although experiencing some delays. 

Also in November reconstruction of 40 bridges on Route 13 south, the section from Savannakhet to Parkse, started. The government of Norway agreed to grant aid to Laos for the study of the Seset 2 Hydropower project in Saravane province. On the diplomatic front, Laos established diplomatic relations with Georgia. 

Nam Theun 2 took a major step forward when a Heads of Agreement was signed between the Government and the Nam Theun 2 Consortium after meeting with controversies for years. At the end of the year visitors from neighboring countries got the good news that they would be able to pass through international checkpoints by using their existing travel permits in 1999-2000. Similarly, three checkpoints along the Lao-Thai border were made international gateways as the result of the 8th meeting of the joint commission on Lao-Thai cooperation. 

Important events at the end of the year included the visit to Laos by the chairman of the Great Khural of Mongolia (Parliament) and the visit to Myanmar by Prime Minister Sisavath Keobounphanh. The Myanmar visit was followed by the implementation of visa exemption for citizens of the two countries who hold diplomatic and official passports. 

Growth in the local media occurred with Television Channel 5 being put on air. World AIDS Day was celebrated with thousands joining in the walk against AIDS in December. 

Prime Minister Sisavath Keobounphanh brought home from the ASEAN summit in Hanoi, Vietnam, a pledge by Japan's Prime Minister to give Laos about US$ 47 million in aid to promote economic structural adjustment efforts. 

The Government marked the end of 1998 by making a move to overhaul the five large state-owned enterprises, including Phattana Khet Phoudoi Group, Lao Fuel and Lao Aviation. It also reviewed rural development activities at the first nation-wide meeting on the rural development affairs. Secretary General of the International Francophonie Organization Boutors-Ghali, former UN Secretary General, visited Laos. A gift for tourists for New Year 1999 was the opening of the on-arrival visa service in Luang Prabang airport. 
 

  
MANY TOURISTS VISIT LAOS YEAR 

More than 500 tourists arrived in Laos on the first day of the Visit Laos Year 1999-2000. The large contingents of tourists entered Laos through Vientiane International Wattay Airport and the Friendship Bridge. On the first day of January, there were four flights ferried 273 foreign nationals, namely from the United States, Canada, New Zealand, Germany, Britain, Sweden, Italy, Japan, Thailand and Korea. More than two hundred entered into the capital city at the Friendship Bridge. 

According to the record of the Lao embassy in Washington D.C, from the beginning of January to February 25, 1999, the visa office issued more than 2500 visas for tourists. A number of the tourists apply for visas increased compare to last year. Moreover, many tourists mostly from Canada do not apply their visa through the Lao embassy in Washington D.C, because now they can obtain their visa at the Vientiane Airport or at the Friendship Bridge. 
 

  
MORE INTERNATIONAL BORDER CHECKPOINTS FACILITATE TRAVEL FOR VISITORS 

Local border checkpoints continue to be transformed into international border checkpoints, to facilitate travel for tourists from country to country. 

Thai tourists living close to the border can enter Laos on a 15-day travel permit, which can be easily extended by paying the US$ 20 fee at the border. 

Border checkpoints in Xiengngeun district, Luang Prabang province and Kenthao district, Sayaboury province have been opened to make it easier for Thai tourists who want to visit Sayaboury, and Luang Prabang provinces. 

From January this year tourists visiting Laos can also obtain their visa at the airport upon arrival in Luang Prabang. 

The communication and transportation service of Vientiane municipality has also reduced the formalities allowing tourists to drive cars in to the country through the Friendship Bridge.