Foreign Relations of the United States, 1955–1957, East Asian Security; Cambodia; Laos, Volume XXI

350. Despatch From the Embassy in Laos to the Department of State¹

No. 140

Vientiane, April 6, 1956.

SUBJECT

• Prospects for Laos

The purpose of this report is to assess, in tentative and summary form, the viability and expectations of Laos as an independent nation over the next five years. To do so realistically it is necessary first to have clearly in mind certain basic factors.

[Here follows section I, “Basic Factors,” which included subsections entitled “Demographic and Economic Resources,” “Popular Attitudes,” and “Security Problems.”]

II. Prospects

On the basis of the political, economic and security factors outlined above, one may venture very briefly to forecast probable lines of development in each of these fields over the next five years. Changes will in fact be revolutionary in their implications but, barring a Communist invasion and seizure of power, the backwardness and isolation of Laos may prevent these changes from having a revolutionary political impact within as short a time as five years.

Political

The elite will be multiplied several times, chiefly through recruitment of youth, the older generation responsible for the transition from colonialism to independence will have been largely superseded, and government will be dominated by men in their forties and thirties. It goes without saying that this elite will be strongly nationalistic and resentful of foreign interference, and that they will have taken over much more completely than at present the conduct both of government and business. On the other hand, they should not be xenophobic, unless foreign nations attempt to dominate them or are careless of their susceptibilities. Their orientation, like their education and their trade, will be toward the Free World, but with more emphasis on their Asian neighbors. If Communist pressure has relaxed or assumed more subtle forms, as seems probable, their attitude toward China and North Vietnam will be more friendly but, unless the West treats them very crudely, they will sedulously endeavor to avoid any serious dependence on these too-powerful neighbors.

It is possible that a minority party inspired and financed by the Communists might so successfully infiltrate strategic positions in the administration as to take over the Government, but it is more probable that the attempt to do so would, if the majority of the elite felt themselves backed by the United States and their free Asian neighbors, produce a strong and successful reaction.

It seems improbable in any case that the Lao elite will avoid the coalescence of political forces into a single dominant party, which has characterized most countries in similar circumstances. There is every likelihood that, in order to reduce the political instability so signally exemplified in the political crises of October–November 1954 and February–March 1956, there will be a constitutional reform facilitating the designation of a Government and operating to encourage continuity once the Government is installed. These very reforms, while necessary, may contribute to the monopolistic position of the dominant party. With so backward an electorate and so small an elite, political manipulation is temptingly easy and, once it has been successfully practiced, tends to accumulate behind the triumphant manipulators most of the ambitious elements in the elite. Some of the younger element may resist but it is likely most of them will participate.

It is possible that the Monarchy may be able to play one clique off against the other to the point of preserving an effective and healthy opposition. It seems doubtful, however, that either the Monarchy or the minority cliques are sufficiently strong to compete successfully over the long run. Indeed, a rash indulgence in this technique might merely play into the hands of those leaders of the dominant clique who hope eventually to do away with the Monarchy altogether. As in other countries with an immature electorate, the Army, and to a lesser degree the police, may come to play a substantial, even possibly a predominant, role in these political maneuvers. A struggle among politicians for control of the Army has already begun and the Army may eventually be called upon either to confirm or to block the domination of the major political clique or, alternatively, either to defend or to overthrow the Monarchy.

Economic

As suggested in the first section, the very best that could be hoped for in the way of economic viability would be complete self-sufficiency in foodstuffs, and exports adequate to cover the most essential imports on current account. As to internal revenues, they might suffice for normal civil expenditures, but little or nothing for the army and for investment only a fraction of what would be urgently required.

It would appear, therefore, that even after five years foreign aid would still be needed for whatever army was required, for most investment designed to improve the standard of living and to increase the self-sufficiency of the country, and for imports above a low minimum.

Security

It is impossible to predict what the security situation will be in five years, but there are certain reasonable probabilities. If the regimes of China and North Vietnam remain unchanged, a serious threat, both of invasion and subversion, will continue to exist, whether or not it is being actively exerted at the moment. It can be assumed that, even if the world balance of power rules out an open invasion, the Communists will continue intense and covert efforts to organize and take over from within. Therefore, even if the internal situation is apparently calm and secure, need for a substantial army and police would continue to exist.

On the other hand, two probable developments might well have justified a substantial reduction in the size of the army. First, the problem of the two northern provinces will have been in some degree settled either by reconquest, recovery through negotiation, or de facto separation. Second, the security of Laos from external attack may be more firmly guaranteed, either by a reenforcement of SEATO or conceivably by some East-West arrangements.

Foreign Relations

The essential problem in foreign relations for a small nation so vulnerably situated as Laos is whether to align itself with one or the other of the two great power blocs or to endeavor to remain unaligned and neutral. The latter alternative is for the moment ruled out for Laos since the immediate pressure of the Communist bloc, exerted through its Pathet Lao puppets, leaves Laos no choice save either to succumb or to seek security from the other side. Laos is now as firmly aligned with the Free World as the Geneva Accord permits it to be.

However, the continuance of that alignment depends to a considerable degree on the continuance of two conditions: (1) sufficient military and economic aid and effective military guarantees from the Free World, particularly the United States; (2) persistence of a Communist threat of the present military character. The first condition will presumably be adequately met, though it is probable our guarantees will have to be made more explicit and substantial. If this condition is not met, the Lao leaders may well feel they have to come to terms with the Communists. The second condition, however, may be altered. Pekin and Hanoi may well decide that their present strategy merely throws Laos into the arms of the West. They could easily abandon the Pathet Lao, assume a posture of Panch Shila² and peaceful coexistence, and limit their immediate pressure on Laos to a more subtle form of political and economic penetration. Such a shift would of course be welcomed by most Laotians and would contribute to the latent neutralism which is congenial to the Lao character and consonant with its power position. Alignment with a bloc of the non-aligned would doubtless appeal to many Laotians. It is probable that Laos will veer in the direction of neutralism, but also probable that it will not in the near future veer too far, first because Communist ambitions cannot be completely concealed and second because Laos’ dire and extreme need for foreign aid cannot be satisfied by the non-aligned nations alone. However, it would be a mistake to expect Laos, once the problem of the two northern provinces is settled one way or the other, to stand in the forefront of an anti-Communist military alliance. Therefore Laos is unlikely to join SEATO unless Communist pressure of the current military character persists.

To speak briefly of Lao relations with particular foreign countries, French influence will continue to decline as Laotians are themselves able to assume more responsibilities and French military and economic aid dwindles. Participation in the French Union will probably come to an end. However, a cultural and sentimental attachment to France will remain.

Since Laos will continue to a great degree dependent on United States aid and support, relations with the United States should become even more close and friendly, if the United States behaves with tact and prudence. Should the Americans give the impression they are stepping into French shoes and trying to run the country, or should they attempt to commit Laos too openly to a military posture which the Lao Government would consider rash and provocative, relations would be seriously and perhaps fatally damaged.

Relations with Thailand are almost certain to become closer in every field, unless the Thais should give too crude expression to their ambition to dominate Laos. India can exercise a substantial influence if it chooses to extend political support and economic aid; if it limits its contribution to sanctimonious advice, its interference will be resented. There is almost certain, however, to be a Laotian effort to associate itself more closely with all the free countries of South and Southeast Asia, as a military counterweight to its Communist neighbors and as a political and economic counterweight to an excessive dependence on the West. Nevertheless, if the Communists play their cards cleverly, relations with China and North Vietnam will also be “normalized,” economic and political contacts will be established, and an effort will be made by Laos, within certain limits, to appease and live with the tiger.

Ultimately it will probably become clear, though perhaps not within five years, that Laos cannot exist indefinitely as a wholly independent nation. She is at the same time too hopelessly weak economically and militarily, and too vulnerably close to very powerful and ambitious neighbors. To exist by virtue of subsidies five times her national revenues and by virtue of military pacts created and maintained by Western Powers is a necessary but temporary expedient, not a viable foundation for permanent national survival. The best long-term solution for Laos would be to become a part of a Southeast Asian federation, which would as a whole be economically viable, which would accord its constituents both substantial political autonomy and a common political framework, and which would rely for military security more on a worldwide equilibrium of forces than on local pacts of a military character. There is unfortunately no reason to believe such a federation is likely to emerge in the near future. In its absence closer relations with Thailand will certainly develop, but will be limited by well-founded Lao suspicions of Thai ambitions. In any case, the critical period of transition during which the prime object is to save the area from Communism will doubtless continue for some time, but in the long run Laos can continue to exist independently only as a part of a larger structure.

III. United States Policy and Operations

What conclusions in regard to United States policy for Laos can be drawn from these basic factors and these prospects? Certain would seem to be quite clear.

Independence and Association

The keystones of United States policy toward Laos should be (1) the maintenance of its national independence and (2) its intimate association with international organizations and particularly with its free neighbors in Southeast Asia.

The first of these principles involves the continuance of United States military and economic aid and political support to Laos. This is indispensable. However, it must never be forgotten that the Lao insist on maintaining their independence not only from their Communist neighbors but from the West as well, including particularly the United States. Communist propaganda has succeeded in creating a widespread climate of opinion, particularly marked in Asia, which is highly sensitive to suggestion of “United States domination.” While the United States obviously cannot extend substantial aid without assurance that it is being used for purposes with which we are in sympathy, and that it is not being wasted, our presence, if it is to continue and to be effective, must be characterized by the greatest tact and prudence. We must give no solid grounds for allegations that we are interfering in Lao internal affairs, are dragooning the Lao Government into military pacts against its better judgment, are blocking “peaceful coexistence” with her Communist neighbors, or are expanding our presence and our numbers to a point beyond reason or necessity.

The association of Laos with international organizations has several facets. The closest possible association with the United Nations and all its agencies, as well as the Colombo Plan, is certainly desirable. On the military side, unless Communist military pressure should become more intense than at present, Laos is likely to be best satisfied by its present relationship to SEATO, in which it remains under the umbrella without having openly to participate. It would be counterproductive to endeavor to push the country into SEATO against its will. However, the Lao Government will probably wish to continue to coordinate its military planning with that of SEATO, through the intermediary of the Thais or otherwise, and to assure itself that effective help would be forthcoming in case of serious Communist attack. If it cannot obtain such assurance, not only will its interest in SEATO decline but so will its resistance to Communist blandishments. It behooves the United States, therefore, if we wish SEATO to serve as an effective instrument for maintaining the independence of Laos, to see to it that SEATO military planning is sufficiently precise to reassure the Lao Government that the umbrella would, if the storm broke, actually extend north and east of the Mekong.

In the long run, as suggested above, Laos can find a viable national existence only as a part of some closely knit regional complex, developing in the direction of federation. It should be United States policy to encourage all useful and feasible measures of association, economic, cultural, political and military, among the free nations of Southeast Asia.

United States Military Aid

The United States will throughout the period under review presumably have to continue to assume almost the whole burden of Lao military expenditures. It may also have to find some means of providing greater assurance of continuity in United States military aid. The only alternative to aid of this kind is a total capitulation to Communism, for it can hardly be imagined that a wholly disarmed Laos could resist even the infiltration and subversion which Red China would probably prefer to open aggression.

There is reason to believe, however, that United States military aid can become both more efficient and cheaper. The Geneva Accord now forbids the training of the Lao by United States military personnel; the French training mission is not performing well and, while it may improve somewhat, is unlikely to be fully effective. …

Effective budgetary, fiscal and logistical controls by this Office should in any case result in large savings in the cost of the Lao forces. More important, a settlement of the problem of the two northern provinces, even a thoroughly unsatisfactory one provided it were more or less stable, would permit a reduction of 20 to 40 per cent in the size of the National Army, whose primary mission would remain that of internal security. While such a reduction would not be politically feasible at the present time, it might well become so if there were some relaxation of tension on the Lao frontiers and if economic development could provide employment for those released from the armed services. Large numbers should certainly not be discharged in the absence of available alternative employment.

At the same time, however, funds and technical assistance will have to continue to be provided to build up the police and ancillary organizations to relieve the Army of day-to-day internal security duties.

United States Economic Aid

As indicated earlier in this despatch, substantial foreign economic aid is and will continue to be indispensable to Laos in order (1) to raise the standard of living to the degree necessary to maintain political stability in the face of Communist pressure and (2) to expand local production and exports precisely with a view to reducing dependence on foreign aid.

The primary burden of providing economic aid will continue to fall on the United States. French aid will probably decline, except perhaps in the educational field; Colombo Plan aid may increase slightly but not significantly. For the immediate future direct United States aid under bilateral agreements will be the main reliance of Laos. At present Lao opinion is almost entirely favorable to such aid, despite Communist propaganda. However, we must anticipate that Lao opinion will become increasingly sensitive, as has opinion elsewhere in Asia, to accusations of “American domination.” This is particularly true since the extreme dearth of indigenous technicians and administrators in Laos make it necessary to bring in relatively large numbers of foreign experts to carry out any significant economic program. Furthermore, with United States aid constituting such a very large proportion of the national income, there will be increasing allegations, often well founded, that it is being diverted, misappropriated or wasted, and that it is benefiting a corrupt clique rather than the mass of the people. If this impression becomes general, our aid will become a cause of anti-American rather than pro-American feeling. Three precautionary measures on our part therefore seem prudent.

• First, we must insist that adequate controls are exercised by the Lao Government, with our assistance, to ensure that the bulk of our aid does reach and benefit the people and that only an irreducibly small proportion is diverted or wasted. We must also see to it that the Lao people are made aware of the character and extent of our aid, though in this respect we must take care once more not to be too conspicuous. Finally, we should endeavor to draw very nicely the line between, on the one hand, preventing the governing elite from appropriating the lion’s share of United States aid, and, on the other, denying them such share in the rising prosperity as will secure them a personal vested interest in the maintenance of Western aid and pro-Western policies.
• Second, we should encourage other countries and United Nations agencies to increase their aid to Laos, and particularly to contribute to the Lao need for foreign technicians. In this latter connection, since lack of housing is often the principal obstacle to the despatch of such technicians to Laos, we should with United States aid funds provide housing for such non-United States personnel. In any case the natural tendency of all United States agencies in Laos, to increase their staffs in order to deal with pressing problems, must be restrained in the broader interest of not provoking a political reaction to a too overwhelming American presence.
• Third, though in this case aid to Laos must fall into a global or an “underdeveloped country” pattern, it is likely to prove advantageous to the United States in the near future to contribute to the establishment, financing and operation of a new international economic agency, in which, as with the OEEC in Europe, the recipient nations will participate and enjoy a sense of partnership, and which will permit the essential political and economic stabilization of these nations on terms which they can accept without loss of dignity or independence. While the United States will lose some degree of control over the disposition of the funds it contributes in this way, it will probably prove in the long run that only such an organization will be able effectively to counter the new Communist economic drive into the uncommitted, and even many of the hitherto committed, nations.

Summary

In summary, United States policy and operations in Laos should be governed by the following principles:

1. If Laos is to maintain its independence, the United States must continue for a period of years (a) to bear the main burden of military and economic aid, which will remain for some time relatively large, and to assure the Lao Government of its intentions in this respect, and (b) to provide, within or outside the framework of SEATO, an explicit and effective guarantee of Lao security against external attack.

2. Despite these responsibilities and burdens, the United States must display the greatest discretion in the manner in which its aid is administered and its influence exercised. It must, while ensuring to the best of its ability that its aid is not diverted or wasted, neither intervene overtly or crudely in Lao internal affairs nor make its presence too conspicuous by flooding this small country with an inordinate number of American advisers. The United States must increasingly exercise its influence, not by using military and economic aid as a means of pressure, but by creating a feeling of common interest and partnership, among the Lao people as a whole through information programs and judiciously selected economic projects, but more particularly among the young elite through political and social cultivation and through cultural and educational exchange.

3. In order further to ensure that its presence does not become conspicuous, irritating and eventually unwelcome, the United States should encourage to the fullest extent political, military and particularly economic aid to Laos by other countries and by United Nations agencies, and should increasingly channel its own aid through existing or new multilateral organizations in which there is substantial Asian participation.

4. Our long-term political objective in Laos should be its increasingly intimate association with its free neighbors in Southeast Asia, the ultimate goal being a federation of the nations of this region. With this end in view, it should be our particular care to foster increasing cooperation of Laos in the economic and political, and where appropriate in the military, fields with Thailand, Cambodia, South Vietnam, the Philippines, Burma and Malaya.

Action Requested

Department please pass copies of this despatch to Embassies Bangkok, Saigon, Phnom Penh and Paris, and five copies to Embassy Vientiane.

Charles W. Yost

1. Source: Department of State, Central Files, 751J.00/4–656. Secret. Drafted by Yost. Young suggested to Sebald that he read this “outstanding despatch”, according to a memorandum from Young to Sebald, May 7. The following marginal note by Sebald was written on Young’s memorandum: “This is an excellent despatch and could be used as a ‘bible’ for conducting our affairs in Laos. WS” (Ibid.)
2. Apparent reference to the Pantja Sila, or Five Principles, which were first set forth by President Sukarno of Indonesia in a speech of June 1, 1945, as nationalism, representative government, internationalism or humanitarianism, social justice, and belief in God. See The Birth of Pantjasila: An Outline of the Five Principles of the Indonesian State (Djakarta: Department of Information, 1960).