V IENTIANE - The lucrative timber trade on the Lao-Khmer border is continuing to

have a destablizing influence on relations between the two countries.

In

mid-February the Post reported that more than 100 Lao soldiers were on Cambodian

soil guarding Lao loggers illegally working in Stung Treng province. After

negotiations, the Lao military agreed to leave.

However, sources on the

Lao side admitted that while the military is involved in logging in southern

Laos, their direct participation in illegal logging in Cambodia was

unlikely.

They accused Cambodian timber companies of hiring Khmer army

troops, disgruntled by poor pay and conditions, to guard their illegal logging

operations on Lao soil.

The charges come in the wake of the "total" ban,

from April 30, of log exports from Laos to Cambodia. The ban was one of several

agreements brokered by Foreign Minister Ung Huot in Vientiane in

January.

Observers in Vientiane say the visit was an attempt to improve

Lao-Khmer ties after the uncertainty following the May '93 elections, which saw

the demise of the State of Cambodia - a long-term ally of the Lao

leadership.

This uncertainty culminated last May when, in an unpublicized

decision, Laos introduced strict controls on the largely unregulated traffic

across the 250-kilometer joint frontier.

Official crossing and customs

points were established, entry was forbidden to people without passports or

correct papers, and more troops were deployed along the border to police the new

regulations.

The move, that could only have been done with Vientiane's

backing, was prompted by fears of the ideological threat posed by the new

Cambodian regime, especially the adoption of a multi-party system which Laos has

repeatedly said it would not be following.

It was also an attempt to

isolate Laos from Cambodia's poor law and order situation, including the easy

access to firearms and the continued use of explosives by Khmer fishermen along

the Mekong between Stung Treng and Laos' Champassak province.

Throughout

1994, Vientiane heard stories of Khmer bandits crossing into Laos to rob buses

and cars. Last March Khmer police opened fire on a boatload of officials from

the Tourism Authority of Thailand when they refused to pull over after being

accused of violating Cambodian territory.

This instability is in marked

contrast to the growing economic importance of the area. International donors

have already begun work upgrading Road 13 which runs between Savannakhet - a

possible location for another Mekong River bridge - through Champassak to the

Khmer border.

Thai interests want Champassak to become Laos' southern

business center, a conduit for Thai investment in tourism, agriculture and

mineral exploration.

Vientiane has already approved a private Thai-Lao

joint-venture to build a 500-hectare tourist resort on the Khone Praphaeng

Falls, just six kilometers from the Cambodian border. It has raised considerable

controversy over its plans to include 2,000 room hotels, two casinos, two golf

courses, a zoo, an international airport, and powered by its own 21-megawatt

hydro-power station.

Despite the border crackdown, province to province

relations are said to have improved, with Lao and Khmer authorities coordinating

prevention of illegal entry.

But as the strident accusations of illegal

logging prove, problems between the two nations remain.

As foreign

business interests increase their involvement in Laos, bringing with them a

surge in road construction, loggers are now being allowed to reach pristine and

previously remote stretches of lowland tropical rainforest.

Another

significant factor has been the Lao government's efforts to expand its

hydro-electric generating capabilities, much of it in the south.

A

Memorandum of Understanding was signed last April between Laos and an Australian

concern to build a dam on the Xekaman river, a tributary of the Mekong. A number

of South Korean firms, including Daewoo, have similar agreements for dams on the

Huay Haw waterfall, and the Se Piane and Se Nam Noi tributaries. Large areas of

forest are to be flooded or cleared to make way for the dams and new

roads.

Foreign embassy officials and forestry experts in Vientiane say

this has triggered an unprecedented amount of logging, exported mainly to

Thailand and Cambodia, carried out by Thai, Vietnamese, Korean and Khmer

interests. Much is in partnership with Lao companies, often with the backing of

local military and provincial authorities. The trade had been even heavier in

the last month, they claim, in the rush to meet the April 30 ban.

"The

problem is that many people see the prospect of dam construction, no matter how

vague, as an excuse to begin logging," one said. "The rationale being that even

if in the long-term some of these dam projects do not go ahead, at least they

will profit from the logs."

The situation is even more complex with the

presence of Khmer Rouge guerrillas in Stung Treng.

Known to have been

operating close to the frontier since early last year, the KR were reported to

be key players in the timber trade, using Khmer and Lao companies as fronts to

"launder" timber to Thailand.

The KR's activities are said to be another

reason for Laos' decision to crack down on border traffic, both to stop the log

trade and to prevent Cambodia's civil war from spilling into Laos.

But in

a bizarre twist, local residents of Champassak report that the guerrilla faction

has started a campaign against logging, including using propaganda among

Cambodian villages.

While no clashes have been reported between

guerrillas and government soldiers in the pay of timber merchants, earlier this

year the KR reportedly burnt down a house and saw mill belonging to a prominent

Cambodian timber businessman who was forced to seek safety in Laos.

The

KR may well want to establish local support by making themselves out to be

protectors of the environment. There is also the possibility that it is part of

an ongoing attempt by the KR to wipe out competitors and take total control of

timber exports across the border, to make up for the squeezing of their business

interests on the Thai border.