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Laos - Military Spending

Amid growing defense ties between the two countries, Laos has ordered delivery from Russia of an unknown number of fighter jets and from 20 to 30 army tanks, with sources in Laos saying the purchase will be made with concessions to run mining and other projects in the developing Southeast Asian country. The YAK 130 fighter planes and T-72B White Eagle tanks will be on hand for celebrations of Lao National Army Day on 20 January 2019, sources told RFA’s Lao Service, with one source adding that only four planes were requested at first. “However, we expect that the Lao government will buy more jets,” RFA’s source, an airline official, said.

“The cost of these heavy weapons has not been published yet, but Laos doesn’t pay Russia in cash,” the source added, speaking on condition of anonymity. Also speaking to RFA, a source close to a high-ranking Lao military officer said that the total cost for the planes and tanks will come to “many millions of U.S. dollars, with the Lao government giving Russia the concession of mining and development projects in exchange.”

The Russian Defense Ministry plans opening an office in Laos where experts will provide assistance to the Lao side on the use of Russian-made military equipment, an order published on the official legal information website read. "In order to provide assistance to the Lao side on issues of defense cooperation… [the agreement] aims to create an office of the Russian Defense Ministry in the Lao People's Democratic Republic," an order published on the official legal information website said 26 March 2018.

There is little available information on the defense budget. Laos had the smallest defense budget in Southeast Asia, but it also is one of the region's poorest countries. Since 1975, Laos relied heavily on Vietnamese and Soviet military aid; the loss of this aid by the early 1990s affected military capabilities. Military Expenditure in Laos increased to 23.48 USD Million in 2013 from 22.80 USD Million in 2012. Military Expenditure in Laos averaged 81.07 USD Million from 1992 until 2013, reaching an all time high of 252.23 USD Million in 1994 and a record low of 19.82 USD Million in 2009. In the long-term, the Laos Military Expenditure is projected to trend around 28.00 USD Million in 2020, according to Trading Economics econometric models.

Already in 1950, the United States had signed an agreement to supply economic and military aid to Laos. Since 1951, Civil Air Transport [CAT] had one aircraft and often a second aircraft under charter to ICA (International Cooperation Administration). In December 1954 Laos requested United States credits covering first quarter be opened by December 15 in order to allow time despatch pay and maintenance funds to units in remote provinces by 01 January 1955. French funds for payment troops and purchase food would not be available after January 1 and that if US credits were not forthcoming in time results would be disastrous.

Proposed budget totals 21.6 billion French francs as compared with thirteen billion for calendar 1954. Four principal reasons for increase are: (1) approximately 6,000 of 30,000 Lao forces under arms this year were until October attached to French Union forces and under French Union budget (no figures re 1954 cost these forces available here); (2) projected increase about 1,000 in Lao service forces agreed by Franco-Lao high military committee in October; (3) large projected increase in size gendarmerie (which is to some extent compensated by decline in size commandoes); (4) increased engineering expense for building military installations and for repairs strategic roads and bridges destroyed by war (road repair program to be divided between military and civil authorities with former taking lion’s share because of availability labor); (5) increase size French training mission up to 1,500 (as provided Geneva accord) to compensate in part for withdrawal French Union officer cadres.

Breakdown proposed 1955 budget by main headings follows (in million francs): (1) French training mission 3038; (2) Lao officers pay 397; (3) Lao troop pay 3205; (4) commandoes pay 378; (5) civilian personnel 32; (6) family allowances 424; (7) benefits to dependents of casualties 400; (8) food 3039; (9) clothing 2325; (10) medical 200; (11) transportation costs 265; (12) miscellaneous (including proportionate share expense MAAG Saigon) 82; (13) armament 192 (as compared 613 for 1954); (14) automotive and pool 1302; (15) signal 281; (16) engineer (roads and bridges) 1955; (17) gendarmerie 1270 (compared 294 for 1954); (18) aviation 610 (compared 152 for 1954 since French have turned over several light aircraft to Laos). Approximate strength military forces in 1954 was 31,000 consisting of 13 infantry battalions, 17 light battalions, 40 national guard companies, 25 commandoes, 1 para battalion, 1 para company, 3 transport companies, 6 engineer companies, 2 reconnaissance companies, service, headquarters and signal installations. There is very grave shortage officer cadres. French estimated 9,000 minimum required for present forces (we would estimate much larger minimum requirement), whereas only 800 were available and there was already heavy political pressure to demobilize approximately 300 civil servants holding reserve commissions in forces.

The objectives of the Military Assistance Program for Laos were to assist to the extent practicable in organizing, training, and equipping the armed forces of Laos in order to insure the maintenance of internal security and to provide limited initial resistance to attack by the Communist Government of North Vietnam. The cumulative dollar value of military assistance programed for Laos, as reported in the 1959 budget estimate, was $36.5 million through June 30, 1957. An additional $7.1 million was programed in fiscal year 1958, and $6.6 million was estimated to be programed in fiscal year 1959.

The terms of the Geneva agreement which brought the Indochina war to a close prevented the establishment of a United States Military Assistance Advisory Group in Laos. Instead, the military assistance program was administered by a group known as a Program Evaluation Office (PEO), which is established within the International Cooperation Administration (ICA) economic aid mission in Laos. By 1958 US programs were being developed to assist Laos without adequate knowledge of the forces being supported, the needs of these forces, or the military supplies already delivered to Laos and did not appear always to have been motivated by military considerations. Under the military assistance program, equipment is being delivered to Laos in quantities which cannot be protected or used by country forces. The inability of Laos to support from its own resources United States program objectives, in our opinion, required an informed determination, based on the development of long-range program costs for Laos and the military assistance program world-wide, as to whether these costs were within the resources of the United States to be made available for such purposes.

The Laotian Government was generally uncooperative and refused to permit the United States officials to develop effective means of administering the military assistance program and of supervising and auditing the military budget expenditures of the Laotian Government financed by the United States. United States officials reported that Laos has little prospect of achieving any substantial degree of economic selfsufficiency for many years and that it must be assumed that the entire military budget must continue to be financed by the United States.

The Armee Nationale Laos (ANL) could not function as a coordinated force in the field. In the face of an invasion by hostile forces, coordinated effort would collapse in a few days but it is anticipated that the remnants would continue to harass the aggressor with guerrilla warfare. Defense officials stated that the ANL was weak, poorly trained, and inadequately equipped and that maintenance is at a low level and communications are almost nonexistent.

On 30 June 1958, the American aid to Laos was suspended, because the US Congress had criticized that the Lao Government was unable to see that aid funds were used for the purposes intended, and on 22 July 58, Prince Souvanna Phouma was forced out of office. On 18 August 1958, the right-wing Phoui Sananikone came to power, and in late 1958, the Pathet Lao withdrew to the Plain of Jars. During the Pathet Lao's struggle against the RLG, women - for the most part voluntarily - played a significant role fighting alongside men in combat units. Women also served in a medical corps and as porters for combat units. After 1975, however, the role of women in the armed forces changed significantly. Although not subject to the draft, women are part of the active armed forces but serve only in minor administrative functions. Women do, however, serve in police and militia forces.

As of mid-1994, there were approximately 37,000 persons, or slightly more than 4 percent of the labor force of approximately 1,574,100 males and females between the ages of thirteen and thirty-two, in the military. There was an eighteen-month minimum military conscription draft for males seventeen to twenty-six years. Most draftees serve the minimum time. The ground forces are the primary destination for draftees. The other, smaller services seem to get sufficient numbers of voluntary recruits to fill their ranks.

Life in the Lao People's Army (LPA) is austere. Pay is low, and there is a shortage of uniforms and equipment, including most basic supplies. Consequently, it is not a popular career path for most young Laotian males. In late 1989, LPRP chairman Kaysone Phomvihan complained in a major speech to senior LPA officers that: "Our youths throughout the country have failed to associate with the army and failed to use the army as a school to carry out practices as they were expected to do in the past." Seminars were held in many districts during 1989-90 to discuss requiring local authorities to help enforce compliance with draft laws, which many Laotian youths were actively seeking to avoid.

In the late 1970s and early 1980s, Laos undertook a concerted effort to eliminate internal armed resistance and was preoccupied with a continuous border conflict with Thailand. In the late 1980s and early 1990s, however, a noticeable improvement in the security situation, marked by better relations with its neighbors and a reduced internal security threat from resistance groups, enabled the leadership to reduce the defense budget.

In 1992 military expenditures--which included expenditures for public security--were approximately US$102.2 million, or 11.7 percent of the gross domestic product (GDP). In 1993 military expenditures had increased slightly to about US$104.9 million, approximately 12.4 percent of the US$1.3 billion estimated GDP.

Military Expenditures and Gross National Product