Flag description:
three horizontal bands of red (top), blue (double width), and red
with a large white disk centered in the blue band
Economy Laos
Economy - 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% in 1988-2004 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 food
processing and mining. Construction will be another strong economic
driver, especially as hydroelectric dam and road projects gain
steam. In late 2004, Laos gained Normal Trade Relations status with
the US, allowing Laos-based producers to face lower tariffs on
exports. This new status may help spur growth. In addition, the
European Union has agreed to provide $1 million to the Lao
Government for technical assistance in preparations for WTO
membership. If the avian flu worsens and spreads in the region,
however, prospects for tourism could dim.
GDP (purchasing power parity):
$12.29 billion (2005 est.)
GDP (official exchange rate):
$2.523 billion (2005 est.)
GDP - real growth rate:
7.3% (2005 est.)
GDP - per capita (PPP):
$2,000 (2005 est.)
GDP - composition by sector: agriculture: 45.5% industry: 28.7% services: 25.8% (2005 est.)
Labor force: 2.8 million (2002 est.)
Labor force - by occupation: agriculture: 80% industry and services: 20% (1997 est.)