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Laos Economy

    Economy—overview: The government of Laos—one of the few remaining official communist states—has been decentralizing control and encouraging private enterprise since 1986. The results, starting from an extremely low base, have been striking—growth averaged 7% in 1988-96. Because Laos depends heavily on its trade with Thailand, it fell victim to the financial crisis in the region beginning in 1997. Laos is a landlocked country with a primitive infrastructure. It has no railroads, a rudimentary road system, and limited external and internal telecommunications. Electricity is available in only a few urban areas. Subsistence agriculture accounts for half of GDP and provides 80% of total employment. The predominant crop is glutinous rice. In non-drought years, Laos is self-sufficient overall in food, but each year flood, pests, and localized drought cause shortages in various parts of the country. For the foreseeable future the economy will continue to depend on aid from the IMF and other international sources; Japan is currently the largest bilateral aid donor; aid from the former USSR/Eastern Europe has been cut sharply. As in many developing countries, deforestation and soil erosion will hamper efforts to regain a high rate of GDP growth.

    GDP: purchasing power parity—$6.6 billion (1998 est.)

    GDP—real growth rate: 4% (1998 est.)

    GDP—per capita: purchasing power parity—$1,260 (1998 est.)

    GDP—composition by sector:
    agriculture: 51%
    industry: 21%
    services: 28% (1998 est.)

    Population below poverty line: 46.1% (1993 est.)

    Household income or consumption by percentage share:
    lowest 10%: 4.2%
    highest 10%: 26.4% (1992)

    Inflation rate (consumer prices): 112% (1998 est.)

    Labor force: 1 million-1.5 million

    Labor force—by occupation: agriculture 80% (1997 est.)

    Unemployment rate: 5.7% (1997 est.)

    Budget:
    revenues: $230.2 million
    expenditures: $365.9 million, including capital expenditures of $317 million (1996)

    Industries: tin and gypsum mining, timber, electric power, agricultural processing, construction, garments

    Industrial production growth rate: 8.9% (1998 est.)

    Electricity—production: 900 million kWh (1996)

    Electricity—production by source:
    fossil fuel: 0.04%
    hydro: 99.96%
    nuclear: 0%
    other: 0% (1998)

    Electricity—consumption: 287 million kWh (1996)

    Electricity—exports: 640 million kWh (1996)

    Electricity—imports: 27 million kWh (1996)

    Agriculture—products: sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton; water buffalo, pigs, cattle, poultry

    Exports: $330 million (f.o.b., 1998)

    Exports—commodities: wood products, garments, electricity, coffee, tin

    Exports—partners: Vietnam, Thailand, Germany, France

    Imports: $630 million (c.i.f., 1998)

    Imports—commodities: machinery and equipment, vehicles, fuel

    Imports—partners: Thailand, Japan, Vietnam, China, Singapore

    Debt—external: $1.2 billion (1996)

    Economic aid—recipient: $290 million (1998)

    Currency: 1 new kip (NK) = 100 at

    Exchange rates: new kips (NK) per US$1—4,217 (January 1999), 3,299.21 (1998), 1,256.73 (1997), 921.14 (1996), 804.69 (1995), 717.67 (1994)
    note: as of September 1995, a floating exchange rate policy was adopted

    Fiscal year: 1 October—30 September

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)