Mekong Utility Watch

Arms firm ‘warlord’ removed

South China Morning Post
April 8, 1998

One of the most powerful and enigmatic leaders in Laos has been removed from the head of the country’s biggest firm.  After building up the military development firm Bolisat Phakhana Khet Phoudoi, General Cheng Sayavong is now directing the National Tourism Authority as it gears up for Visit Laos Year 1999.

General Cheng held no formal military or Communist Party post but his rule of the shadowy company saw him control vast areas of central Laos from a huge teak mansion in the mountains at Lak Xao, a tiny outpost he turned into a booming town of 12,000 people.

His new task involves managing the one million foreign tourists Laos hopes to attract on the back of Bangkok’s “Amazing Thailand” campaign, a highly sensitive issue for a country whose hinterland has only just been opened up.

“It is hard to see this as a promotion for him,” one foreign diplomat said in Vientiane. “General Cheng personally controlled a huge area of the country. He was the Government. He was a very new type of leader, like an old-style warlord.

“He would deliver rice to a poor mountain tribal village one minute and then sign a vast logging deal the next.”

It is thought recent internal allegations of embezzlement and corruption have rocked the firm, though no formal action had been taken, diplomats said.

The firm earned the wrath of environmentalists by signing potentially lucrative timber deals with firms from Hong Kong, Japan and Taiwan in some of the region’s most precious forests.

Particularly controversial was a zoo General Cheng was building on the edge of the jungle containing some of Southeast Asia’s most endangered species.

His armed guards control key roads linking the central forests and mountains with the Vietnamese ports of Vinh and Da Nang amid fears the routes had become key opium and heroin trails.

The company also runs a fleet of huge Russian helicopters and landlocked Laos’ only ships – three freighters that ferry lumber to Japan from ports in Vietnam.

In an interview with the South China Morning Post last year, General Cheng dismissed his detractors, saying the firm was working for the “development of the people” rather than for profit.

“We have to help our people to expand and develop . . . we will be going straight down this path,” he said.

This time, neither General Cheng nor company officials could be contacted for comment.

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