revenue--the sale of electric power to Thailand--will decrease. Electric power demand in Thailand will continue to increase in the future, and the demands of Vietnam and Cambodia are also expected to expand. On the other hand, Laos intends to export electric power to China or Myanmar for the future development of Laos. The construction of the Second Nam Ngum Dam is becoming a substantial project. The Second Nam Ngum Dam (Nam Theun 2) was supposed to have been a development project of a large scale hydroelectric power station with 600 megawatt output (four times the Nam Ngum Dam). Because of problems with the large construction costs (estimated around 500 million dollars) and poor negotiation with the customer (Thailand), this project has been suspended after a pre-feasibility study in 1987. Now, it is observed that an Australian consultant has committed to revising the F/S, including a reexamination of the possibility of fund raising. When Prime Minister Chuan (Thailand) visited Laos in 1993, both countries exchanged a memorandum in which both countries will advance mutual cooperation to expand the electric power capacity up to 1500 megawatts by the year 2000. The present capability is only 165 megawatts. Achievement of the goal with Thailand has tremendous difficulties, including both quality and quantity of the staff: severe restrictions regarding electric power development; and the exceedingly long periods of negotiation among the resulted ministries over policy. Also, cooperation in the private sector over development of electric power is not expected. The most important thing for energy development in all of Indochina is to establish basic conditions which should compare the cost-benefit of the construction, technology transfer, management of energy supply system and environmental protection. After Laos builds up enough electric power capacity, Laos can take a strong position in price negotiation through an expanded customer base. Laos may be able to gain leverage over its neighbors through the use of electric power as a weapon.

## 3 -3-2 Forest and Agriculture Sector

## (1) Present Conditions of Rice Production

The area seasonal rice paddies that depend almost wholly on rain water accounts for 16 percent of the total rice field in the northern part, and 50 percent in the southern part. On the other hand, the irrigated dry season farming paddy fields concentrate around Vientiane. The area of slash-and-burn upland rice accounts for 74 percent, a high rate in the northern part. Production share among the yields of raining season paddy, dry season paddy and upland rice, are 68 percent, 1 percent and 31 percent respectively, up to 1984. After that the rate of upland rice decreases. However the area under cultivation of upland rice accounts for 40 percent of total rice fields.

## (2) Agriculture Items

Glutinous rice accounts for more than 80 percent of all rice in Laos. The only noteworthy agricultural product besides rice and timber is coffee. Diversification of products is advanced in the northern mountainous districts that are short of rice, but in the middle-southern district tobacco is virtually the only crop. In the mountainous areas agriculture development including settlement is very underdeveloped.

## (3) Irrigation

Around 50 percent of irrigated fields are concentrated in the Vientiane area. Irrigation