Office of the Historian

240. Telegram From the Embassy in Laos to the Department of State1

Vientiane, July 11, 1966, 0930Z.

161. Ref: State circular 4713.2

1.
Believe that two of our recent messages (see Embtel 1371 June 273 and Toaid 2798 June 294) provide background for general conclusion that Laos has made steady improvement on political, economic, and military fronts in past year and half.
A.
Although country remains divided and at war, it has enjoyed relative political stability under leadership of neutralist PriMin Souvanna Phouma.
B.
His armed forces have extended security deep into countryside, permitting programs of rural development to make surprising strides in bringing roads, schools, dispensaries, and agricultural services to Lao villagers.
C.
Under a multilaterally financed program of currency stabilization, value of money has remained relatively stable, allowing urban construction and development to proceed in an atmosphere of increasing confidence.
D.
Despite strains imposed by defense of its territory against North Vietnamese supported subversion and aggression, RLG has been able to focus increasing efforts on problems of long range economic development. It is taking measures to enhance rice production. It is member of Asian Development Bank. It has concluded agreement with IBRD looking toward construction, under international financing, of the Nam Ngum hydro-electric project in period 1967–1971. This project, part of over-all multilateral development plans for lower Mekong Basin, will irrigate significant area of Vientiane Plain and will provide needed electric power to Laos and neighboring Thailand. It is outstanding example of international support for regional development in SE Asia and of international confidence in RLG and its future.
2.
Although end of fighting is not in sight, RLG takes increasing pride in its capacity to contain and to thwart Pathet Lao/NVN aggression and subversion. Armed forces, greatly abetted by a small but efficient tactical air force, have generally good morale and are being by and large efficiently deployed. Defections from enemy ranks have steadily increased during past six months. Refugees continue to flee from enemy held territory strategically situated Meo and other minority peoples increasingly identify their future with that of RLG.
3.
Begin FYI. RLG leaders remain publicly neutral in accordance with their 1962 statement BF neutrality. They have openly condemned, however, NVN violation of that neutrality and privately regard NVN as principal source their troubles. They are therefore profoundly aware that their future is intimately linked with course of war in RVN and have gone so far as privately to authorize unpublicized actions by allied forces against enemy forces in Lao territory. They have taken particular encouragement from evident determination of US and its allies to remain in SVN, and that firmness of purpose, although never publicly acknowledged by RLG spokesman, has more than any other single factor persuaded them that their future is not unreliably bleak. End FYI.
4.
In sum, over past eighteen months there has been moderate progress in Laos which is all the more encouraging since it has been achieved against great odds.
Swank
  1. Source: Department of State, Central Files, POL 2 LAOS. Secret; Immediate; Limdis. Passed to the White House upon receipt at the Department of State.↩
  2. In circular telegram 4713, July 10, the Department of State asked for an assessment of economic, military, and political developments in Asia. (Ibid., POL 2–3 Asia)↩
  3. Document 238.↩
  4. Not printed. (Department of State, Central Files, POL 2 ASIA SE)↩