Laos/Economy

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 7% in 1988-96. Since mid-1996, however, reform efforts have slowed, and the economy has suffered as a result. Because Laos depends heavily on its trade with Thailand, it was further damaged by the regional financial crisis beginning in 1997. From June 1997 to June 1999 the Lao kip lost 87%, and reached a crisis point in September 1999 when it fluctuated wildly, falling from 3,500 kip to the dollar to 9,000 kip to the dollar in a matter of weeks. Now that the currency has stabilized, however, the government seems content to let the current situation persist, despite 140% inflation in 1999 and limited foreign exchange reserves. A landlocked country with a primitive infrastructure, Laos 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. 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 attain a high rate of GDP growth.

GDP: purchasing power parity - $7 billion (1999 est.)

GDP - real growth rate: 5.2% (1999 est.)

GDP - per capita: purchasing power parity - $1,300 (1999 est.)

GDP - composition by sector:
agriculture: 51%
industry: 22%
services: 27% (1999 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): 140% (1999 est.)

Labor force: 1 million - 1.5 million

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

Unemployment rate: 5.7% (1997 est.)

Budget:
revenues: $202.7 million
expenditures: $385.1 million, including capital expenditures of $NA (FY97/98 est.)

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

Industrial production growth rate: 7.5% (1999 est.)

Electricity - production: 1.34 billion kWh (1998)

Electricity - production by source:
fossil fuel: 2.99%
hydro: 97.01%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 514 million kWh (1998)

Electricity - exports: 782 million kWh (1998)

Electricity - imports: 50 million kWh (1998)

Agriculture - products: sweet potatoes, vegetable?s, corn, coffee, sugarcane?, tobacco, cotton?; tea, peanuts?, rice?; [water buffalo]?, pig?s, cattle, poultry

Exports: $271 million (f.o.b., 1999 est.)

Exports - commodities: wood products, garments?, electricity, coffee, tin

Exports - partners: Vietnam, Thailand, Germany, France, Belgium

Imports: $497 million (f.o.b., 1999 est.)

Imports - commodities: machinery and equipment, vehicles, fuel

Imports - partners: Thailand, Japan, Vietnam, China, Singapore, Hong Kong

Debt - external: $2.32 billion (1997 est.)

Economic aid - recipient: $345 million (1999 est.)

Currency: 1 new kip? (NK) = 100 at

Exchange rates: new kips (NK) per US$1 - 7,674.00 (January 2000),7,102.03 (1999), 3,298.33 (1998), 1,259.98 (1997), 921.02 (1996), 804.69 (1995)
note: as of September 1995, a floating exchange rate policy was adopted

Fiscal year: 1 October - 30 September