Economy in Laos

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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 in 1997 when growth was a mere 1.5%. 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—$5.9 billion (1997 est.)

GDP—real growth rate: 1.5% (1997 est.)

GDP—per capita: purchasing power parity—$1 150 (1997 est.)

GDP—composition by sector:

agriculture: 56%

industry: 19%

services: 25% (1997 est.)

Inflation rate—consumer price index: 16% (1997 est.)

Labor force: 1 million-1.5 million

by occupation: agriculture 80% (1997 est.)

Unemployment rate: 1.7% overall; 4.5% in urban areas (1995 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: NA%

Electricity—capacity: 217 000 kW (1997)

Electricity—production: 1.2 billion kWh (1996)

Electricity—consumption per capita: 60 kWh (1995)

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

Exports:

total value: $313.1 million (f.o.b. 1996)

commodities: wood products garments electricity coffee tin

partners: Vietnam Thailand Germany France

Imports:

total value: $678 million (c.i.f. 1996)

commodities: machinery and equipment vehicles fuel

partners: Thailand Japan Vietnam China Singapore

Debt—external: $1.2 billion (1996)

Economic aid:

recipient: ODA $212.2 million

Currency: 1 new kip (NK) = 100 at

Exchange rates: new kips (NK) per US$1—2 500 (January 1998) 1 256.73 (1997) 921.14 (1996) 804.69 (1995) 717.67 (1994) 716.25 (1993)

note: as of September 1995 a floating exchange rate policy was adopted

Fiscal year: 1 October—30 September

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