Economy of Laos

The Laos is populated of 5,5 million inhabitants, of which 85% live in the rural areas.

General information

A serious economic starting cannot be possible without the development of the infrastructures currently centered on the highway network and telecommunications. The whole of the network of infrastructures remains however modest: no the railroad, almost not of phone network, few roads.

The Laos opened in 1986 with the “new economic mechanisms”. The Code of the Investments was promulgated in the tread in 1988, followed first Program of structural adjustment adopted in 1989 with the support of the the IMF and the the World Bank. The overseas investments remain modest and go on the trades of tourism (hotel trade, restoration, the services if one excludes the great projects of the type the hydroelectric stopping of Nam Theun 2 whose Électricité de France is one of the principal partners.

The macroeconomic stability in term of changes and of Inflation seems to be maintained and the Laos currently profits from the technical assistance of the Asian development bank (ADB) to undertake the reforms of the banking environment. With an income per head of 300 dollars, Laos is one of the poorest countries of the world. The international assistance ensures a third of the national budget.

Agriculture

The agricultural sector is most important and accounts for 52% of the GDP. Independent source of incomes of the country, it occupies 85% of the Active population. The cultivable grounds (4%) are primarily dedicated to rice growing. The principal cultures are food (Riz, Maïs, starches), while the Café, the groundnuts (Cacahuètes), the Coton and the Tabac are intended for marketing. Laos is the 3rd world producer of Opium behind the Afghanistan and the close Burma.

Breeding

Buffaloes, bovines, pigs, goats, sheep and poultries.

Industry

Industry produces 22% of the GDP, and is recent for the essential one. It is primarily made up of companies of the sectors textile, exploitation of wood, the agribusiness industry and the hydroelectric energy production. The basement, though rich in resources, would require large investments to have a profitable production. It contains Baryte, tin, coal, Gypse and Saphir S. There are some furnaces with limes, intended for a local market.

The electrical production with the project of Barrage of Nam Theun 2 is an important potential asset since Laos will supply its neighbors of which some (China, Thailand, Vietnam) are in strong growth and have a demand for energy which does not cease progressing. This durable development project encounters several unknown factors in particular, the impact which it will be able to have on the environment in the middle of the Laotian forest and the rehousing of 6.000 displaced persons.

The forest recovers 90% of the country, and its exploitation could be an appreciable source of incomes for the country, if it finds an outlet (the country does not have an access to the sea).

Tertiary sector

Tourism

737.208 tourists visited Laos in 2000 including 32.869 Étatsuniens, 24.534 French, 20.687 Japan board, 10.168 Australia NS. The main part of the tourists makes up of nationals of the countries of ASEAN.

Trade and overseas investments

In 2004, Australia is the 4th investor of the country with 48 projects adding up 324 million dollars. Japan and China are also of large investors in Laos.

The country turns over gradually to the free trade and the private company since the liberalization of the laws on the overseas investments and the admission of Laos to the ASEAN.

Japan is by far that which brings the economic aid most important (18 million dollars in 1999).

The leading vendor is the Thailand (64% of the imports).

The main customers are: Thailand (20%), France (8%), Japan (3%).

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