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Lao People’s Democratic Republic: Country Report
Country Report
General
Lao People’s Democratic Republic (LPDR or in short Laos) is a landlocked Southeast Asia state,
with China to the north, Thailand and Myanmar to the west, Vietnam to the east, and Cambodia
to the south. Laos is a country of 236,800 sq.km (91,430 sq. mi, slightly larger than Utah).1 The
capital and the biggest city is Vientiane, and other big cities are Savannakhet, Luang Prabang,
Pakse, Thakhek. The population of Laos is 6,201,000, with a GDP of $7,296,361,373 in total,
and $1050 per capital.2 The majority of people are Lao or Laotian, with minority like Khmou,
Hmong. According to altitudinal distribution, Laos can be divided to Lao Loum (lowland
people), Lao Theung (midland people), Lao Soung (highland people). The dominant religion is
Buddhism. The official language is Lao, with an increasing importance of foreign language like
French and English. Lao People’s Democratic Republic is communist state ruled by the single
and only legal party- Lao People’s Revolutionary Party (LPRP). Laos copied a command
1
http://www.state.gov/r/pa/ei/bgn/2770.htm
2
http://www.worldbank.org/en/country/lao
economy from other communist country until 1986, when it imposed an economic reform. Even
though Laos is in transition, driven by globalization and regionalization, the political control by
LPRP is still very strict. The economic transformation and political democratization are still a
long way to go for Laos, if it wants to leave the least developed country.
History
In history, the first kingdom of Lan Xang was established in 1353. After many centuries of
decline, Laos became one part of French Indochina in the end of 19th century. During the WWII,
it was occupied by Japanese army. After WWII, Laos declaimed its independence, but it was reoccupied by France in 1946. Laos didn’t become an independent state until France was defeated
by Vietnam in 1954 during the first Indochina war. Laos established a coalition government after
election in 1954. During the second Indochina war 1954-1975, Lao People’s Revolutionary Party
(LPRP) came into power in 1975, and set up a socialist government-communist Lao People’s
Democratic Republic (LPDR). It also backed Vietnam against China in the third Indochina war
in 1979.
Politics
Lao PDR is a communist state, dominated by the only legal party-Lao People’s Revolutionary
Party (LPRP). Laos adopted its constitution in 1990. The head of Laos is president, who can
appoint Prime Minister as the head of government, after election of National Assembly. Central
government choices will be decided by the 11 numbers Politburo and the 50 member central
committee. A 132 numbers of National Assembly is the legislative department, which will
approve new laws. And the Judicial department will enforce the laws. The government,
legislative and judicial departments have their central and local level respectively. Laos has 16
provinces and 1 capital city (nakhon luang, singular and plural); Attapu, Bokeo,
Bolikhamxai, Champasak, Houaphan, Khammouan, Louangnamtha, Louangphabang,
Oudomxai, Phongsali, Salavan, Savannakhet, Viangchan (Vientiane)*, Viangchan,
Xaignabouli, Xekong, Xiangkhouan. 3 The elections are held every five year. The
nearest one is in April 2011, in which Choummaly Sayasone was elected president and
Thongsing Thammavong was appointed as Prime Minister. Laos joined many regional and
international organizations, such as ASEAN, ADB, IMF, UN, and Laos is in a positive process to
get a membership of WTO.
3
https://www.cia.gov/library/publications/the-world-factbook/geos/la.html
Economy
For a long time in history, Laos is and it still is one of the least developed countries. The
percentage of its population under poverty line is very high. In 1975, the Lao People’s
Revolutionary Party (LPRP) came into power, set up a communist government and a command
economy. Under the communist rule, everything was state-owned and private market was
banned. In cites, workers worked in the state-owned enterprises, and farmers were organized in
different communities to work in the state-owned land. The economic efficiency was very low
and people did not have incentives to produce. In 1986, the Laos government approved the New
Economic Mechanism (NEM), which encourages a private, decentralized and market-based
economy. People are encouraged to invest, especially foreign capital. Farmers can own land, sell
products in the markets, and work in the cities. The economy is getting better and better after
1986. According to the World Bank Group, Lao’s GDP in 2010 is $7,296,361,373 in total, with a
growth rate of 8.4%, GDP per capital in 2010 is $1050. Laos’ average GDP growth rate from
2001 to 2010 is 7.1%. And it is expected to grow by 7.6% percent per year from 2011 to 2015.
Laos is planning to move up from the least developed country by the year of 2020.4 Agriculture
contributes 29% of GDP in 2011. (Primary products--glutinous rice, coffee, corn, sugarcane,
vegetables, tobacco, ginger, water buffalo, pigs, cattle, poultry, sweet potatoes, cotton, tea, and
peanuts). Industry contributes 26.5% of GDP in 2011. (copper, tin, gold, and gypsum mining;
timber, electric power, agricultural processing, construction, garments, cement, tourism).
Services account for 44.5% of GDP in 2011.5 Because of inadequate infrastructure or advanced
human capital, Laos’ economy relies highly on its natural resources, such as forestry,
hydropower and minerals (account for half of the total GDP). Also, Laos government relies
heavily on foreign assistance and loans as investment sources for economic development. In
2010, donor-funded programs accounted for approximately 8.5% of GDP and 90% of the
government’s capital budget. In 2010, the country's foreign debt was estimated at $5.8 billion.6
Acknowledgements:
Research and Data Development Provided by: Zhou Tianqiu, Research Assistant, under the Supervision
and Coordination of: Dr. Gerard J. Janco, President, Eurasia Center/Eurasian Business Coalition.
4
http://www.worldbank.org/en/country/lao
5
http://www.state.gov/r/pa/ei/bgn/2770.htm
6
http://www.state.gov/r/pa/ei/bgn/2770.htm