As of mid-1994, Laos had the smallest defense budget in Southeast Asia, but it also is one of the region's poorest countries. Since 1975, Laos has relied heavily on Vietnamese and Soviet military aid the loss of this aid by the early 1990s has affected military capabilities.

There is little available information on the defense budget (see table 16, Appendix). 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 (see The Confrontational Relationship with Thailand , this ch.). 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--see Glossary). 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.

Data as of July 1994