Australia-Laos relations and the need for a broader Indo-Pacific Endeavour

The 2022 edition of Australia’s annual flagship naval initiative, the Indo-Pacific Endeavour (IPE), corresponded with the elevation of bilateral ties with Laos to a Comprehensive Partnership, encompassing enhanced cooperation in key areas such as energy, climate and transnational crime. Apart from its strategic relevance, the move also holds the potential of presenting Australia as an alternative centre of power in Southeast Asia.

The IPE marks a major breakthrough in Australia’s naval strategy from single ship port visits to a Canberra-led multilateral group initiative of safeguarding the envisioned free and open rules based order in the Asia-Pacific region, in congruence with the 2016 Defence White Paper which called for greater engagement in the face of China’s “unprecedented” territorial claims.  While Beijing is listed among the “key partners” with whom cooperation is sought, the adoption of a proactive stance in safeguarding national interests is more clearly illustrated in the 2020 Defence Strategic Update which states that Canberra might resort to “credible military force” for self defence. The Asia-Pacific region in general and the Southeast Asian region in particular forms a crucial part of such  perception, the “centrality” of which is further emphasised by a new outlook that views Australia as a part of Asia.

The most interesting, albeit the most neglected, of Canberra’s engagements in the region remains with Laos. Enjoying an unbroken relationship for seven decades, the mutual decision to elevate the partnership is of huge significance specifically in the light of the latter’s proximity to China, particularly at a time when the relations between Australia and China deteriorate.

What remained a tense relationship for most of history only to be normalised in 1989, China-Laos ties have recently assumed the garb of an “iron brotherhood” with Chinese President Xi Jinping emphasising on personal bonds with Lao’s political elite families such as the Pholsenas. Vientiane’s heavy economic dependence on China, with the total debt exposure to Beijing standing at a stark  64.8% of its GDP, does not just come at a price tag too hefty for the Lao People’s Revolutionary Party government to sustain in the longer run but has also deeply angered the indigenous tribes who bear the direct consequences of environmental degradation and recurrent displacement owing to such infrastructural projects, the most conspicuous being the US$ 6 billion railway project liking Kunming to Vientiane under the BRI.

While the common thread of Communism is often cited as a major reason which makes Laos scoot closer to China, Vientiane has been known to skilfully balance its dependence on Beijing by forging ties with other foreign powers such as Japan, South Korea, ASEAN and even the United States, thus representing a successful case of small state diplomacy in the region which, albeit severely constrained, continues to survive under the shadow of a rising China. Laos’ decision to enhance its engagements with Australia further illustrate such an attitude. In a landlocked nation ridden with poverty, any opportunity that brings in much needed capital to pull it out of the list of least developed countries is greatly welcomed and the IPE can serve the perfect opportunity. The even-year IPEs such as the current edition, focus on capacity building through a greater role of international development agencies. Such a method works better than military endeavours. While the declaration of AUKUS  divided the ASEAN with Laos carefully abstaining from commenting, developmental partnerships such as Canberra’s assistance in combating Covid was greatly appreciated.

China’s heightening naval ambitions as reflected in its security pact with the Solomon Islands and even a harsher stance on South China Sea makes forging close ties with Beijing’s allies such as Laos more significant in order to tone down China’s overt influence on multilateral structures such as ASEAN. Described as more “even handed” in prioritising its national interests over bandwagoning with China, forging a cooperative partnership with Vientiane would be much easier and productive than engaging other nations in Beijing’s camp such as Cambodia. Possessing immense untapped renewable sources of energy such as hydropower, Laos can not just emerge as an important locus of investments and energy generation but might also prove to be helpful in negotiating with China with economic interests at stake. Greater cooperation with Vientiane over illicit trade, drug trafficking and transnational crime would also serve as the bridge to a stable and secure Southeast Asia.

Wary of taking  sides in the throes of US-China rivalry, investment seeking Southeast Asian nations would find a broader and more development-oriented IPE far more comfortable to engage with and a successful development partnership with Laos might prove to be a step ahead in not just easing tensions in the region and ensuring the sustenance of the rules based order but also presenting the possibility of installing multipolarity.

Cherry Hitkari
Cherry Hitkari
Non-resident Vasey Fellow at Pacific Forum, Hawaii. Cherry Hitkari is an Advisory Board member of 'Tomorrow's People' at Modern Diplomacy. She holds a Masters in East Asian Studies specialising in Chinese Studies and is currently pursuing an advanced diploma in Chinese language at the Department of East Asian Studies, University of Delhi, India.