In the cool forested mountains around Ban Cu village, hill tribes are growing opium to sell the government.
That the new communist government buys this opium, presumably for sale abroad, is one of the many signs of the "difficulties and disagreements" that Lao leaders admit are plaguing their economic development program. (SECTION) t"During the war opium was sold abroad," explained Yong Ma Moua, the 60-year old chairman of Ban Cu village and a veteran soldier in the Pathet Lao army. "Now it is sold to the trading department of the provincial government. We trade it for cloth salt and other necessities. Hmong villages all grow opium in Xieng Khouang Province."
For decades, but especially under the encouragement of the American side during the last war, hill tribes here sold opium to pay their troops, providing a main source for international heroin trafficking. One of the first reform pledges of the new communist government was to end this practice and teach the hill tribes to grow other cash crops.
Ban Cu village is an example of the fits and starts of reform in Laos. It has been organized into a cooperative. Land,tools, houses and animals are owned in common. Crops are shared collectively except for one: opium.
"If you grow and sell it, you keep the profits yourself. Some people plant quite a bit, some not so much," Yong Ma Moua said before another Lao official asked him to end the interview.
Before the communist revolution, the economy was funded largely by opium sales and illegal gold trade. "The government has tried to ban trafficking and so Laos has absolutely nothing. Their only chance is to increase agricultural production," said a European adviser.
To that end, Laos has pulled together an experiment that includes ideas from communist and noncommunist countries, a patchwork of programs to make communist and modern development as painless as possible.
There are two market systems. One resembles a Soviet-style government store network where people buy rations of rice, salt, meat and cloth at low, subsidized prices.
The otheris a thriving free market run for the most part by ethnic Chinese and Vietnamese who have stalls filled with vegetables, meat rice and a variety of products from Thailand: plastic dolls, sarongs, canned milk, cigarettes, matches and sandals. Without these markets, the government reasons, more consumers would flee to Thailand.
Twice the government tried impose price restrictions and curtain the markets. Twice the traders shut down and refused to do business at all. The restrictions were rescinded and the traffic across the Mekong River from Thailand to Laos is thriving.
This dual market system is one of the ways Lao leaders hope to ease their country into communism.
"We want the people to accept socialism voluntarily," said one spokesman. "The goods in the government stores are less expensive than in the markets, but we have to learn how to put more goods in the government stores."
Other examples of alternative systems abound: More than two-thirds of Lao farmers still work their private plots while state cooperatives and state farms receive incentives like water pumps and fertilizer donated from overseas. The traditional distribution system run by the ethnic Chinese and Vietnamese still operates while the government attempts to come in the second best with new trucks and bureaucrats.
"Let me give you an example," said an expert of an international organization. "In the old days a ton of drugs would be imported and three-fourths of them would be stolen and sold on the black market. But they would all finally reach the patient.
"Now, the same ton of drugs will arrive, but months late because they come in through Vietnam. By the time they arrive, at least half are spoiled and the rest is put into storage. The instructions are in foreign languages Lao cannot read. Of that half, maybe two-thirds will go to the patient as free medicine. The rest will spoil."
As in most of the tales repeated in Laos, the lesson is not to condemn bad intentions but to point out how uneducated and inefficient the bureaucracy is. All describe the government as a bureaucracy without a leader.
The government's goal is to provide cheap or free essentials to farmers and encourage them to work collectively to improve their yield. At a cooperative farm in the southern province of Champassak, Bun Thavi, a 50-year old farmer, explained how he and 76 other men in his area were persuaded to ban together into a cooperative.
"In 1976 and 1977 we didn't understand what a cooperative was. We didn't join because we were afraid. We thought the buffalos we owned, all of our personal possessions, everything would become the property of the state if we became a cooperative," he said.
"Then we had the drought and flood and some local officials went to the Ministry of Agriculture to study about cooperatives. The officials came back and taught us and we decided to become one. We could grow more together and we would own everything.
"Besides, the government also promised to give us that water pump for becoming a cooperative. It has given us the irrigation canals we needed."
The Lao admit mistakes and say they are willing to change. In his major policy address last February, Premier Kaysone Phomvihan listed "difficulties and disagreements" that have plagued economic plans along with his prescriptions for improvement.
Among the solutions were: Streamline the bureaucracy, simplify complicated policies, improve distribution of goods throughout the country, increase agricultural production, ensure that people understand government plans. It is a wish list that could apply to any developing country, and Laos, one of the poorest and most back war din the world, has not found any magic answers.
At a state farm in Paksong, workers get government salaries and ration cards for local government stores. They own nothing. They said they built their homes, which belong to the state, as do the crops they raise.
All were recent graduates of "reeducation camps," men who were sent for six months to two years to work camps to change their political attitudes and learn how to farm, become carpenters, or basket-weavers.
One graduate said: "I learned that socialism means higher production."
In private and officially montiored conversations with these men, the camps were described as crude farms where inmates spent most of their time raising crops and memorizing political texts. The titles mentioned were: "The Natural Wealth, Prosperity and Culture of Laos," "The Lao People Are Industrious People," "The Criminal Acts of Imperialists" and "The Suppression of Capitalist Classes."
"It was easy for me," explained a 34 year old man who spoke English, who once worked for the U.S. Embassy in Laos and who asked to remain anonymous. "I could memorize quickly and I was released early. I'll probably have to stay at the state farm one year before I can return to my family. I understand what they want from me here. Many people don't and it's very difficult for them."
It is presumed that at least one-third of the 10,000 or more inmates in the camps are trained professionals, working at hard labor alongside top military and political figures of the old regime. They were never charged with crimes - the country has yet to write a constitution - and most have indeterminate sentences.
Through an interpreter, an older man agreed to answer questions about his three years at an isolated reeducation camp in Pong Saly.
Shortly after the change of government in 1975, soldiers came into his office and told him to shut it down. Should he have any questions he should go to the Ministry of Interior, they said. He did, and was sent off to the reeducation camp without explanation.
"I was left on my own at first, to build a house and plant a garden and highland rice," the man said through an intermediary. "I was able to write letters home and I discovered that both my sons had fled to Thailand."
There was little political education. It was almost all work. He said he was rarely guarded because anyone who left the camp was captured and returned immediately by local people. Last January, as China and Vietnam were squaring off and there were worries that trouble would erupt at the nearby northern border, guards came to protect the men from "international reactionaries," meaning Chinese.
Then in early February, along with 400 other inmates the man was taken on a three-week bus tour to Luang Prabang and other cities, then flown to Vientiane where he was released. He plans to remain in Laos, he said, to help the new regime.
But others, failing to see any incentive for remaining in the state bureaucracy and fearing reeducation, have fled country. Many experts place the drain of trained Laos as the number one problem here.
"I don't believe Kaysone thinks that the seven to 10 percent leaving the country is a disaster," said one sympathetic foreign economist. "He wants to create a 'new man.' That is very much emphasized in the way he promotes kindergartens and nursery schools.
"Lao may look gentle now in their communism, but the social transformation which Kaysone envisages is major-not minor."
NEXT: Laos' changing culture. CAPTION: Picture 1, Paksong state farm workers are paid by government; Picture 2, Hill tribesmen in Laos, such as the one above, often still grow opium. By Elizabeth Becker-The Washington Post; Map, No caption, By Dave Cook-The Washington Post; Picture 3, Children from Laos hill tribes play between huts.