Economy of Laos

The economy of the Lao People's Democratic Republic is rapidly growing, as a result of decentralized government control and encouragement of private enterprise since 1986.[6] Currently, Laos ranks amongst the fastest growing economies in the world, averaging 8% a year in GDP growth.[7] It is also forecasted that Laos will sustain at least 7% growth through 2019 as well.[8]

Key goals for the government includes pursuing poverty reduction and education for all children, also with its initiative to become a "land-linked" country. This is showcased through the ongoing construction of the nearly $6 billion high-speed rail from Kunming, China to Vientiane, Laos. The country opened a stock exchange, the Lao Securities Exchange in 2011, and has become a rising regional player in its role as a hydroelectric power supplier to neighbors such as China, Vietnam and Thailand. In the current period, the economy of Laos relies largely on foreign direct investment to attract the capital from overseas to support its continual economic rigorousness.

Despite rapid growth, Laos remains one of the poorest countries in Southeast Asia.[9][10] A landlocked country, it has inadequate infrastructure and a largely unskilled work force. Nonetheless, Laos continues to attract foreign investment as it integrates with the larger ASEAN Economic Community, its plentiful, young workforce, and favorable tax treatment. The country's per capita income in 2016 was estimated to be $5,700 on a purchasing power parity-basis.[11]

Economy of Laos
Vientiane Patouxai Laos
CurrencyLao Kip
1 October–30 September
Trade organizations
ASEAN, WTO
Statistics
GDP
  • Increase $18.434 billion (nominal, 2018 est.)[1]
  • Increase $53.701 billion (PPP, 2018 est.)[1]
GDP rank
GDP growth
7.0% (2016) 6.9% (2017)
6.5% (2018e) 6.6% (2019f)[2]
GDP per capita
  • Increase $2,720 (nominal, 2018 est.)[1]
  • Increase $7,924 (PPP, 2018 est.)[1]
GDP per capita rank
GDP by sector
2.040% (2018)[1]
Population below poverty line
22% (2013 est.)[3]
36.4 medium (2012)[4]
Increase 0.601 medium (2017) (139th)
Labor force
3.582 million (2017 est.)[3]
Labor force by occupation
UnemploymentSteady 0.7% (2017 est.)[3]
Main industries
Copper, tin, gold, and gypsum mining; timber, electric power, agricultural processing, rubber construction, garments, cement and tourism
Decrease 154th (2019)[5]
External
ExportsIncrease $3.654 billion (2017 est.)[3]
Export goods
wood products, electricity, coffee, tin, copper, gold and cassava
Main export partners
ImportsIncrease $4.976 billion (2017 est.)[3]
Import goods
machinery and equipment, vehicles, fuel, consumer goods
Main import partners
FDI stock
Increase $15.14 billion (31 December 2012 est.)[3]
Increase −$2.057 billion (2017 est.)[3]
Negative increase $14.9 billion (31 December 2017 est.)[3]
Public finances
Negative increase 63.6% of GDP (2017 est.)[3]
−5.5% (of GDP) (2017 est.)[3]
Revenues3.099 billion (2017 est.)[3]
Expenses4.038 billion (2017 est.)[3]
Economic aid$0.4 billion (1999 est.)
Foreign reserves
Increase $1.27 billion (31 December 2017 est.)[3]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Economic history

With the overthrow of the Laotian monarchy in 1975, the Pathet Lao's communist government instituted a planned socialist economy of the Soviet-style command economy system, replacing the private sector with state enterprises and cooperatives; centralizing investment, production, trade, and pricing; and creating barriers to internal and foreign trade.

Seizure of power by the communists also resulted in a withdrawal of mainly American external investment, on which the country had become greatly dependent as a result of the destruction of domestic capital during the Indochina Wars.[12]

Within a few years, the PDR Lao government realized these types of economic policies were preventing, rather than stimulating, growth and development. No substantive reform was introduced, however, until 1986 when the government announced its "new economic mechanism" (NEM). Initially timid, the NEM was expanded to include a range of reforms designed to create conditions conducive to private sector activity.

Prices set by market forces replaced government-determined prices. Farmers were permitted to own land and sell crops on the open market. State firms were granted increased decision-making authority and lost most of their subsidies and pricing advantages. The government set the exchange rate close to real market levels, lifted trade barriers, replaced import barriers with tariffs, and gave private sector firms direct access to imports and credit.

With the growing unrest in Eastern Europe and the Soviet Union, in 1989, the PDR Lao government reached agreement with the World Bank and the International Monetary Fund on additional reforms. The government agreed to introduce fiscal and monetary reform, promote private enterprise and foreign investment, privatize or close state firms, and strengthen banking. In addition, it also agreed to maintain a market exchange rate, reduce tariffs, and eliminate unneeded trade regulations. A liberal foreign investment code was enacted and appears to be slowly making a positive impact in the market. Enforcement of intellectual property rights is governed by two Prime Minister's Decrees dating from 1995 and 2002 [1].

In an attempt to stimulate further international commerce, the PDR Lao government accepted Australian aid to build a bridge across the Mekong River to Thailand. The "Thai-Lao Friendship Bridge", between Vientiane Prefecture and Nong Khai Province, Thailand, was inaugurated in April 1994. Although the bridge has created additional commerce, the Lao government does not yet permit a completely free flow of traffic across the span.

These reforms led to economic growth and an increased availability of goods. However, the 1997 Asian Financial Crisis, coupled with the Lao government's own mismanagement of the economy, resulted in spiraling inflation and a steep depreciation of the kip, which lost 87% of its value from June 1997 to June 1999. Tighter monetary policies brought about greater macroeconomic stability in FY 2000, and monthly inflation, which had averaged about 10% during the first half of FY 1999, dropped to an average 1% over the same period in FY 2000.

In FY 1999, foreign grants and loans accounted for more than 20% of GDP and more than 75% of public investment.

The economy continues to be dominated by an unproductive agricultural sector operating largely outside the money economy and in which the public sector continues to play a dominant role. Still, a number of private enterprises have been founded and some are quite successful in industries such as handicrafts, beer, coffee and tourism. With United Nations, Japanese, and German support, a formerly state-controlled chamber of commerce aims to promote private business: the Lao National Chamber of Commerce and Industry and its provincial subdivisions.[13]

Agriculture

Agriculture, mostly subsistence rice farming, dominates the economy, employing an estimated 85% of the population and producing 51% of GDP. Domestic savings are low, forcing Laos to rely heavily on foreign assistance and concessional loans as investment sources for economic development.

Agricultural products include sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle, poultry.

In mid-2012, the Laos government issued a four-year moratorium for new mining projects. The reasons cited were environmental and social concerns relating to the use of agricultural land.[14]

Tourism

Tourism is the fastest growing industry in the economy and plays a vital role in the Lao economy. The government opened Laos to the world in the 1990s, and continues to be a popular destination amongst tourists.[15]

Other statistics

GDP: purchasing power parity - $14.2 billion (2009 est.)
Exchange rate - kips (LAK) per US dollar - 8,556.56 (2009), 8,760.69 (2008), 9,658 (2007), 10,235 (2006), 10,820 (2005)

  • Oil - production:
0 bbl/d (2009 est.)
  • Oil - consumption:
3,000 bbl/d (480 m3/d) (2009 est.)
  • Oil - exports:
0 bbl/d (2007 est.)
  • Oil - imports:
3,080 bbl/d (490 m3/d) (2007 est.)

Of the total foreign investment in Laos in 2012, the mining industry got 27% followed by electricity generation which has 25% share.[14]

References

  1. ^ a b c d e "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 19 June 2019.
  2. ^ ""Managing Headwinds" East Asia and Pacific Economic Update (April 2019) p. 109" (PDF). World Bank. Retrieved 19 June 2019.
  3. ^ a b c d e f g h i j k l m n o p q "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 19 June 2019.
  4. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 19 June 2019.
  5. ^ "Ease of Doing Business in Lao PDR". Doingbusiness.org. Retrieved 19 June 2019.
  6. ^ "Laos".
  7. ^ "The World Factbook — Central Intelligence Agency". www.cia.gov. Retrieved 2017-02-11.
  8. ^ "Bloomberg Briefs". newsletters.briefs.bloomberg.com. Retrieved 2017-02-11.
  9. ^ Philip, Bruno (6 November 2012). "Laos, south-east Asia's new emerging economy". The Guardian. London.
  10. ^ http://www.marketwatch.com/story/laos-marks-first-day-trade-in-new-exchange-2011-01-11
  11. ^ "The World Factbook — Central Intelligence Agency". www.cia.gov. Retrieved 2017-02-11.
  12. ^ Baten, Jörg (2016). A History of the Global Economy. From 1500 to the Present. Cambridge University Press. p. 297. ISBN 9781107507180.
  13. ^ 8km.de, LNCCI
  14. ^ a b "Vietnam leads investment in Laos". Investvine.com. 2013-02-26. Retrieved 2013-04-03.
  15. ^ Slade, Maria (9 January 2011). "Stray-ing into Laos". The New Zealand Herald. Retrieved 11 September 2011.

External links

ASEAN–China Free Trade Area

The ASEAN–China Free Trade Area (ACFTA), also known as China–ASEAN Free Trade Area is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China.

B. Home Phanh

B. Home Phanh is a small village along Highway 6A in the South Asian country of Laos, settled near the border between Laos and Vietnam, with around 20-120 residents.

Bank of the Lao P.D.R.

Bank of the Lao P.D.R., located in Vientiane, is the central bank of Laos. It is also the bank of last resort, controlling the money supply, managing the country's reserves, and supervising the commercial banks operating in Laos.

The bank is managed by an Executive Board, a Governor and a Deputy Governor. The current Governor is Somphao Phaysith; the Deputy Governor is Bounsong Sommalavong.

The Bank of Laos was formed on October 7, 1968 and has been since operating in the country's capital.

CIA activities in Laos

CIA activities in Laos started in the 1950s. In 1959, U.S. Special Forces began to train some Laotian soldiers in unconventional warfare techniques as early as the fall of 1959 under the code name Erawan. Under this code name, General Vang Pao, who served the royal Lao family, recruited and trained his Hmong soldiers. The Hmong were targeted as allies after President Kennedy, who refused to send more American soldiers to battle in Southeast Asia, took power. Instead, he called the CIA to use its tribal forces in Laos and "make every possible effort to launch guerrilla operations in North Vietnam with its Asian recruits." General Vang Pao then recruited and trained his Hmong soldiers to ally with the CIA and fight against North Vietnam. The CIA itself claims that the CIA air operations in Laos from 1955-1974 were the "largest paramilitary operations ever undertaken by the CIA."For 13 years, the CIA directed native forces against North Vietnamese forces to a standstill. The CIA organized the Hmong tribe to fight against the North Vietnamese-backed Pathet Lao. The Pathet Lao were the communists in Laos. The CIA-backed Hmong guerrillas used Air America to "drop 46 million pounds of foodstuffs....transport tens of thousands of troops, conduct a highly successful photo-reconnaissance program, and engage in numerous clandestine missions using night-vision glasses and state-of-the-art electronic equipment." This was the largest paramilitary operation in which the CIA participated, spanning 13 years. The CIA was responsible for directing natives of Laos to fight the North Vietnamese. Although such efforts proved ultimately a failure, the CIA nonetheless still boasted of helping the people of Laos combat the communist threat.They saw it as a victory and as an accomplishment. The director at the time, Richard Helms, called it superb and discussed the amount of manpower required, and that the CIA did a good job in supplying it.

Along with its humanitarian efforts, the CIA also conducted a massive bombing effort in Laos from 1964-1973. 580,000 bombing missions took place over the nine-year campaign, but it is not known how many of them were dropped by the United States Air Force and how many were dropped by the CIA. For the CIA, this was the largest paramilitary operation they had to date. By the summer of 1970 the CIA owned airline Air America had two dozen twin-engine transports, two dozen STOL aircraft and 30 helicopters dedicated to the operations in Laos. This airline employed more than 300 pilots, copilots, flight mechanics, and airfreight specialists flying out of Laos and Thailand. Although the bombing campaign was eventually disclosed to the American public formally in 1969, stories about the Laos bombing effort were published prior to that in The New York Times. Even after the United States government made the war public, the American people were in the dark as to how large scale the bombing campaign was.

Coffee production in Laos

Laos produces two main types of coffee: Robusta and Arabica. Robusta is mainly used for regular coffee as well as a typical coffee drink in Laos where it is sweetened with condensed milk. The latter, Arabica, is of a higher quality due to its mild taste, and it is used for espresso. For the 20,000 tons of coffee that Laos produces a year, 5,000 tons are Arabica beans and 15,000 tons are Robusta.

East–West Economic Corridor

The East–West Economic corridor is an economic development program initiated in order to promote development and integration of 5 Southeast Asian countries, namely: Myanmar, Thailand, Laos, Cambodia and Vietnam. The concept was agreed upon in 1998 at the Ministerial Conference of the Greater Mekong Subregion, organized in Manila, the Philippines. This corridor became operational on December 12, 2006.

The economic corridor is created based on a road of 1,450 km with the west end at port city of Mawlamyine (Myanmar), crossing Kayin Division, Thai provinces of Tak, Sukhothai, Phitsanulok, Phetchabun, Khon Kaen, Kalasin and Mukdahan and Laotian provinces of Savannakhet, Vietnamese provinces of Quảng Trị, Thừa Thiên–Huế Province and Đà Nẵng city as the east end. From Myanmar it is further connected to India via India–Myanmar–Thailand Trilateral Highway which is being upgraded, with most part already completed and remaining upgrade will be completed by 2020.

By using the East–West Economic Corridor, the travel time between Bangkok and Yangon is three days, compared with the two to three weeks needed for conventional marine transportation via the Straits of Malacca.

Energy in Laos

This page describes energy and electricity production, consumption and import in Laos.

Fishing industry in Laos

The fishing industry in the land-locked country of Laos is a major source of sustenance and food security to its people dwelling near rivers, reservoirs and ponds. Apart from wild capture fisheries, which is a major component of fish production, aquaculture and stocking are significant developments in the country. Historically, fishing activity was recorded in writings on the gate and walls of the Wat Xieng Thong in Luang Prabang dated 1560. For many Laotians, freshwater fish are the principal source of protein. The percentage of people involved in regular fishing activity is very small, only near major rivers or reservoirs, as for most of the fishers it is a part-time activity.

Lao Securities Exchange

The Lao Securities Exchange (LSX) is the primary stock exchange in Laos, located in the capital Vientiane.

Lao kip

The kip (Lao: ກີບ; code: LAK; sign: ₭ or ₭N; French: kip; officially: ເງີນກີບລາວ, lit. "currency Lao kip") is the currency of Laos since 1952. Historically, one kip was divided into 100 att (ອັດ).

List of Laos-related topics

This is a list of topics related to Laos. This is so that those interested in the subject can monitor changes to the pages by clicking on Recent changes in the sidebar.

The list is not necessarily complete or up to date - if you see an article that should be here but is not (or one that should not be here but is), please do update the page accordingly.

Since the page is a maintenance page, the interested parties also want to know when changes are made to this list as well; so please do not remove the self-link.

List of banks in Laos

This is a list of banks in Laos.

List of companies of Laos

Laos is a landlocked country in the heart of the Indochinese peninsula of Mainland Southeast Asia, bordered by Myanmar (Burma) and China to the northwest, Vietnam to the east, Cambodia to the southwest, and Thailand to the west and southwest.Laos' ambitious strategies for development are based on generating electricity from its rivers and selling the power to its neighbors, namely Thailand, China, and Vietnam, as well as its initiative to become a 'land-linked' nation, shown by the planning of four new railways connecting Laos to those same countries. This, along with growth of the mining sector, Laos has been referred to as one of East Asia and Pacific's fastest growing economies by the World Bank, with annual GDP growth averaging 7% for the past decade.It is a member of the Asia-Pacific Trade Agreement (APTA), Association of Southeast Asian Nations (ASEAN), East Asia Summit and La Francophonie. Laos applied for membership of the World Trade Organization (WTO) in 1997; on 2 February 2013, it was granted full membership.

List of provinces of Laos by Human Development Index

This is a list of provinces of Laos by Human Development Index as of 2017, including the Vientiane Prefecture.Note: the HDI values are calculated using the pre-2013 provincial borders, so the newly-established Xaisomboun Province (which was formed from parts of the Bolikhamxai, Vientiane and Xiangkhoang provinces) is not included in the data.

Mining industry of Laos

The Mining industry of Laos which has received prominent attention with foreign direct investments (FDI) has, since 2003–04, made significant contributions to the economic condition of Laos. More than 540 mineral deposits of gold, copper, zinc,

lead and other minerals have been identified, explored and mined. During 2012, the mining and quarrying sector's contribution to GDP was around 7.0%; during this reporting year the FDI in the mineral sector was of the order of US$662.5 million out of a total trade of $4.7 billion in the country. Laos is now a member of the WTO.

Ministry of Industry and Commerce (Laos)

The Ministry of Industry and Commerce is the government ministry responsible for governing and developing industrial activity and commercial activity in Laos. It is responsible for regulating and promoting manufacturing, trade, import and export activity, and for representing Laos and Laotian interests in the international business community.

Ministry main offices are located in Vientiane.

Nam Theun 2 Dam

The Nam Theun 2 Hydropower Project, or simply NT2, is a hydroelectric dam located on the Nam Theun River in Laos. Commercial operation of the plant began in April 2010. The scheme diverts water from the Nam Theun, a tributary of the Mekong River, to the Xe Bang Fai River, enabling a generation capacity of 1,075 MW, from a 350 m (1,148 ft) difference in elevation between the reservoir and the power station.

It is the largest hydroelectric project so far in Laos, exporting power to Thailand and supplying the local area with electricity. At the time of signing in 2005, NT2 was the largest foreign investment in Laos, the world's largest private sector cross-border power project financing, the largest private sector hydroelectric project financing, and one of the largest internationally financed IPP projects in Southeast Asia. The dam also marked a return by the World Bank to funding large-scale infrastructure, after a decade-long hiatus.

According to the government of Laos, "the project is an essential part of the country's development framework and the Project's implementation is likely to be the first real possibility for (Laos) to reduce gradually its dependence on Official Development Assistance".The project has environmental and social impacts, and comprehensive measures have been designed to mitigate these. According to a group of social and environmental experts who advise on the project, these measures could become a global model. Although Newsweek magazine referred to it as a "kinder and gentler dam", the project also attracted criticism.By 2015, it was possible to see the actual effect of the dam and criticism mounted. A group of non-governmental organisations said: "Ten years after the start of the construction of the Nam Theun 2 dam in Central Laos, it is clear that this mega project has disastrous impacts on people and their environment."

Outline of Laos

The following outline is provided as an overview of and topical guide to Laos:

Laos – landlocked sovereign country located in Southeast Asia. Laos borders Burma (Myanmar) and China to the northwest, Vietnam to the east, Cambodia to the south, and Thailand to the west. Laos traces its history to the Kingdom of Lan Xang or Land of a Million Elephants, which existed from the fourteenth to the eighteenth century. After a period as a French protectorate, it gained independence in 1949. A long civil war ended officially when the communist Pathet Lao movement came to power in 1975 but the protesting between factions continued for several years.

Private enterprise has increased since the late 1990s when economic reforms including rapid business licensing were introduced. Laos is still ranked among the lowest countries in terms of economic and political freedom. The economy of Laos grew at 7.2% in 2006, 35th fastest in the world. Eighty percent of the employed practice subsistence agriculture. The country's ethnic make-up is diverse, with around 70% belonging to the largest ethnic group, the Lao.

The Company (Prison Break)

The Company is a fictional covert organization, with evil intentions and motivations, featured in the American television drama/thriller series Prison Break. It is a secret group of multinationals known almost exclusively by those who work for them (with the exception of those opposing them). Its influence and power over individuals stretches to the White House, influencing every decision the country makes. Its main goal is to impose a New World Order to maintain control over the country's economy and tyrannize the world. The Company has thus far also been described as a group of multinational corporate interests, and as a cabal of corporations influencing everything that goes on in the United States.The Company has influence over many agencies of the United States government, especially the Secret Service. With Caroline Reynolds (Patricia Wettig), the former Vice President of the United States in their grasp, The Company held control over the government's sway on the energy bill and subsequently, the country's economy. However, The Company considers every individual who works for them a pawn to achieve their goals.

The Company and its operatives have on several occasions displayed their complete lack of regard for innocent people's lives. Its desperate need to attain control of the country's economy eventuated in illegal dealings through Caroline Reynolds' brother's company, Ecofield. When one of their employees leaked information about Ecofield into the public, The Company went to incredible lengths to capture him. This man was Aldo Burrows (Anthony Denison). In order to bring him out into the open, The Company masterminded a conspiracy and used Caroline Reynolds' power as the Vice President to frame and convict his son, the innocent Lincoln Burrows (Dominic Purcell), of Terrence Steadman's murder.

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