On the outskirts of this out-of-the-way capital, carpenters and road builders are racing to complete an ambitious complex of pavilions, review stands and parade grounds that, even half-finished, looks like an Asian rendition of Moscow's Red Square.

The complex will be stage center Tuesday for national day celebrations of the Lao People's Democratic Republic, as this Southeast Asian country, about the size of Oregon, is now officially known.

For nearly a quarter century, the United States fought to block a take-over by the indigenous Pathet Lao Communists. That struggle came to an end five years ago when the Pathet Lao, with support from Vietnam, took full control of the government.

Today the city's parks are being trimmed, its temples repainted, potholes filled. Work on a new museum honoring the Laotian revolution proceeds under floodlights after dark.

It is all intended to demonstrate that Laos is repairing the damage of war and pulling its 3.4 million people out of poverty that ranks the country last on World Bank rosters. Per capita income in 1978 was $90 per year.

The facts of the matter are far more complex. Premier Kaysone Phomvihan is wrestling with the same questions that have bedeviled Laos throughout its history: how to unify and develop a mountainous country composed of 68 ethnic groups -- none a majority -- surrounded by larger, often hostile neighbors. The victory of the Communists has done nothing to change this situation.

Laos' continuing links with Vietnam and the Soviet Bloc are visible everywhere. Soviet technicians drive jeeps through the streets.In rural areas about 40,000 Vietnamese troops build roads and guard against scattered attacks by rightist guerrillas.

While Laos receives unspecified but clearly large sums of economic and military aid from such "friendly socialist countries," these ties have created mistrust by neighboring Thailand and China.

In July, Thailand closed its 900-mile border with Laos. With food and fuel imports thus curtailed, prices rose rapidly in Vientiane. Aid projects came to a halt as equipment en route to Thailand reached the Thai banks of the Mekong River, the border, and was shunted into storage.

Ostensibly Thailand made its move to protest a shooting incident on the Mekong. But many diplomats assumed that it was intended more as a jab at Vietnam, whose troops had crossed into Thailand from Cambodia the month before and briefly occupied several villages.

The presence of Vietnamese forces in Laos has also led Thailand to turn a blind eye on rightist guerrillas that operate from refugee camps in Thailand. The Chinese, meanwhile, suspended aid, calling home road-building crews in the northwestern provinces and coaches for sports teams and technicians in Vientiane.

Some Indochina analysts believe that if China decides to deliver up a "second lesson" to Vietnam to follow up its month-long incursion in early 1979, it might strike this time into Laos.

Thus Laos has not yet escaped from the disputes of its neighbors. But even if it achieved complete conciliation with them, it would remain a nation-builder's nightmare.

Mountain tribes has historically resisted control by the lowland Lao, who form about 40 percent of the population. The service of many tribesmen in anticommunist armies supported by the U.S. CIA in the 1960s and 1970s has served to amplify distrust in many areas.

Official government goals are to educate citizens about the customs of various ethnic groups but to stress that all belong to a greater Laotian nation. "The Lao and the hill people are working together these days," a student from Xieng Khouang Province said.

Domination by ethnic Lao, however, continues as the unspoken policy. Premiet Kaysone and President Souphanouvong are both Lao. Their party's Central Committee contains only a sprinkling of hill people -- a pattern that could bode ill for the Communists' future.

Where hill people have resisted integration, Laotian and Vietnamese troops have responded with ground sweeps, air strikes, and artillery bombardment. Many refugees crossing into Thailand have made detailed charges that toxic gas is being used against entire villages.

Equally difficult in the task of ethnic integration is gaining the acceptance of about 2 million people who lived in areas that were controlled by the former anticommunist government. That is now known as the "new liberated zone."

Around the country, people sit down to "seminars" -- political study courses organized in schools, Buddhist temples or government offices. Perhaps 20,000 people were considered too corrupted for this approach and were sent off to primitive labor camps in rural areas.

Diplomatic sources say several hundred people, including a senior planning official, were arrested in September and October. By some accounts, the government said they were in collusion with China. Other versions said suppression of "social misfits" takes place annually before national day. Those arrested are believed to be in reeducation camps.

The London-based human rights group Amnesty International recently noted that a senior Laotion official had said 10,000 to 15,000 people had been sent to such camps since 1975. Some observers place the number far higher.

Periodically inmates are freed, often to slip across to Thailand almost immediately.

Political education, the government hopes, eventually will produce a citizenry fired with the dedication and obedience found in a 20-year-old student encountered strolling the banks of the Mekong one evening.

A native of Xieng Khouang Province in northern Laos, he did not flee to refugee camps despite massive bombing by U.S. aircraft between 1964 and 1973. "Many times they shot at us in our holes," he said, "but they never got me. I've known the sounds of bombing since I was a small child."

People who crossed to Thailand, visible half a mile from where he stood, were simply "evil." He scolded another young man who interjected a disparaging comparison of the Soviets to the Americans into the conversation. d

Two months ago he flew to Vientiane to continue his studies at a city high school. After graduation he would gladly serve in "any job, wherever the nation needs me." While these words were spoken with conviction, thousands of his fellow citizens would find such sentiments laughable, and therein lies the government's greatest challenge.

In the city, resistance to the new ways continues. Teen-agers still favor Western pop music over the revolutionary songs that government radio offers. Black markets thrive while unsalable goods from Eastern Europe pile up on the shelves of state retail stores.

Some refugees have said they left due to political persecution. But today most seem to cite economic stagnation, believing life will be easier abroad. Many government employes, for instance, are paid around $30 a month. An East German denim work suit costs $32 in a state store.

Although it is fairly rich in natural resources, the country lacks equipment and capital to exploit them. It has no railroads. Many of its "highways" are dirt-surfaced tracks impassable during the rainy season.

The realities of the economy are far from the utopian scene depicted on Laos' national emblem. It crowds together a superhighway, steam shovel, hydroelectric dam and rows of bountiful rice paddies.

Ironically, the national day preparations now so visible in Vientiane are delaying realization of that dream.Earthmoving equipment from a vital irrigation project north of Vientiane has been diverted to build the parade grounds; student and government officials are distracted by long hours of practicing close-order marching for the big day.

But for the moment, the government appears to feel that raising the national spirit is the priority task. Like their counterparts in Vietnam and the Soviet Union, Laotian leaders argue that anything can be accomplished once the citizens are mobilized.