Lao People's Democratic Republic (Lao PDR)

I. Location:

Lao PDR is Located in Southeastern Asia which has the borders with Thailand to the west, Vietnam to the East, China to the North and Cambodia to the South.
Land boundaries total: 5,083 km
Border countries: Burma 235 km, Cambodia 541 km, China 423 km, Thailand 1,754 km, Vietnam 2,130 km, Coastline 0 km (landlocked)
Geographic coordinates 18 00 N, 105 00 E
Map references Southeast Asia
Area total: 236,800 sq km
land: 230,800 sq km
water: 6,000 sq km
Area - comparative slightly larger than Utah
Climate tropical monsoon; rainy season (May to November); dry season (December to April)
Terrain mostly rugged mountains; some plains and plateaus
Elevation extremes lowest point: Mekong River 70 m
highest point: Phou Bia 2,817 m

Overview of Lao Socio-Economic
The Lao People's Democratic Republic is a small country with a land area of 236800 km2, stretching more than 1799 km from the North to the South, and between 100-400 km from the East to the West. It is a landlocked country that shares a 416-km from border with People's Republic of China in the North, a 492-km border with Cambodia in the East and a 230-km border with Myanmar in the West.
About seventy percent of the territory consists of mountains ranges, highlands and abundance of rivers, including 1865 km stretch of the border Mekong river, defining its border with Myanmar and major part of the border with Thailand. The Mekong River and its tributaries are navigable and provide alluvial deposits of the fertile plains. The mountains pose difficulties for transportation and communication and complicate development. But sixty percent of the water of the Mekong River, which originate in the Lao PDR, can produce a large potential of hydropower generation.
Lao PDR has a total population of about 4,9 millions with a density of 19 persons per square kilometer and an inreased rate of 2,6%.
The climate of Lao PDR governed by two monsoons. The cool dries northeast monsoon from October to April and the west south monsoon from May to September. Temperatures range from 15'c. to 35 'c. and 0'c to 30'c in the mountainous area. Average annual rainfall varies from about 150 cm to 200 cm in Vientiane.
Forests cover about 47% of the country, comprising of a variety of commercial trees suitable for producing of sawtimber, plywood, parquets, furniture..
Agriculture is the principal economic sector in the Lao PDR accounting for 54,3 % of the total value added in 1995 and covering a wide range of activities from subsistence production to agriculture related industries. About 85 % of the population are engaged in agriculture.

Macro-Economic policies and economic system
I. Economic structure.
The economic structure of the Lao PDR consisted of many sectors under different form of ownership and economic organizational system, but these sectors are equal before law and operate under the management of the state with the view to freely cooperation and compete in their business activities.

2. Legal system.
As we have seen the Government wish to encourage competitiveness in the market. This is in line with improving economic relations with other countries; the National Assembly has promulgated a number of laws and regulations with the view of ensuring trade and investment in Laos. At present we have more than 40 laws including investment and business law.

3. Monetary and banking system.
The policy of foreign exchange management is moved to a floating exchange rate system since 1995. In the field of broadening the economic relation with foreign countries, the Government extended business licenses to local and foreign banks with purely conducted commercial banking activities. Up to now the banking system in Lao PDR is comprised of central Bank, Lao state owned commercial banks, seven branches of foreign banks and Lao private commercial bank.

4. Customs regulations.
Under the custom law of the Lao PDR the totally of tariff lines is 3552 with tariff rate ranging from 5%-40%. More than 50% covered the major part with 5% tariff rate and others with 10% and 20% tariff rates. The goods imported to Laos and exported from Laos are required to obtain the licenses and must be declared to the custom offices. The import duties, which have only a mild protective component, are collected at regional customs posts, basing on the valuation method of the GATT (General Agreement on Trade and Tariff).

II. Trade expansion policy.
As you are no doubt aware in 1986 Lao PDR implemented a new economic mechanism. Thus plans were set in motion to transform the centrally planed economy to a market economy under the direct management of the state. All economic development and to compete and freely cooperate in their business activities. Therefore since this time Lao PDR has been steadily progressing towards a market economy.

Open door policy and trade practices
The economic and social development policy of Lao PDR is dependent on the agricultural and forestry sectors. In addition, development of the industrial and service sectors is encouraged, specifically with respect to environmental protection.
In the trade sector the policy is an open door one concerning trade cooperation with other countries. As we have previously mentioned the Government is transforming the economy to the market economy and implementing a free trade policy with respect to national laws and international trade practices. Emphasis is also placed on increasing and promoting production for domestic consumption and export. In addition, all the necessary conditions prevail for Laos to become the center and indeed a crossroads for trade and services in the future.

1. Regulation concerning trade activities.
As we have seen, the Government wishes to develop industry and encourage competitiveness in the market. Hence, the National Assembly has promulgated, including laws concerning the facilitation of trade activities such as business laws, contract obligation law, company bankruptcy laws, tariff laws and tax laws, etc.,

2. Major trade partners.
Currently, Lao PDR has trade relation with more than 30 countries. In addition, it has signed a trade agreement with 14 countries and is currently negotiating with number countries. The main trading partners with Laos are the Asia and Pacific countries, such as China, Japan, Singapore, Thailand, Vietnam and Malaysia. A number of European countries also do business with Laos and the EU, USA and Canada are the main importers of Laos's products such as clothes and coffee.

3. Trade activities
Since the implementation of the open door policy, trade between Laos and others foreign countries have increased rapidly. We can see as follows:
In 1992, the volume of trade reached US$ 406 m.
In 1994, Total volume of trade is US$ 678 m.
- Export US$ 222m.
- Import US$ 465 m.
For 1996, total volume of trade is US $ 1014 m.
- Total export US $ 325 m.
- Total import US $ 689 m.
The main products for export in Laos are woods and woods products, agricultural products, mineral equipment, handicraft, electricity and contructions of the economic infrastructure.

Imported and Export System
This refers to the law and regulations in the trade sectors of Lao PDR. Lao national or foreign businessmen can run a variety of business such as: import-export trading, Re-export, Border trade, Retail trade, production of exported products and others businesses which must be registered according to the business law.

III. Obstacles to trade expansion.
Despite some impressive economic growth rate and relative macro-economic stability in the first half of the 90;s, it has become clear that the obstacles to trade expansion in our country is closely linked to the low level of social service and the absence of income generating activities. Our past and continuing investment priorities aim at integrating the country by opening up every area to create the precondition for integrated rural development in the context of a market economy.

A. Obstacles to Trade promotion and Trade support services.
1. Obstacles to Trade promotion.
The main obstacles to Trade promotion are the small and medium enterprises experience difficulties in expanding their exports. They have a lack of lessons and experiences in marketing their products in foreign market. A lack of capital is also one of the difficulties in promoting their exports because of the quantity and quality of the products can not meet the demands of the customers. In addition due to high import tariff of the EU and the USA the Lao exports are not competitive.

The problems of the enterprises in obtaining reliable and up to date information's on export-import business opportunities are the followings:
" Slow accession to information and unclear one are sent to them and some of them are not accessible,
" Lack of capital for the advertisement of their products to the customers.
" Lack of skilled staff who can handle the collection, analysis and dissemination of information.

The offering products for internationally acceptable for the Lao enterprises, but they can not, due to many problems: Firstly the quality of the products can not meet the international standard. Secondly we have the lack of skilled labor and lack of capital to install new technology equipment for the production. Finally the export transactions can not directly be carried out; most of them are done through third person. At the same time, other than in term of trade policy, we still face to many problems in developing our export and tourism services.
In addition, the enterprises have encountered many problems in their international purchasing and inventory management. As a number of transportation companies within the country is limited, we have to use the service of the foreign companies abroad and beside that we have to transport our goods are brought through, some are illegal the so called smuggling, thus those can not be ensured in terms of quality standard.

2. Problems related to trade facilities.
Although there are some achievements resulted from export promotion activities, many weakness still appear and need to be solved such as:
" Lack of technical knowledge in promoting producers.
" The establishment of groups or associations of producers are not widely extended across the country.
" The coordination and cooperation between the producer's groups association and the national chamber of commerce and industry are not very active.

B. Obstacle to market accesses.
The main problems of the market access of Lao PDR are the tariff barriers. The products are not competitive, due to high cost of transportation and stringent rule of origins laid out by importing countries. The others specific problems or barries that are the most trouble for the exporters are the high import tariff rates for products exported to the USA and the stringent rule of origins as a major conditions of GSP laid out by EU and developed countries. At the same time the cost of transit service in Thailand as a gateway to sea transportation for the Lao PDR's export is very high.

IV. Trading Perspective.
The main aim of Lao PDR foreign trade policy is to gradually reduce the trade deficit with foreign countries so as to establish a balance of trade or overbalanced status in the year to come by promoting domestic production for export and import substitution.
In addiction, the exploitation of untapped potentialities of the country should be increased. Also, the systematic programming and radical changes of procedures and mechanisms will be worked out on a regular basis in order to avoid export obstacles. At the same time, procedures and mechanisms hindering the production will also be changed and all forms of investment in the production sectors for export will be vigorously promoted.
The export market with all countries will be expanded regardless of the souci-economic and policy systems.
Necessary conditions will be created in order to join the regional Free-Trade Area.
Furthermore, necessary conditions will be created for Laos to become the transit center in trade and services in the future.
The membership of Laos into ASEAN-AFTA in 1997 is one important way to improve the exportation and foreign market for Lao products and also to encourage the domestic market.
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 70%
Unemployment rate 5.7% 2000 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%.
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,vegetables,corn,coffee,sugarcane, tobacco, cotton; tea, peanuts, rice; water buffalo, pigs, cattle, poultry.
Exports around $250 to 300 million per year (f.o.b).
Exports - commodities wood products, garments, electricity, coffee, tin
Exports - Main partners ASEAN, EU.
Imports $529 million (f.o.b., 2000).
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 name kip (K)
Exchange rates 9450 kips/USD.
Fiscal year 1 October - 30 September
Population 5,497,459 (July 2000 est.)
Age structure 0-14 years:43% (male 1,191,608; female 1,173,144)
15-64 years:54% (male 1,447,788; female 1,500,016)
65 years and over:3% (male 85,028; female 99,875) (2000 est.)
Population growth rate 2.5% (2000 est.)
Birth rate 38.29 births/1,000 population (2000 est.)
Death rate 13.35 deaths/1,000 population (2000 est.)
Net migration rate 0 migrant(s)/1,000 population (2000 est.)
Sex ration at birth:1.05 male(s)/female, under 15 years:1.02 male(s)/female
15-64 years:0.97 male(s)/female, 65 years and over:0.85 male(s)/female total population:0.98 male(s)/female (2000 est.)
Infant mortality rate 94.8 deaths/1,000 live births (2000 est.)
Life expectancy at birth total population:53.09 years, male:51.22 years, female:55.02 years (2000 est.)
Total fertility rate 5.21 children born/woman (2000 est.)
Nationality noun: Lao(s) or Laotian(s), adjective: Lao or Laotian
Ethnic groups Lao Loum (lowland) 68%, Lao Theung (upland) 22%, Lao Soung (highland) including the Hmong ("Meo") and the Yao (Mien) 9%, ethnic Vietnamese/Chinese 1%
Religions Buddhist 60% (in October 1999, the regime proposed a constitutional amendment making Buddhism the state religion; the National Assembly is expected to vote on the amendment sometime in 2000), animist and other 40%
Languages Lao (official), French, English, and various ethnic languages
Literacy definition: age 15 and over can read and write total population:57%, male:70%, female:44%.
Natural resources timber, hydropower, gypsum, tin, gold, gemstones.
Land use arable land: 3%, permanent crops:0%, permanent pastures:3%, forests and woodland:54%, other:40%.
Irrigated land 1,250 sq km
Note: rainy season irrigation - 2,169 sq km; dry season irrigation - 750 sq km.
Natural hazards floods, droughts, and blight.
Environment - current issues unexploded ordnance; deforestation; soil erosion; a majority of the population does not have access to potable water
Environment - international agreements party to: Biodiversity, Climate Change, Desertification, Environmental Modification, Law of the Sea, Nuclear Test Ban, Ozone Layer Protection signed, but not ratified: none of the selected agreements Laos Transportation
Highways total: 21,716 km, paved: 9,673.5 km, unpaved:12,042.5 km .
Waterways about 4,587 km, primarily Mekong and tributaries; 2,897 additional km are sectionally navigable by craft drawing less than 0.5 m
Pipelines petroleum products 136 km (unused now)
Ports and harbors none
Airports: Wattay Airport in Vientiane capital city.
Airports - with paved runways total:9
2,438 to 3,047 m:1
1,524 to 2,437 m:4
914 to 1,523 m:4
Airports - with unpaved runways total:43
1,524 to 2,437 m:1
914 to 1,523 m:17
under 914 m:25 .

Laos Government
Country name Lao People's Democratic Republicconventional short form: Lao PDR. local long form: Sathalanalat Paxathipatai Paxaxon Lao

Data code LA
Government type: Lao People's Democratic Republic. Capital Vientiane
Administrative divisions 17 provinces that are included 1 Municipality Kampheng nakhon Vientiane and 1 special zone (khet phisetXaysomboune);
Champasak, Salavan, Attapu, Xekong, Savannakhet, Bolikhamxai, Khammouan, Vientiane Province, Louangphabang, Xaignabouli, Bokeo, Houaphan, Louangnamtha, Oudomxai, Phongsali, Xiangkhoang.
Independence 19 July 1949 (from France).
National Day, 2 December (1975) (proclamation of the Lao People's Democratic Republic)
Constitution promulgated 14 August 1991.
Executive branch chief of state: President Khamtai SIPHANDON, Vice President Choummaly SAYGNASONE.
Head of government:Prime Minister Bounyanh VORACHITH, Deputy Prime Minister Ajang LAOLY , Deputy Prime Minister Thongloune SISOULITH and Deputy Prime Minister Somsavat LENGSAVAT.
Cabinet:Council of Ministers appointed by the president, approved by the National Assembly
Elections:president elected by the National Assembly for a five-year term; election last held 11 April 2002; prime minister appointed by the president with the approval of the National Assembly for a five-year term;
Legislative branch unicameral National Assembly (106 seats; members elected by popular vote to serve five-year terms; note - by presidential decree, on 27 October 1997, the number of seats increased from 85 to 106)
Relections: last held 21 December 1997. This year election held NA 11 April 2002.
Judicial branch People's Supreme Court, the National Assembly on the recommendation of the National Assembly Standing Committee elects the president of the People's Supreme Court, the vice president of the People's Supreme Court and the National Assembly Standing Committee appoints the judges
Political parties and leaders Lao People's Revolutionary Party or LPRP [KHAMTAI Siphandon, party president].
International organization participation ACCT, ADB, ASEAN, CP, ESCAP, FAO, IBRD, ICAO, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, Intelsat, Interpol, IOC, ITU, NAM, OPCW, PCA, UN, UNCTAD, UNESCO, UNIDO, UPU, WFTU, WHO, WIPO, WMO, WTO(observer)
Flag description three horizontal bands of red (top), blue (double width), and red with a large white disk centered in the blue band.