Lao People's Democratic Republic
The Lao People's Democratic Republic (Lao PDR) is the only landlocked country in Southeast Asia, and it has the smallest population of the six GMS countries. But it is rich in natural resources, and has benefited from vigorous economic growth in recent years thanks to its mining, agricultural, and energy exports. The country has made impressive progress in achieving many of its Millennium Development Goals. Poverty and hunger have been greatly reduced, and education and health outcomes have improved. E‰orts to diversify the economy and strengthen connectivity and collaboration with its GMS and ASEAN partners should lead to continued growth and prosperity in the coming years.
|Population||7.23 million (2020)||Average Annual Population Growth Rate||1.6% (2015-2020)|
|GDP at PPP (current international dollars)||59.7 billion (2020)|
|GDP per capita at PPP (current international dollars)||8,563 (2020)|
Although commercial farming is on the rise, agriculture in the Lao PDR is still mostly subsistence. Rice—especially sticky rice—is the major crop, and is planted on nearly three-quarters of the cultivated land. Other important products include maize, coffee, sugarcane, and cassava, as well as industrial trees such as rubber and eucalyptus. The Lao PDR is looking to boost the contribution of agriculture to rural poverty reduction, and is collaborating with its GMS partners to modernize and commercialize the sector. This collaboration includes revising its policies on cross-border agricultural trade to attract investment and boost exports.
Utilizing its impressive water resources, the Lao PDR generates most of its electricity by hydropower, with 50 hydro dams in operation and more being built. The country intends to increase its electricity exports, and has plans to enhance its infrastructure for transmission to Cambodia, the PRC, Thailand, and Viet Nam. Meanwhile, the government’s priority is to ensure that all domestic households have access to electricity, and it has made steady progress in this regard—92% of the population are now connected, from 15% 20 years ago.
The Lao PDR’s landscape is dominated by rugged mountains and extensive rivers. In addition to water, the country is rich in natural resources such as minerals and forests, and has a great deal of biodiversity. In recent years, the Lao PDR has strengthened its biodiversity conservation eorts in important forest areas. Looking ahead, the country is aiming to establish better systems for controlling air and water pollution caused by agriculture and industry. With its GMS partners, the Lao PDR is also working on green freight solutions for developing more environmentally friendly transport.
The Lao PDR views human resource development as essential for achieving its socioeconomic development objectives. National priorities include increasing investments in the sector and ensuring that opportunities for human resource development are accessible to all. The Lao PDR has been working to expand and improve technical and vocational education and training, as well as higher education. The country has made considerable progress in improving the health of its people in recent decades. Maternal and child mortality have been reduced, malaria deaths are on the decline, and vaccination coverage is increasing. Health priorities include achieving universal health coverage, improving cross-border disease control, and reducing malnutrition.
Recognizing the importance of ICT to socioeconomic development and global connectivity, the Lao PDR has steadily improved its telecommunications infrastructure. More than 37% of the population now uses the internet through mobile broadband and fixed (wired) broadband, up from just 20% in 2015. Eorts are under way to further modernize the sector and expand its geographical reach. The targets include extending the telecommunications network to reach 91% of the villages and installing fiber-optic cables in all the country’s districts. The government is also promoting the use of ICT in schools and exploring measures to ensure internet affordability.
The Lao PDR’s tourist attractions include World Heritage sites such as the historic town of Luang Prabang and the ancient Vat Phou Temple complex (in Champasak Province). The country’s many ecotourism opportunities and vibrant capital city, Vientiane, also entice visitors from near and far. Of the GMS countries, the Lao PDR receives the highest proportion of international visitors relative to population size. National tourism priorities include local job creation, infrastructure improvement, and environmental sustainability.
The Lao PDR is actively pursuing its goal of transitioning from a landlocked to a “land-linked” country. Significant progress has been made in improving the nation’s roads, waterways, and air-transport infrastructure in recent decades. Roads remain essential for the movement of goods and people, and the country is now benefiting from better road connectivity with its GMS neighbors. The Lao PDR recognizes the importance of e¤cient transport for achieving its Sustainable Development Goals. With support from its GMS partners, it has ambitious plans for developing an extensive railway system. The country is also looking to improve its rural road network and to climate-proof its transport infrastructure.
As a landlocked nation, the Lao PDR depends on trade with its GMS partners. Together, the PRC, Thailand, and Viet Nam receive more than 80% of the country’s exports, including timber, electricity, agricultural products, and copper. These three countries provide an even higher proportion of the Lao PDR’s imports. The government is preparing to launch a road-user charging system, and has simplified the clearance procedures at the Viet Nam border. Efforts are also under way to reduce logistics costs for freight transport and to ensure that the transport and trade of food products is safe and disease-free.
In the Lao PDR, the urban areas are home to around 40% of the population. Vientiane is the only large city, with nearly a million people. The government is forging stronger linkages with towns and cities in neighboring countries by supporting the movement of goods and services along the GMS economic corridors. Its urban development goal is to create modern, livable, and environmentally friendly towns that preserve the country’s unique cultural assets.
GMS Program Officials and Contacts in Lao PDR
- Sisomboun OUNAVONG (Ms)
Department of International Cooperation
Ministry of Planning and Investment
- Chanthaly CHANSOMPHENG (Mr)
Department of International Cooperation
Ministry of Planning and Investment
A freight transit yard where cargo is transferred for transshipment has been put into operation by the People’s Republic of China (PRC) – Lao People’s Democratic Republic (Lao PDR) Railway on 1 July 2022 at the Vientiane South Station. The freight yard promises to boost the PRC-Lao PDR railway’s logistics, improving the link between the railways of PRC-Lao PDR and Thailand.
ADB is one of Lao PDR's largest sources of official development assistance, with an average annual lending of $100 million over the 5 years to 2021.
The fifth friendship bridge between the Lao People‘s Democratic Republic (Lao PDR) and Thailand is set to further enhance Lao PDR’s connectivity with its neighbors in the Greater Mekong Subregion. It will link Borikhamxay province (Lao PDR) to Bueng Kan province (Thailand), becoming a vital road link between Laos, Thailand and Vietnam. Spanning over 150km, it promises to be the shortest connecting link between the three countries and opens another regional trade and transit route.
A feasibility study will be undertaken for the construction of an expressway from Houaphanh, a province in eastern Lao People’s Democratic Republic (PDR), to its border with Viet Nam, reported the Vientiane Times. The project is part of a larger expressway construction project linking Houaphanh with the Lao PDR capital of Vientiane.
Thailand will accelerate its railway connectivity, in line with the opening of the railway link between the People’s Republic of China (PRC) and Lao People’s Democratic Republic (Lao PDR) in December 2021.
Two trucks were flagged off at the launch of cross-border freight transport between Kunming in Yunnan Province, People’s Republic of China (PRC), and Vientiane, Lao People’s Democratic Republic (Lao PDR), on 25 August. The Vientiane-bound truck from PRC carried around 3 million CNY (around $464,000) worth of machinery, equipment, and electronic appliances, while the truck bound for Kunming carried Laotian goods. Both trucks will pass through the Bohan (PRC)-Boten (Lao PDR) border checkpoint.
The Governments of Lao People’s Democratic Republic and Viet Nam inaugurated the Dakta Ok (Se Kong, Lao PDR) – Nam Giang (Quang Nam, Viet Nam) border gates on 14 August 2021, which were upgraded to international status this year. This new international cross-border point is expected to further boost bilateral trade, investment, and tourism, and promote opportunities for cooperation between Viet Nam’s central key economic zone and Lao PDR’s south-central region, as well as Thailand’s southeast region.
The second Mekong-U.S. Partnership Ministerial Meeting held on 2 August 2021 unveiled four flagship projects under the Mekong-U.S. Partnership, and noted the 8.5 million vaccine doses and over $58 million in U.S. COVID-19 assistance to the Mekong subregion countries.
The Luang Prabang Station along the Lao PDR-People's Republic of China (PRC) railway is set to be completed in August, notes the China Radio International Vientiane. It will have two platforms, four tracks, and a station hall that can accommodate 1,200 passengers. The station’s roof incorporates a distinctive “three vertical lines, one diagonal” design in the steel structure.
The planned Lao People’s Democratic Republic (PDR)-People’s Republic of China (PRC) expressway aims to improve the transport of goods and people, promote production, and boost commerce, investment, tourism and services, in line with the Government of Lao PDR's objectives. It spans 440 kilometers and comprises four sections in total. Section 1 running between Vientiane and Vangvieng, is already in use.