Laos Economy

 
 
 
 

This is a rice field in Laos. The rice is right on the water so that you do not need to transport water. Rice is the leading crop in Laos.

History Traditionally, Lao economy was based on agriculture, handicraft production, and trade. Before Europeans arrived, local and long distance trade networks had linked Southeast Asia with East and South Asia. France and other Europeans were lured to Laos in the 17th and 18th centuries because of the chance of controlling Asian trade in spices and other luxury goods. Later in the 19th and 20th centuries, France had hoped to exploit the region’s natural resources, but later realized that Laos’s terrain made commercial agriculture and mining nearly impossible. Since then Laos’s economy has been unable to recover. They have remained a very primitive and extremely poor country. Laos’s history starts in the late 1700’s. They were a common Asian country who thrived on agriculture and trade. Among their trade items are natural resources and common handicrafts, such as statues. One of there biggest trade partners at the time was France. Over time Laos became very dependent on France; knowing this France decided to take advantage of Laos. France decided to go into their country and take out resources such as gold and diamonds. Though France’s plan backfired, because they spent more money on trying to claim the resources then they did on selling them. In their disgust, they decided to stop trade with Laos almost completely, the result for Laos has been horrific.  They have been unable to keep up with modern times and still rely on the ancient theory’s of how to go along it every day life.  Top of Page

 

Government Laos’s government has traditionally been Communist, being one of the few remaining communist states.  Since 1986, the government of Laos has been spreading out power and encouraging private projects that hold many risks, or enterprises.  This had results of a 7% growth rate each year.  One exception to this growth is during the Asian Financial Crisis that started in 1997. The crisis started in Thailand and dispersed throughout all of Asia.  This affected Laos because Laos and Thailand are big trade partners.  20 percent of exports and 52 percent of imports in Laos come from Thailand.  An affect the crisis had on Laos is that from June 1997 to June 1999, the Lao kip lost 87 percent.  In September 1999, the value of the Lao kip had a drastic fall, going from 3500 kip to 9000 kip to the US dollar in a matter of weeks.  The Asian Financial Crisis has had a huge affect on the present economy of Laos.  Top of Page

 
 

The Ngum River is where Laos gets its hydro-electrical power. They are able to capture the power and trade it to other countries.

Employment Currently in Laos, the unemployment rate is 5.7% and has a labor force of 2.4 million. Laos’s employment and economy heavily depends of its agriculture, where 80% of its employment is. The Gross Domestic Product purchasing power parity as of 2001 is 9.2 billion dollars. The GDP per captia composition by sector is 55% agriculture, 22% industry, and 25% services, while the GDP per captia purchasing power is 1, 630 dollars. Products that Laos’s agriculture produces are sweet potatoes, corn, rice, vegetables, sugarcane, tobacco, cotton, tea, peanuts, rice, water buffalo, pigs, cattle, and poultry. 50% of Laos is forest. This gives Laos timber as one of their major resources, along with hydropower, gypsone and tin. Laos’s exports are $325 million and imports are $540 million as of 2001. Top of Page

 
 

Products Products that Laos’s agriculture produces are sweet potatoes, corn, rice, vegetables, sugarcane, tobacco, cotton, tea, peanuts, rice, water buffalo, pigs, cattle, and poultry. 50% of Laos is forest. This gives Laos timber as one of their major resources, along with hydropower, gypsum and tin. Laos’s exports are $325 million and imports are $540 million as of 2001. Agriculture makes up 53% of the GDP. Just like in the olden days agriculture is a big part of the economy. The main crop that the people thrive on is Rice. But, they also grow corn, sweet potatoes, and vegetables. Their cattle include water buffalo, pigs, cattle, and poultry. The last legal crops include coffee beans, tobacco, sugar cane, tea, peanuts, and cotton. Like most countries though, Laos also has illegal drugs. Their two main drugs are Opium, which was what killed China’s empire, and Cannabis, which is in Marijuana. The group of selling is called the Golden Triangle. This is because the area that the crop is grown in northern Laos is in the shape of a triangle.  The rest of Laos’s GDP make-up is 22% industry and 25% services while the GDP per Capita is the equivalent of $1,630 US dollars. The industry includes all the mining and electricity done in the region. The main mining exports are tin and electrical power. They also trade gold, lead, coal, iron, copper, and precious stones. These products are mainly traded to Thailand, Vietnam, and Japan. Top of Page

These are crop fields in Laos. Laos economy is based on the agriculutre of vegetables such as  potatoes as shown above, and Rice.

Transportation Laos has few reliable transportation routes because of its lack of development and mountainous land surroundings.  This inaccessibility limits the government’s presence in areas that are far from the national or regional capitals.  It also limits communication between villages and ethnic groups.  The two natural channels that Laos has access to are the Nam Ou and the Mekong, but there are no ports or harbors in Laos.  Another problem that occurs in Laos’s water transportation is that in the months of December through April, the water level is low, limiting the size of the craft that can be used on several routes.  Laos only has one cargo ship that is owned by the government.  There are no railroads in Laos, small amounts of areas for airplane landings, and a rudimentary road system is used, meaning that most of the roads are unpaved.  Top of Page

This is a bus used in a southern city in Laos. The bus is used for transportation and the packages on top are the riders' luggage.

Web Pages http://www.cia.gov/pub/ications/factbook/geoslla.html.  http://www.mapzone.com/worldlasia/laos/economy.index.php http://www.extension.umn.edu.distribution/familydevelopment/componentsIDE6202-07.html  http://sybounheuan.virtualave.net/LaosCountryStudy/r104.htm http://field(DOCID+la0103)  Top of Page

 

Bibliography "Laos Economy". Book of Facts 2001 "Laos." [online] Available www.cia.gov/pub/ications/factbook/geoslla.html. April 6, 2003. "Lao Economy." Colombia Encyclopedia. 2002.  "Laos" [online] Available www.mapzone.com/worldlasia/laos/economy.index.php. April 14 ,2003  "Laos." [Online] Available www.photius.com/wfb/wfb1999/laoa/laos_economy.html. April 10,2003 "Laos". World Almanac. 2002 "Lao" World Cultures Volume 5. 1999 "Services Exchanged" [online] Available http://www.extension.umn.edu.distribution/familydevelopment/componentsIDE6202-07.html  "Laos Transportation and Telecommunications" [online] Available http://sybounheuan.virtualave.net/LaosCountryStudy/r104.htm  "Laos Transportation and communication" [online] Available http://field(DOCID+la0103)  Top of Page