Khamtay's 1998 promotion to the presidency, following December 1997 national elections, represented the second major shift in Lao politics in 23 years. The first occurred in 1991 when Khamtay was promoted to the premiership and Kaysone became president. After the 1991 shake-up, many "old-guard" politicians voluntarily retired and have since died, although hard liners continue to exert influence within the government.
A key and surprising element in the 1998 shake-up was the elevation of Sisavat Keobounphan to the premiership. Sisavat was born in 1928 in the remote northeastern province of Huaphanh. During the 1991–95 period, he gained valuable international experience while serving as minister of agriculture and forestry. Among the nine Politburo members, his rank was number eight. This was primarily as a result of his readmission to the Politburo after having been dropped in 1991. Thus, assuming the premiership and becoming the potential successor to Khamtay represented an extremely impressive political comeback for Sisavat. Strong military credentials were a major factor in his promotion. In 1988, Sisavat played an important role as the military strategist in the border war with Thailand and the negotiator of a successful peace settlement that ended the conflict. He is described as an outgoing, warm person who is practical, decisive, and determined. Sisavat is generally considered to be a conservative leader.
Superficially, it may seem that the changes taking place in Laos mirror those which occurred in Eastern Europe in the late 1980s and early 1990s. Actual political conditions are different in many respects. The success of communism in Laos was primarily as a force of nationalism—to restore national unity, culture, and political independence after decades of revolutionary struggle, while in Eastern Europe communism was "imposed and installed" by the former USSR. Unlike Eastern Europe, a one-party system remains an integral aspect of the political structure.
The Lao leaders have looked to countries such as Singapore, with stable authoritarian governments, as potential models, rather than what they perceived as "chaotic" multiparty systems in countries such as Thailand and Cambodia. Thus, a major challenge for the current leadership is to foster and preserve the distinct political culture of Laos, which involves a fascinating blend of Marxism, free market mechanisms, and strong Buddhist traditions. As 2003 began, there was a new emphasis on the royal history of Laos. Khamtay inaugurated a monument honoring a fourteenth century king of Laos, as if to establish links from that era to his Communist leadership (even though the Pathet Lao had imprisoned the last royal family of Laos). The ancient king, Fa Ngum, may be promoted as a figure for the population to venerate in place of neighboring Thailand's royal family, which is popular in Laos.