Economy of Laos
Overview
The government of Laos, one of the few remaining official Communist states, began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% per year in 1988-2006 except during the short-lived drop caused by the Asian financial crisis beginning in 1997.
Despite this high growth rate, Laos remains a country with a primitive infrastructure. It has no railroads, a rudimentary road system, and limited external and internal telecommunications, though the government is sponsoring major improvements in the road system with possible support from Japan. Electricity is available in only a few urban areas. Subsistence agriculture, dominated by rice, accounts for about half of GDP and provides 80% of total employment.
The economy will continue to benefit from aid by the IMF and other international sources and from new foreign investment in hydropower and mining. Construction will be another strong economic driver, especially as hydroelectric dam and road projects gain steam. Several policy changes since 2004 may help spur growth. In late 2004, Laos gained Normal Trade Relations status with the US, allowing Laos-based producers to benefit from lower tariffs on exports.
Laos is taking steps to join the World Trade Organization in the next few years; the resulting trade policy reforms will improve the business environment. On the fiscal side, a value-added tax (VAT) regime, slated to begin in 2008, will streamline the government's inefficient tax system.
GDP
Real Growth Rate
8%
Per Capita
USD 2,200
From Agriculture
43%
From Industry
31%
From Services
26%
Labour Force
Available for Work
Unknown
Working in Agriculture
80%
Working in Industry
20%
Working in Services
0%
Unemployment Rate
0%
Population Below Poverty Line
31%
Inflation Rate
7%
Investment as Percent of GDP
0%
Budget
Revenues
USD 392 (m)
Expenditures
USD 541 (m)
Public Debt
US$ 3179.00 (m)
Agricultural Products
Sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle and poultry.
Core Industries
Copper, tin, and gypsum mining; timber, electric power, agricultural processing, construction, garments, tourism and cement.
Exports
Value
USD 655 (m)
Commodities
Garments, wood products, coffee, electricity and tin.
Partners
Thailand 41%, Vietnam 9.7%, China 4.1%, Malaysia 4% (2006)
Imports
Value
USD 922 (m)
Commodities
Machinery and equipment, vehicles, fuel and consumer goods.
Partners
Thailand 68.8%, China 11.3%, Vietnam 5.5% (2006)
External Debt
USD 3,179 (m)
Fiscal Year
1 October - 30 September
