US, China rivalry a key EAS focus; Pivot turns sour; Asia shake-up as old foes get closer By Hamish McDonald.

Flexible communists to host world leaders

Vietnamese women and children line up to catch a glimpse of US President Barack Obama during his latest visit to Ho Chi Minh City in May.
Vietnamese women and children line up to catch a glimpse of US President Barack Obama during his latest visit to Ho Chi Minh City in May.
Asia-Pacific leaders including our own Malcolm Turnbull find themselves on Thursday in perhaps the most surreal capital of the region, Vientiane, for one of their main annual get-togethers.

Unlike Paul Theroux in 1973, Turnbull will find it easier to get a cold beer than a pipe of opium − your world editor was not offered so much as a sniff of any illicit substance on a visit last month − but he will find it a topsy-turvy place in the way of ideological thinking.

The Lao People’s Revolutionary Party, as the local communists renamed themselves after overthrowing the monarchy in 1975, still run the show. A hammer-and-sickle banner flies alongside the national flag in most places. But the old doctrines of a centrally planned economy and state ownership have been dumped. They can now be viewed in the national museum, in the floor above exhibits of prehistoric relics.

Communist rule began with slow-motion regicide, rather than Bolshevik-style execution in a basement. The former royal palace in Luang Prabang, the resort town in the upper reaches of the Mekong, includes pictures of the last king and his family, with no mention of their confinement in a remote settlement and miserable death of illness and neglect within a few years.

The comrades, who included a figure whom the museum names as “prince” in 1974 and “comrade” in 1975, have proved themselves flexible in a changing world. Their first chief, the late Kaysone Phomvihane, threw the switch to market economics in 1986 and the country has boomed ever since, seeing about 7 per cent annual growth, with only a few interruptions.

Their successors are now turning themselves into a kind of royalty. In January the party’s five-yearly congress installed a new central committee that includes a son of Kaysone, a son and daughter of his successor as party chairman, Khamtay Siphandone, and a son of former prime minister Thongsing Thammavong. Former chairman Khamtay remains at 92 a kind of political godfather. All decisions go to the 11-member Politburo, keeping things tight. “You only have to line one or two pockets,” says one Vientiane political observer.

Political dissent is not advised. The NGO activist Sombath Somphone, caught on a surveillance video being taken away in an unmarked car after being stopped at a police checkpoint in Vientiane in December 2012, has not been seen since. A plane crash in 2014 killed the public security minister and defence minister, one of whom would have approved Sombath’s abduction. But the government declined this opportunity to come clean, and clings to the fiction of a private dispute being the cause of the disappearance.

1 . US, China rivalry a key EAS focus

The 18 leaders attending the East Asia Summit (EAS) will be focused more on strategic rivalry between the United States and China. Not since Laos was singled out as a frontier of the free world by John Kennedy has this little country got so much attention.

Barack Obama will be making the first visit by a sitting US president, continuing a long diplomatic process to rebuild relations after the disaster of the Vietnam War, when the US Air Force dropped more bomb tonnage on the country than the Allies did on Germany in World War II. (He will be pledging more aid in clearing unexploded bombs.)

Laos started as a communist state under Vietnamese supervision. It still looks to Hanoi for political and military guidance, but in recent years has fallen under Beijing’s economic magnetism along with the Cambodian government of Hun Sen, originally installed with Vietnamese military intervention.

The two countries have tended to take China’s corner in the forum, as Vietnam pulled away with other maritime nations in South-East Asia over China’s assertion of claims in the South China Sea. In their warm-up meeting in Vientiane in late July, the foreign ministers of the 18 EAS members could only manage a consensus statement that didn’t mention the elephant in the room, the International Court of Arbitration’s ruling in favour of the Philippines against China’s claims. Julie Bishop held a separate trilateral meeting with John Kerry and Japan’s Fumio Kishida to urge China to respect the ruling.

2 . Pivot turns sour

Now in the final five months of his presidency, Obama will be reflecting that his grand policy for the region, the pivot or the rebalance to Asia, is not looking in good shape.

The Trans-Pacific Partnership, the so-called 21st-century trade agreement that was picked up as the economic arm of the pivot, is stalled in American politics. Donald Trump and Bernie Sanders led a revolt against free trade, and Hillary Clinton has had to follow. She could hardly re-embrace it without substantial modification. A Republican-controlled US senate would be in no mood to give her a win by passing it. But it can be expected that the other TPP members will be asked to return to negotiations, with the Americans now the ones seeking a watering down of its enhancement of corporate power and offering less generous access to their home markets. China, meanwhile, is flooding the Asian region with capital for investment.

The rule of law is not looking so hot in South-East Asia either. The Thai generals have just passed a constitutional throwback to elite rule in a referendum no one was allowed to oppose. The body count after Philippine president Rodrigo Duterte’s green-light for vigilante and police killings of illegal drug sellers and users is hitting 2000. Indonesia’s Joko Widodo has installed former general Wiranto, named as a war criminal by United Nations investigators, as his chief security minister.

3 . Asia shake-up as old foes get closer

Still, Obama can take comfort that America’s best help in South-East Asia might be China itself. Former US sanctions subjects Vietnam and Myanmar and non-aligned Indonesia have got closer to Washington in response to China’s rise.

Even Laos is hesitating, it seems. A clue comes from delays in agreement on a Chinese plan to build a railway linking Vientiane with the southern Chinese city of Kunming. With an extension southwards into Thailand, this would allow trains to run from China to Singapore.

Laos and China signed an initial agreement in 2010 with the idea of completing the 421-kilometre Boten-Vientiane line by last year. But it was not until last December that a sod-turning ceremony was held, and negotiations were still continuing about how much work would go to Laotian contractors and what compensation would be paid for people displaced. In March this year, Somsavat Lengsavad, the Laotian deputy prime minister in charge of the scheme, was saying agreement could be reached in June on a build-own-operate contract, with China putting up most of the required $US7 billion cost.

But Somsavat was on the way out, having been dropped from the Politburo in January. By July he was being ordained a Buddhist monk at a temple in Luang Prabang, according to Radio Free Asia. “He wants to attain mental tranquillity for the rest of his life following his retirement from politics,” the US-financed broadcaster quoted a friend as saying. As seems quite normal for an old communist in Laos.


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This article was first published in the print edition of The Saturday Paper on September 3, 2016 as "Flexible communists to host world leaders".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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