(Lao People's Democratic Republic)

Lao flag

A land-locked country, larger than the UK but with a population smaller than Hong Kong, the People’s Republic of Laos is one of the world’s poorest and most underdeveloped countries.

Many Lao feel dominated by their larger and more powerful neighbours, politically by Vietnam and China, and culturally by Thailand. During the early-1990s and after the collapse of the Soviet Union the country embarked on a series of reforms known as the New Economic Mechanism under which it gradually liberalised its economy and divested many of its state owned enterprises. However it still remains one of the last bastions of communism, retaining a highly regulated command economy.

It has enjoyed long political ties and economic assistance with its socialist neighbour Vietnam but joined ASEAN in 1997 in an effort to broaden its economy, soon before the Asian financial crisis. During the crisis it suffered raging inflation and questioned the western capitalist model, now focussing its political and economic strategy increasingly on that of China.

It's economy is still greatly dependent on agriculture but efforts gave been made in the past 15 years to encourage foreign investment and diversify the economy with tourism, the mining of copper, gold and gems, and the development of hydropower to export electricity to its neighbours taking an increasing share of GDP. As such it has enjoyed impressive growth in recent years.


Population: c. 6,477,200
Capital City: Vientiane
Government: Socialist Republic, Single Party State
Languages: Lao, others
GDP per capita (PPP): $2,500
Growth Rate: 5%-7% per annum


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