Lao People's Democratic Republic: a free market system with active central planning by the government
The economy of the Lao People's Democratic Republic is fundamentally a free
market system with active central planning by the government, (similar to the
Chinese and Vietnamese models). Agriculture, mainly subsistence rice farming,
dominates the economy of Laos, employing 75% of the population and producing 29%
of Gross domestic product (GDP). In 2010, donor-funded programs accounted for
8.5% of Gross domestic product (GDP). The People's Republic of China is becoming a major player in Laos; Chinese Foreign direct investment (FDI) in
the Lao People's Democratic Republic is increasing at a
Despite the global financial crisis, the economy
of the Lao People's Democratic Republic has performed moderately well. The Gross domestic product (GDP) has reported
steady growth at above 7% in 2009 and it is projected to continue growing continuously in the coming years.
Foreign Trade of the Lao
People's Democratic Republic:
- Exports (2010 est.): 1.950 billion USD. Top
exports products: gold and copper, electricity, wood and wood products, garments, coffee, other agricultural export products, rattan and tin.
- Top export markets:
People's Republic of China, Switzerland, United Kingdom and Germany.
- Imports (2010 est.): 2.258 billion USD. Major imports: fuel, food, consumer
products, machinery and equipment, vehicles and spare parts.
- Top import partners: Thailand, Vietnam, China,
South Korea and Belgium.
Foreign direct investment (FDI) in the Lao People's Democratic
Republic. In the 1st half of the fiscal year 2009-10, the number of investment
(FDI) applications have augmented
compared to the same period of the last fiscal year.
China is now the biggest source of Foreign direct investment (FDI) in Laos.
Savan-Seno Special Economic Zone. Savannakhet Province in Lao PDR is a
thriving hub of International trade and services in the Greater Mekong Sub-region (GMS). The total value of export in Savannakhet was USD238 million in 1998-1999, of which 92% (USD218 million) was transit
Example of the course doing business in Lao:
Lao Brewery Co., Ltd. was founded in 1973 as a
foreign investors and Lao businessmen initially under the registered name of
Lao Beer and Ice Factory. At that time, the company had an annual production
capacity of 3 million liters of beer, 1.5 million liters of carbonated drinks
and a daily production capacity of 120 tones of ice.
Xaobangroup produces and supplies home-made yogurt, fruit juice, honey,
fruit jam, tomato sauce, pre-packed salad and salad dressing and other natural seasonal products to customers in Vientiane and other urban areas in Lao.
The Investment Promotion Department (IPD), operating under the Ministry of Planning and Investment, formerly known as the Department for Promotion and
Management of local and Foreign Investment (DDFI) from 2004-07, manages the
Foreign direct investment (FDI) system and reviews investment applications in
to the Investment Promotion Law.
Lao National Chamber of Commerce and Industry (LNCCI) established in 1989
is an independent body which represents the business community in Lao PDR.
The Lao People's Democratic Republic has a population of 6.8 million. 50%
people of Laos are ethnic Lao. The main religion is Theravada Buddhism.
The only legal political party is the Lao People's Revolutionary Party (LPRP).
Languages: Lao (official), English, French, and various ethnic languages. The government introduced English at the primary school level in 2010.
Borders of Laos (Lao People's Democratic Republic): Vietnam, Thailand, Cambodia,
People's Republic of China and Myanmar